COUNCIL COMMUNICATION
TO: Honorable Mayor and Council
FROM: Jeff Thuneman, Development Services Director
SUBJECT:Title
Award Bid for the Sale of City-Owned Property Auction on January 25, 2024, Constituting a 10.29-Acre Tract Located at 2801 Highway 95 N (APN 106-28-050A), Tract 2277, Block 2, Lot 19, Plus Abandoned Cul-de-sacs of Deepwater Drive and Cactus Wren Lane (Chris Gilbert)
Body
FUNDING SOURCE:
N/A
PURPOSE:
To award a bid for the sale of the City-owned property, 10.29-Acre Tract Located at 2801 Highway 95 N, Lake Havasu City, Arizona (APN 106-28-050A), Tract 2277, Block 2, Lot 19 plus Abandoned Cul-de-sacs of Deepwater Drive and Cactus Wren Lane to JC Capital, LLC, in the amount of a qualifying $1,740,000 bid placement plus $87,000 administrative fee and any additional appraisal, title and escrow fees yet to be determined, for a total amount of at least $1,827,000.
BACKGROUND:
In November of 2023, an application was submitted to the Development Services Department requesting purchase of a vacant City-owned property known as “Kiowa Ponds” and located at 2801 Highway 95 N. The parcel is currently zoned Limited Commercial/Planned Development (C-1/PD), and the purchaser intends to use the property for a new commercial development.
An appraisal of the property for market value established a minimum bid for the property and a summary of this appraisal is attached. Due to the enormous size of the full appraisal document, a copy is available in the Development Services Department if further inspection is desired. The appraisal also valued in a requirement for the winning bidder to sign an “Agreement to Revert Property” back to the City if certain development timeframes for the property are not met, including building permits being issued within 36 months of the date of the winning bid date of January 25, 2024, and a Certificate of Occupancy issued within 72 months of this same date. In this event, the owner would be compensated in the manner described in the Agreement.
An online auction was held by GovDeals.com beginning at 8:00 AM on Wednesday, December 27, 2023, and concluding at 3:00 PM on Thursday, January 25, 2024. Three total bids were received but only one met the minimum qualifying bid amount, based on the appraisal, at $1,740,000.
The escrow process has been started with Pioneer Title and will be closed following City Council approval of this sale, the signing of certain documents contained in the approval motion as conditions of approval, and payment of all required fees in addition to the winning bid amount. Upon approval of this sale, closing of the transaction should occur by mid-March.
COMMUNITY IMPACT:
This unused City parcel has the opportunity to eventually host new commercial developments that will provide additional commercial shopping opportunities to the community residents and visitors.
FISCAL IMPACT:
Permitting this heretofore vacant City-owned parcel to be developed commercially should have a positive future impact on both property tax and potentially sales tax revenues to the City, once developed.
The $1,740,000 purchase amount will be placed in the City’s Property Acquisition Fund.
ATTACHMENTS:
Aerial Photo
Tract Map
Appraisal Summary
Winning Bid Confirmation
Agreement to Revert Property
SUGGESTED MOTION::Recommended Action
I move to award the bid for the sale of City real property consisting of a 10.29-acre tract located at 2801 Highway 95 N, Lake Havasu City, Arizona (APN 106-28-050A), Tract 2277, Block 2, Lot 19, plus abandoned cul-de-sacs of Deepwater Drive and Cactus Wren Lane, to JC Capital, LLC, for the sum of $1,740,000, with the following conditions of approval:
1. Payment of the bid amount and all required fees shall be paid into the escrow account for this transaction being held by Pioneer Title Agency.
2. The winning bidder shall execute the attached “Agreement to Revert Property,” requiring building permits to be issued within 36 months of the date of the winning bid date of January 25, 2024, and a Certificate of Occupancy issued within 72 months of this same date.
3. The winning bidder shall assume responsibility for the three groundwater monitoring wells located on the property and shall grant the Right of Access to the Arizona Dept. of Environmental Quality to allow it to continue monitoring operations. Evidence that this right was granted shall be provided to Development Services Department staff; and the City Manager is hereby directed to act on behalf of the City to execute all documents related to the sale of this property.