Fiscal Note
Under terms of the sale and lease agreements, economic impacts may be anticipated in three areas. First, the building improvement would be sold to the purchasers / lessees for $101,000. Next, a 99 year ground lease would generate $3,600 per year, with a 2% annual escalator. And finally, upon expiration of the ground lease, the City is obligated to repurchase the building improvement. Assuming a 2% discount rate, the present value of the building improvement sale and ground lease payments is $457,400. The repurchase at the end of the 99 year ground is to be based upon independent appraisals commissioned by each party. If the building improvement is purchased at fair market value, this would represent the exchange of a cash assets for a real estate asset. Assuming that the building could be sold again for cash at fair market value, the repurchase provision would have no impact upon the net present value calculation.
Project #30 of the 2012 Parks Division 2012 Adopted Capital Budget provides that "proceeds from the sale or lease of all properties within the [James Madison] Park will be divided equally between James Madison Park and general parklands."
Title
Approving the sale of the residential structure located at 640 East Gorham Street (the “Building Improvement”) within James Madison Park to Joe Lusson and Aleen Tierney (the “Lessees”) and approving a ground lease (the “Ground Lease”) for the land underneath said Building Improvement (the “Leased Land”).
Body
WHEREAS, on April 14, 2004, the Madison Board of Park Commissioners declared the Building Improvement located at 640 East Gorham Street, but not the land underneath it, surplus to the needs of the City of Madison Parks Division; and
WHEREAS, the Mayor established the James Madison Park Disposal Surplus Criteria and Selection Committee (the “Committee”) pursuant to Madison General Ordinance 8.075 Disposal of Surplus City Real Property; and
WHEREAS, the Committee identified the type(s...
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