HomeMy WebLinkAboutAgenda 05-24-22; 8-i - Proposed Sale of 129 East King Street, Hillsborough, NC 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: May 24, 2022
Action Agenda
Item No. 8-i
SUBJECT: Proposed Sale of 129 East King Street, Hillsborough, NC
DEPARTMENT: Asset Management Services
ATTACHMENT(S): INFORMATION CONTACT:
1. Offer for the Purchase and Sale of Travis Myren, Deputy County Manager,
Improved Property 919-245-2308
2. Appraisal Cover Letter of 129 East Steven Arndt, Asset Management
King Street, Hillsborough, NC Services Director, 919-245-2658
3. North Carolina General Statute 160A-
269 Negotiated Offer, Advertisement,
and Upset Bids
4. Resolution Authorizing the Sale and
Upset Bid Process for 129 East King
Street
PURPOSE: To consider the approval of the sale of County-owned property located at 129 East
King Street, Hillsborough, NC, and the approval of a resolution authorizing the sale of the property
through a negotiated offer, advertisement, and upset bid process.
BACKGROUND: The County-owned property at 129 East King Street consists of a .24 acre site
with a 7,100 gross square foot facility that was originally constructed in 1947 for use as a retail
furniture store. Orange County acquired the property in 2001 and renovated it for use as an office.
It is located near the center of Hillsborough, close to the Historic Courthouse. The facility is in
poor condition, with numerous structural and environmental issues, and has been vacant since
late 2018.
After touring the facility, Miller Property Management, LLC, located in Durham, NC, presented the
County with an unsolicited offer to purchase the property for $178,000 on May 16, 2022
(Attachment 1). The County previously received an unsolicited offer of$150,000 on April 25, 2022
for the property. However, the County is required by statute to consider the highest legal offer for
the sale of any asset. The property was recently appraised in February 2022 at $160,000
(Attachment 2).
In accordance with North Carolina General Statute 160A-269, public property may be sold through
a negotiated offer, advertisement, and upset bid process (Attachment 3). A resolution authorizing
the sale of the property through this upset bid process is also included (Attachment 4). Should the
Board approve the sale of this property in this manner, a notice of sale will immediately be placed
in a local paper and on the County's Purchasing web page. The notice shall contain a general
description of the property, the amount and terms of the offer, and a notice that within ten days
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any person may raise the bid by not less than ten percent (10%) of the first one thousand dollars,
and five percent (5%) of the remainder. When a bid is raised, the bidder shall deposit with the
County five percent (5%) of the increased bid, and the County shall re-advertise the offer at the
increased bid amount for an additional ten days. This procedure shall be repeated until no further
qualifying upset bids are received, at which time the Board may accept the offer and sell the
property to the highest bidder. The final offer will be brought back to the Board for consideration
and approval.
FINANCIAL IMPACT: The property is currently sitting vacant and there are no plans to renovate
or re-occupy the site. Due to the extremely poor condition of the facility, the appraised value of
the property is based upon the value of the land only. Sale of 129 East King Street will convert a
non-productive capital asset into at least $178,000 that may be re-allocated to other County
needs.
SOCIAL JUSTICE IMPACT: There are no Orange County Social Justice Goal impacts
associated with this item.
ENVIRONMENTAL IMPACT: There are no Orange County Environmental Responsibility Goal
impacts associated with this item.
RECOMMENDATION(S): The Manager recommends that the Board:
1) Approve the sale of 129 East King Street, Hillsborough, NC through a negotiated offer,
advertisement and upset bid process, in accordance with North Carolina General Statute
160A-269; and
2) Approve and authorize the Chair to sign the resolution authorizing the sale through this
process.
