Memorandum

City of Lawrence

City Manager’s Office

TO:	David L. Corliss, City Manager
FROM:	Diane Stoddard, Assistant City Manager
DATE:	November 17, 2014
CC:	Casey Toomay, Assistant City Manager
RE:	Cornerstone Land Purchase Request

Please place the following item on a future City Commission agenda:

Receive request from Cornerstone Plaza, LLC to purchase a ½ acre Lawrence VenturePark property currently leased to them, located north of 2004 E. 23^rd Street. Provide direction to staff on request.

Background and Discussion:

In early 2012, the City entered into a land lease agreement and option to purchase a small portion of city property, located in Lawrence VenturePark, in order to accommodate a temporary parking need for the tenant at the time, SurePoint Medical.  SurePoint Medical was leasing the building at 2004 E. 23^rd Street from Cornerstone Plaza, LLC.  There was a desire by the City to lease the property in order to support the primary jobs related to SurePoint Medical’s operation.  An option to purchase clause was included in the agreement, which set the option price for the property at $2 per square foot. 

Earlier this year, SurePoint Medical closed its facility located at that address and Cornerstone Plaza, LLC put the building up for sale.   Cornerstone Plaza now has an interested buyer in the building, but the buyer is requiring the additional parking on the city lot and wants to lot included with the other property.  The City is in receipt of a request from Cornerstone Plaza to purchase the 21,760 square foot lot for $1 per square foot, for a total of $21,760.  Cornerstone has also provided an additional letter outlining reasons for their request.  The new owner would then upgrade the temporary parking lot currently on the property to fully comply with city codes.  It is our understanding that the potential purchaser is wanting to close on the property before the end of the year.

An appraisal was recently conducted on the VenturePark property.  The appraiser did not develop an appraised value for Lot 3 Block A, which is the temporary leased parking area in question.  However, the appraiser did develop an appraised value for the adjacent lot, Lot 2 Block A, at $1.38 per square foot.  At $1.38 per square foot, the 21,760 square foot lot would be valued at $30,028.80.  A map of the property is attached.

Staff Recommendation:

Staff does not anticipate an impact on adjacent VenturePark lots as a result of a sale of this property.  Staff would recommend that the City agree to sell the property for the appraised value of $30,028.80 ($1.38 per square foot) rather than the $1 per square foot offer.  The difference between the two is $8,268.80. 

Requested Action:

Provide direction to staff on the sale request.  Staff would then draft the necessary documents for sale of the property should that be the direction.