DEPARTMENT: Office of EastPoint and Real Estate Services
DEPARTMENT HEAD: Mike Etienne
COUNCIL DISTRICTS IMPACTED: 7
SUBJECT:
Disposition: Sale of City-owned Property located at 3141 Culebra Road
SUMMARY:
Consideration of the following ordinances authorizing the sale of City owned real property:
A) An ordinance to declare as surplus the City's former St. Mary's Learning Center, only the building located at 3141 Culebra Road in Council District 7 and authorize its sale to the St. Mary's University for $315,000.00.
B) An ordinance terminating a 40 year ground lease agreement with St. Mary's
University for the use of a 42,000 square foot tract of land upon which the City built a 7,988 square foot building known as the St. Mary's Learning Center located 3141 Culebra Road in Council District 7.
BACKGROUND INFORMATION:
A) Under Municipal Code, all City property must be declared as surplus prior to the disposition of the property. Under this process, a request to declare property as surplus is submitted to the Office of EastPoint and Real Estate Services. The request and exhibits are then sent to City departments and utilities which provide services or construct infrastructure on the property. The departments and utilities respond if there is a need for the property or if the property can be disposed. Appraisals and surveys are completed if the property is determined to be surplus. The property is then presented to City Council for final authorization to declare the property as surplus and dispose of the property.
St. Mary's University (Petitioner) is requesting that the City of San Antonio declare as surplus and sell the City-owned building known as St. Mary's Learning Center located at 3141 Culebra Road (NCB 9292), in City Council District No. 7. The one-story facility consists of 7,988 square feet. The former learning center was built circa 1997 and closed in 2013. The facility was used as an adult learning center; however, the Department of Human Services has now deemed the site vacant and surplus to its needs. The subject property sits on 1.00 acre of land which is owned and part of St. Mary's University Campus. If approved, the Petitioner plans to use the facility for the enhancement of educational services and campus operations.
B) In 1995 the City entered into a ground lease agreement with Petitioner granting the City the right to develop the land area for a learning and leadership development center to combat illiteracy including classes for adults in reading and writing, GED preparation and computer enhanced learning programs. To that end, the City built the building which is proposed for sale and opened it to the public in 1997. The lease was specific in that no other uses were allowed and to the extent that the City ceased providing literacy services, the lease must be terminated and the building sold to St. Mary's University.
ISSUE:
A) This ordinance will declare as surplus and sell the former St. Mary's Learning Center located at 3141 Culebra Road (NCB 9292), and authorize its sale to St. Mary's University, for $315,000.00. The property was appraised for $360,000.00. The facility was used as an adult learning center; however, the Department of Human Services has now deemed the site vacant and surplus to its needs. The former learning center was constructed circa 1997 and closed in 2013. The subject property sits on 1.00 acre of land which is owned and part of St. Mary's University Campus. If approved, the Petitioner plans to use the facility for the enhancement of educational services and campus operations.
B) An ordinance terminating a 40 year ground lease agreement with St. Mary's
University for the use of a 42,000 square foot tract of land upon which the City built a 7,988 square foot building known as the St. Mary's Learning Center located 3141 Culebra Road. The ground lease was specifc in that the property could only be used by the City to provide literacy services, and if that use ceased, which it did in December 2013, the lease must be terminated.
This action is consistent with the City Code and Ordinances, which require City Council approval for the disposition of any surplus City-owned real property.
ALTERNATIVES:
A) The alternative is to not approve the sale of this property. Staff does not recommend this alternative since the property would remain vacant and unused. Also, the City would have to continue its liability and maintenance of the vacant property. In addition, St. Mary's University would not be able to renovate the property and use the facility for the enhancement of educational services and campus operations.
B) There are no alternatives to the termination of the lease as the City has made the decision to no longer provide literacy services at this location; therefore, per the contact in place, the lease must be terminated.
FISCAL IMPACT:
A) In compliance with Chapter 37 of the City Code, Section 37-2, fair market value of the subject property was based upon an independent State of Texas Certified Professional Appraisal Report in the amount of $360,000.00 by Sandison Appraisal, LLC on December 2, 2013. The City and St. Mary's University have negotiated a purchase price of $315,000.00. Net sale proceeds after deduction of (i) transactional costs associated with the sale, and (ii) the amount required, if at all, to be paid to satisfy outstanding grant obligations associated with the property, shall be deposited into the General Fund since there is no outstanding debt on this facility.
B) As the City never paid rent for use of this property, there is no fiscal impact associated with terminating the lease.
RECOMMENDATION:
Staff recommends approval of issues A and B located in Council District 7.
The City of San Antonio's Planning Commission will consider this request at its regular meeting on October 22, 2014.