Attachment 1 3
STATE OF NORTH CAROLINA
COUNTY OF ORANGE
OFFER TO PURCHASE ORANGE COUNTY REAL PROPERTY
This offer is being made as a negotiated offer, pursuant to N.C. Gen. Stat. 160A-269, and other
applicable sections of the North Carolina General Statutes. The terms of the offer are as follows:
1. OFFER: The undersigned Offerror herby Offers to purchase he property escribed below from
Orange County for the price of$ '' .Poc( �1u r Se✓��� AP )
2. PROPERTY: The property upon which an offer is being made is that certain lot of parcel of land
including all improvements thereon, situated in Hillsborough Township, Hillsborough, North
Carolina, �-
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3. "AS IS" CONDITION; TITLE: The Offeror acknowledges that this offer is for the purchase of the
property described above in its "as is" condition. Title will be conveyed by special warranty
deed,free and clear of all liens or encumbrances.
4. DEPOSIT: With this offer the undersigned has deposited 5% of the proposed purchase price
with the county as required by law(refundable if the offer is not accepted).
5. PROPERTY TAX: It is understood that the property is currently tax exempt, but that pursuant to
N.C. Gen. Stat. 105-29(d) the property may become taxable for the fiscal year beginning July of
the calendar year in which it is acquired, in which case, the property taxes will be the
responsibility of the Offeror.
6. UPSET BID PROCEDURE: It is understood that the this offer is subject to upset bid procedures
pursuant to N.C. Gen. Stat. 160A-269, and that no final action will be taken on acceptance of this
offer until the upset period has expired. It is also understood that by law, the County Board of
Commissioners may reject this offer and any upset bid offers at any time.
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7. ADVERTISING COSTS: Upon closing, the Offeror agrees to reimburse the advertising fees for all
legal notice required under N.C. Gen. Stat. 160A-269.
8. WITHDRAWAL: The County reserves the right to withdraw the property from sale at any time
before the bid or any upset bids are accepted.
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[Signature Page to Follow]
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Date: 5_-16_Z
Initial:
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Attachment 1 4
OFFER TO PURCHASE ORANGE COUNTY REAL PROPERTY
P. 2
This theOda of 20Z�
1 L� Y
(If a corporate Offeror) (If Individual)
Name of ntit / / Offeror:
s � ' 6ltt��lNtl� -�(._ ( (Print Name)
By: es i Ile�� Offeror:
Titl C) 2 y- (Print Name)
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Attest: -Tu,-5 eo�
Corporate Secretary(Affix Corporate Seal)
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Attachment #2
Appraisal Cover Letter for 129 East King Street
RESTRICTED APPRAISAL OF:
OFFICE BUILDING
129 E.KING STREET
HILLSBOROUGH,ORANGE COUNTY
NORTH CAROLINA 27278
FOR:
ALAN DORMAN
ASSISTANT DIRECTOR
ASSET MANAGEMENT SERVICES
ORANGE COUNTY
HILLSBOROUGH,NC 27278
DATE OF REPORT:
FEBRUARY 11
.,2022
BY:
ANALYTICAL CONSULTANTS
1125 KINGSTON DRIVE,SUITE 206
CHAPEL HILL,NC 27514
PREPARED BY:
PAUL L. SNOW,MAI
CERTIFIED GENERAL APPRAISER NC#A4499
CHERI L.DEROSIA
CERTIFIED GENERAL APPRAISER NC#A6345
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Analytical Analytical Consultants
125 Kingston Drive
Consultants Suite 206
The Commercial Real Estate Professionals Chapel Hill,NC 27514
Phone: 919-929-9539
Fax: 919-929-9543
February 11, 2022
Alan Dorman
Assistant Director
Asset Management Services
Orange County
Hillsborough, NC 27278
Re: Office Building, 129 E. King Street, Hillsborough, North Carolina 27278
Dear Mr. Dorman:
In response to your engagement letter of November 19, 2021, we have prepared a Restricted
Appraisal of the above referenced property. We have examined the physical property, inspected
the neighborhood and analyzed the market for similar properties in Hillsborough and the
surrounding area. The purpose of this appraisal is to provide an opinion of the As Is Market Value
of the subject property.
