Title
Resolution to Amend the Budget and Appropriate Funds Not to exceed $4,200,000.00 from the General Fund Balance to Effect the City's Ownership of 350 South Fifth Avenue ($4,200,000.00) (8 Votes Required)
Memorandum
On April 2, 2014, the City executed a deed ("Deed") to Fifth Fourth, LLC ("Fifth Fourth") for the property commonly known as 350 South Fifth Avenue, Ann Arbor, MI 48104 ("Property"). The Deed provides that Fifth Fourth's interest in the Property is conditioned on, among other things, its acquisition of a certificate of occupancy for Deed-prescribed improvements prior to January 1, 2018 (administratively extended to by April 2, 2018, at Fifth Fourth's request). If Fifth Fourth fails to satisfy this (and all other) conditions, the Deed provides that title to the Property returns to the City with its payment of the lesser of $4.2 million or the appraised value of the Property.
The City executed the Deed (and related purchase agreement) with these conditions because it wanted certain development on the Property. To date, Fifth Fourth has not developed the Property. Fifth Fourth will not acquire a certificate of occupancy for the Property by the end of the day.
The City obtained an appraisal of the Property from Alcock & Williams, LLC. Below is the appraisal based on the assumed Floor Area Ratio ("FAR"):
Because all of these values are significantly above the $4.2 million maximum price listed in the Deed, staff recommends that the City: (1) pay the $4.2 million to Fifth Fourth as soon as possible to return the Property to the City ownership in accordance with the Deed; (2) amend the budget and appropriate funds from the General Fund for such payment; and (3) pursue financing options to repay the General Fund.
Staff
Prepared by: Tom Crawford, Chief Financial Officer
Approved by: Howard S. Lazarus, City Administrator
Sponsored by: Mayor Taylor
Body
Whereas, On April 2, 2014, the City executed a deed ("Deed") to Fifth Fourth, LLC ("Fifth Fo...
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