Fiscal Note
The proposed resolution authorizes the execution of a Purchase and Sale Agreement (PSA) between The Salvation Army and the City of Madison. The City will purchase the property at 3030 Darbo Dr from The Salvation Army for $3.3 million. The proposed resolution further authorizes the execution of a lease between the City of Madison and The Salvation Army. After purchase of the property, the City will lease the property to The Salvation Army for $1 per year. The initial lease term runs through December 31, 2027. After the initial term, the lease can be extended up to three times for a term of one year each. The conditions of the extensions would be the same as the initial lease term.
Total acquisition, closing, and holding costs are estimated to be $3,385,000. Funding for the proposed acquisition and associated expenses is available in the adopted Capital Budget. The Community Development Division's Capital Budget includes $2.5 million for purchase of the property (project #13775). This budget was authorized in 2022 and has carried forward. The project was originally funded by federal American Rescue Plan Act (ARPA) monies. The 2024 year-end appropriation resolution (RES-24-00737, Legistar file 86200) transferred the $2.5 million in ARPA funding to the General Fund for eligible General Fund expenditures, and the ARPA funding for this property acquisition was replaced by a direct appropriation to the Capital Fund from the General Fund. The remaining $885,000 is available in the Economic Development Division's Land Banking capital program (program #12640). No additional appropriation required.
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Authorizing the City’s execution of a Purchase and Sale Agreement and Lease between the City of Madison and The Salvation Army or their successors and assigns, for the purchase of the property located at 3030 Darbo Drive in the City of Madison, and leaseback period subsequent to closing. (District 15)
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WHEREAS, The Salvation Army (“Seller”) is the owner of the property located at 3030 Darbo Drive which contains 2.57 acres of land and all improvements thereon (“Property”), which is legally described in Exhibit A of the Purchase and Sale Agreement (“PSA”) attached hereto; and,
WHEREAS, the City of Madison (“City”) desires to purchase the Property from the Seller to provide the Seller with funding to redevelop the Seller’s Shelter for Women and Children on E. Washington Avenue, to landbank a property that is proximate to Bus Rapid Transit in order to support continued provision of essential community services and to provide the City with an additional site for creating the Darbo Dream; and,
WHEREAS, the Mayor directed the City’s Office of Real Estate Services to pursue the purchase of one or more properties suitable for such use, the Property was selected, and the negotiated terms are available in the PSA attached hereto; and,
WHEREAS, the City agrees that the Seller may lease the Property from the City after closing for rent of One Dollar ($1.00) per year, until such time as the Seller’s new facility is completed, subject to the terms and conditions of the Lease attached to the PSA as Exhibit B.
NOW, THEREFORE, BE IT RESOLVED that the City’s Common Council hereby authorizes the City’s execution of a Purchase and Sale Agreement, as Buyer, for the purchase of the Property with a purchase price of $3,300,000 subject to certain prorations and closing costs, and on substantially the same the terms and conditions contained in the PSA attached hereto; and,
BE IT FURTHER RESOLVED that the City’s Common Council hereby authorizes the City’s execution of a lease for $1 a year with the Seller for the continued use of the Property after closing on substantially the same the terms and conditions contained in the Lease included as Exhibit B of the PSA attached hereto; and,
BE IT FURTHER RESOLVED that City Staff are authorized to solicit and enter into contracts to pay for holding costs including, but not limited to the City’s maintenance and repair responsibilities outlined in the Lease, and after the Lease has expired and Seller has vacated the Property, grass cutting, snow removal, capital repairs and general maintenance; and,
BE IT FINALLY RESOLVED that the Mayor and Clerk are hereby authorized to sign, accept, and record any and all documents and legal instruments required to complete the transactions contemplated in this resolution, on a form and in a manner that has been approved by the City Attorney.