Downtown Advisory Board
Meeting of: 08-09-16
To: Chairman and Board Members
From: City Manager’s Office
Title:
title
Presentation, consideration, discussion, and possible recommendation to approve an Economic Development Agreement with Orchard Properties for the sale of approximately 5.0878 acres of real property located on the North Side of Tiger Hill, generally located at the southwest corner of Kenosha Street (71st Street) and Lynn Lane (9th Street)
End
Background:
On January 5, 2010, the Broken Arrow City Council approved Resolution Number 638 which declared its intent to develop, approve, and adopt a project plan for the creation of a Tax Increment Financing District for the square mile between east Kenosha Street (71st Street), east Houston (81st Street), Lynn Lane (9th Street) and Elm Place, and encompassing Tiger Hill, among other areas of the City. On May 26, 2010, the City, the Broken Arrow Economic Development Authority (the “Authority”) and FlightSafety International, Inc. (“FlightSafety”) entered into an Economic Development Agreement (the “2010 FSI Agreement”) providing for the use of 17.88 acres of Tiger Hill (“South Tiger Hill”) by FlightSafety for construction of a new manufacturing and headquarters complex. Pursuant to the 2010 FSI Agreement and lease thereof from the City, the Authority subleased South Tiger Hill to FlightSafety for the aforesaid purposes and also provided for the Authority’s payment of certain job retention benefits to FlightSafety.
In connection with the foregoing, certain other revenues of the District were earmarked for use to prepare and provide necessary utility connections for certain building and related use sites on the north side of Tiger Hill deemed suitable for the construction of restaurant, retail and other commercial business operations. One of the objectives of this strategy was to increase the City’s sale tax base. On March 3, 2012, the City Council approved the preliminary development of approximately 6.84 acres located on the north side of Tiger Hill (“North Tiger Hill”).
In March 2012, it was contemplated that North Tiger Hill would continue to be owned by the City and leased for such uses. Prior to and following the February 2013 completion of North Tiger Hill development activities City Staff, together with representatives of the Broken Arrow Economic Development Corporation, actively marketed North Tiger Hill as originally contemplated without success.
In early 2016, the City’s Economic Development Coordinator was approached by representatives of a perspective Buyer wishing to purchase the property. The Buyer formally expressed his interest in acquiring North Tiger Hill for the aggregate sum of $2,300,000.00.
After additional negotiations, the buyer submitted an offer to purchase 5.0878 acres for $11.50 per square foot, for a total of $2,548,687.50. On July 5, 2016, the City Council considered an economic development proposal and appraisal of the property in Executive Session. Following this discussion, the City Council moved to authorize the City Manager to move forward with negotiations for an economic development agreement for this area.
An Economic Development Agreement for the sale of North Tiger Hill will not only generate $2,548,687.50, but will also serve to provide direct economic benefits within and near the City. Specifically, the proposed transaction should result in the retention and increase of City sales tax receipts and ad valorem tax revenues to be derived by the City, Tulsa County, Independent School District No. 3 of Tulsa County, and other local and area governmental entities. It is contemplated that the Agreement will be developed in such a way as to maximize the City’s return. The proposed generation of revenues and development of North Tiger Hill is unquestionably in the best interests of the citizens of Broken Arrow.
Representatives from Orchard Properties submitted a Purchase and Sale Agreement. This is not the document that will be utilized to formalize the transaction. However, it did serve as the basis for final resolution. A copy of the appraisal is also attached for the Board’s review.
Cost: $0
Prepared By: Norman Stephens, Assistant to the City Manager / Economic
Development Coordinator
Reviewed By: Development Services Department
Finance Department
Legal Department
Approved By: Norman Stephens, Assistant to the City Manager / Economic
Development Coordinator
Attachments: Valbridge Property Appraisal Report
Tiger Hill Presentation
Recommendation:
Recommend approval of an Economic Development Agreement for the sale of North Tiger Hill.