The subject of this report is a 0,240-acre parcel improved with an office and warehouse building
located on the north side of E, King Street in downtown Hillsborough. The property is zoned CC,
Central Commercial
According to information provided by Orange County as well as other sources, the improvements
on the subject were constructed in 1947 as a furniture store, Orange County acquired it in 2000
and renovated it, and in 2009 the Office of the Public Defender moved in. It is approximately 7,100
square feet in size with 4,700 square feet at the front of the building upfit as office space, and an
additional 2,400 square feet of warehouse space at the back. The office area is on a crawl space,
while the warehouse is on a slab, The exterior walls of the office are brick, and the exterior walls of
the warehouse are concrete block. Most of the roof is metal, although a small area at the front is
shingle.
The site has relatively little street frontage compared to its depth —it is approximately 40 feet wide
and 270 feet deep. The building sits back from the street approximately 25 feet, but has no setback
on either side from the adjacent properties, Even though there is a roll-up door at the back of the
warehouse, there is no vehicular access to that door.
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The subject site slopes down from back to front, and it has been reported that stormwater has
regularly flooded the building from the higher ground to the north. In 2013 or 2014, remediation
was conducted to address flooding and handle the stormwater, but it flooded again in 2016. The
crawlspace has consistently been damp, and mold was identified inside the office building.
According to a May 1, 2019 report by SEA Consulting, The apparent fungal growth and discolored
and deteriorated floor framing within the crawl space, as well as the reported mold growth within
the building's interior, was consistent with elevated humidity within the crawl space and the
building's interior as a result of surface water intrusion and/or deficiencies in the stormwater control
measures on, and around, the property." Orange County concluded that the building was unsafe to
occupy, and the Public Defender's office moved out of it.
It is our opinion that the most likely buyer of the subject would demolish the building and construct
a new one, taking the site's stormwater challenges into account in its design. Therefore, it is our
opinion that the highest and best use of the subject is for redevelopment. We use the Sales
Comparison Approach to estimate the value of the subject land As Vacant, and then subtract the
estimated cost to demolish the building to calculate the value of the subject As Is.
Subject to the conditions and explanations contained in the following report, and based on our
analysis of the subject and the market, together with our experience appraising properties similar to
the subject, we have concluded the value below. The value concluded is the Market Value of the
Fee Simple Interest in the subject parcel As Is as of January 13, 2022, the date of our site visit;
Value Summary Total Acres Per Square Foot
Land Value -As Vacant $210,000 0.24 $20.09
Demolition Cost -$50,000
Land Value -As Is $160,000
The following report presents the data, analyses and other materials that give support to our value
conclusions. Within the report we provide a definition of Market Value, Fee Simple Estate, Highest
and Best Use, and other appraisal terms used. Please note that our opinion is not based on a
requested minimum value, a specific valuation, or the approval of a loan amount.
The appraisal analysis, opinions and conclusions were developed and this appraisal report has
been prepared in conformance with (and the use of this report is subject to) all regulations issued
under Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989
(FIRREA) and the Uniform Standards of Professional Appraisal Practice (USPAP) as promulgated
by the Appraisal Standards Board of the Appraisal Foundation in Washington DC, Under USPAP,
this is a Restricted Appraisal Report.
This letter of transmittal precedes this Appraisal Report, further describing the property and
containing the reasoning and most pertinent data leading to the final opinion of value. Your
attention is directed to the "Certificate of Appraisal," "Hypothetical Conditions," "Extraordinary
Assumptions," "General Assumptions," and "General Limiting Conditions" which are considered
usual for this type of assignment and have been included within the text of this report.
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It was a pleasure preparing this appraisal for you. Please contact us if you have unanswered
questions regarding our appraisal or if we can be of further assistance in the interpretation of our
findings and opinions,
Respectfully submitted,
�w� C)lU11L�WIliJ1 NL,L
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e a p I ,k l „1_• A� T 9 }r __
Paul L.Snow,MAI Cheri L, DeRosia`� i;�
President,Analytical Consultants Certified General Aa r'fs� _� #A 5
Certified General Appraiser NC#A4499 �� «, r
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Attachment#3
16DA-269. hlegotisted offer, sdvertis.ernent, and upset bids.
