Loading...
HomeMy WebLinkAboutAgenda - 12-05-2022; 8-h - Approval of Sale of 129 East King Street, Hillsborough, NC 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: December 5, 2022 Action Agenda Item No. 8-h SUBJECT: Approval of Sale of 129 East King Street, Hillsborough, NC DEPARTMENT: Asset Management Services ATTACHMENT(S): INFORMATION CONTACT: 1. May 24, 2022 Resolution Authorizing Travis Myren, Deputy County Manager, the Sale and Upset Bid Process for 919-245-2308 129 East King Street Steven Arndt, Asset Management 2. October 27, 2022 David Cates Offer Services Director, 919-245-2658 to Purchase of 129 East King Street 3. Appraisal Cover Letter of 129 East King Street, Hillsborough, NC. PURPOSE: To consider the approval of the sale of County-owned property located at 129 East King Street, Hillsborough, NC. 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. At its May 24, 2022 Business meeting, the Board of County Commissioners approved a resolution authorizing the sale of the property through an upset bid process (Attachment #1). After an extended bidding period, David Cates presented the County with a final, uncontested offer to purchase the property for $400,111 on October 27, 2022 (Attachment 2). The property was recently appraised in February 2022 at $160,000 (Attachment 3). In accordance with North Carolina General Statute 160A-269, the final offer for the sale of the property must be presented 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. The sale of 129 East King Street will convert a non-productive capital asset into $400,111 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. 2 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 to David Cates for $400,111; and 2) Direct the County Attorney's Office to oversee the transfer of the property to Mr. Cates. 3 RES-2022-028 Attachment 1 Resolution Authorizing Upset Bid Process for 129 East King Street WHEREAS, ©range 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--2.69 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. 4 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 34 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 241h day of May, 2022. Renee Price, Chair Orange County Board of Commissioners 04* Laura Jense t� " �# :,Z Clerk to the Board '" r.6 I STO 5 Attachment #2 David Cates Offer 10/27/2022 STATE OF NOR7 H CCARGLI N A: COUNTY OF 0RAN GE OFFER TO PURCHASE ORANGE CDUNTY RE.AE PROPERTY This offer Is being; made as a npgotlated uffer., pursuant to N.C. Gere. Stat. 16GA-269, and oiher a ppllcalAe sectlons of thio North CaT01 Ina G enera 15ralvtes. The Term s of Th a of fer a re a s follioyn: 1. OF'FER: The unclerslgrw[l Otferror herhy of ler# to purchase the property described below frown OiariF-,Gounty For the Price of 5 OCOrl11.001 2. PROPERTY; The piroperty upon which art offer is being made is that certain lot of Parcel of lard including all imp rovem erds tlRereun, situ ateLk In Hlllsb0fough T~ship, Hillsboro h, North Carol in a, 1291 F kung Street,lHI1zbormoF NC 27279. QT. "A-S 15" CONDITION; TI7<l.E, The Offeror a!tk novdedgm that this offer i5 fcrr the purchase-of the proper ty described alatwe I ri its 'as is" rcindltion. T Itl a wrl II k}e c(inveyed by SPCOa I WafFantyp deed, 1rep and clear of-all Ilens or encumbrances- 4. DEPOSIT: With this iu#for the. underskgniad loos de-pas.ited S'.►fi of the propurchme Price Willi titre county as r-egtrlred by law�refundalrle IFthe offer is not accepted), 5. PROPERTY TAX. A as urtiderstood that:the property Is currently tax exempt, but that pursuant to N.C. Gen. Stat. 105-2qId) the property m2y become taxalble for the fiscal year beginning July of the ca lerRlar year In Which It Is atgUked, in which case, the property taxes will be the rUspiOnS1113WlY of the Offeror_ 6. UPSET BID PROCEDURE: It Is undrrstrmd th.,it the this offer Is subjeet to ulpset bid procedures p,.arsuant to N.C. Geri,Stat, 16CA-2.69, and that io final action wOl be taken on a�cceptarice of this offer uritli the upset period has expired. It , aI;-0 understood that bV law, the County Board of Comrnlmloners Dia-Y reJeet this offee and arq,jpset bid ofFers at awry#tare. 7. ADVERTMING rST!S= Upon closinig. tNe €lfferor agrees to rpimbursp the advertkskn fees For all legal notice req uired u ndk-r N.C. Gen. Stat. IRA 2 69, 8. WITHDRAWAL- The County reseryps the right to withdraw the prropertV frorn sale at any time before the bid or any, upwit bids are accepted. [5lgn.&tyre Page to Follow) Date: 10/:27/2022 Initial: OEC 6 OFFER TO PURCHASE ORANGE COUNTY REAL PROPERTY P. 2 This the_27th day of_Dctob,er— - _ .2022, elf a corporate offeror) (If individual) Name of Entity [Offeror. (Print Narne) David E. Cates By: Offeror: Title; (Print fame) Attest: Corporate Secretary (Affix Corporate Seal) 7 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 8 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. 9 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. 10 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 r N 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 i I i i I i I