A city may receive, solicit, or negotiate an offer to purchase property and advertise it for
upset bids. When an offer is made and the council proposes to accept it, thecouncil shall
require the offeror to deposit five percent (51%) of hi s bid with the city clerk, and shal l pub]ish a
notice of the offer. The notice shall contain a genicral description of the property, the an-Lowit
and terms of the offer, and a notice that Within 19 days any person may raise the bid by not less
than Icit percent (10%) of the first one thousand dollars ($1,000) and fire percent (5'1/�) of the
rein. Indcr. When a bid is raised, the bidder shall deposit with the city clerk fire percent (50/0) of
the increased bid, and the clerk shall readvertise the offer at the increased bid. This procedure
shall be repeated until no further qualif}2ng upset bids are received_ at which time the council
may accept the offer and sell the property to the highest bidder. The council may at any time
reject any and all offers.. (1971, c. 698, s. 1; 1979, 2nd Sess., c: 1247, s_ .)
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RES-2022-028
Attachment #4
Resolution Authorizing Upset Bid Process for 129 East King Street
WHEREAS, Orange County owns certain property, .24 acres of land and 7,100 square feet of
building improvements located at 129 East King Street, Hillsborough, NC; and
WHEREAS, North Carolina General Statue 160A-269 permits the County to sell property by upset
bid, after receipt of an offer for the property; and
WHEREAS, Orange County has received an offer to purchase the property described above, in
the amount of$178,000 submitted by Miller Property Management, LLC, Durham, NC; and
WHEREAS, Miller Property Management has paid the required five percent (5%) deposit on its
offer;
THEREFORE, we, the Orange County Board of County Commissioners resolve that:
1. The Orange County Board of County Commissioners authorizes the sale of the property
described above through the upset bid procedure of North Carolina General Statute
160A-269.
2. The Orange County Purchasing Agent shall cause a notice of the proposed sale to be
published. The notice shall describe the property and the amount of the offer, and shall
state the terms under which the offer may be upset.
3. Persons wishing to upset the offer that has been received shall submit a sealed bid with
their offer to the office of the Purchasing Agent, located at 405 Meadowlands Drive,
Hillsborough, NC, within 10 days after the notice of sale is published. At the conclusion
of the ten-day period, the Purchasing Agent shall open the bids, if any, and the highest
such bid will become the new offer. If there is more than one bid in the highest amount,
the first such bid received will become the new offer.
4. If a qualifying higher bid is received, the Purchasing Agent shall cause a new notice of the
upset bid to be published, and shall continue to do so until a 10-day period has passed
without any qualifying upset bids having been received. At that time, the amount of the
final high bid shall be reported to the Orange County Board of County Commissioners.
5. A qualifying higher bid is one that raises the existing offer by not less than ten percent
(10%) of the first$1,000 of that offer and five percent (5%) of the remainder of that offer.
6. A qualifying higher bid must also be accompanied by a deposit in the amount of five
percent (5%) of the bid; the deposit may be made in cash, cashier's check, or certified
check. The County will return the deposit on any bid not accepted, and will return the
deposit on an offer subject to upset if a qualifying higher bid is received. The County will
return the deposit of the final high bidder at closing.
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7. The terms of the final sale are that:
- The County must approve the final high offer before the sale is closed, which it will do
within 30 days after the final upset bid period has passed, and
- The buyer must pay with cash at the time of the closing.
8. The County reserves the right to withdraw the property from sale at any time before the
final high bid is accepted and the right to reject at any time all bids.
9. If no qualifying upset bid is received after the initial public notice,the offer set forth above
is hereby accepted. The County Manager is authorized to execute the instruments
necessary to convey the property to Miller Property Management, LLC.
This 24th day of May, 2022.
Renee Price, Chair
Orange County Board of Commissioners
Laura Jensen
Clerk to the Board