Operations at the City-owned facility located at 1204 West Gwinnett Street (commonly known as City Lot) will need to be relocated in preparation for the Arena and Canal District development. Part of the relocation involves certain Sanitation functions for which the purchase of real property located at 1809 West US Highway 80 is being considered. This facility is currently owned by Waste Management and consists of +/-34.30 acres, with +/-13.5 developable acres. On-site improvements include two buildings: a 12,000 SqFt office building and a 20,880 SqFt steel frame building currently being used for the parking and service of garbage trucks. Staff procured an appraisal from a well-qualified, MAI-certified appraiser, and the fair market value was determined at $3,450,000. Purchase price of the facility was negotiated at appraised value. If approved, staff will perform due diligence inspections, to include environmental testing prior to closing.

The sale includes a restriction against use as a transfer station for municipal waste, as well a repurchase option and right of first refusal in the event the City decides to sell within 10 years. Further request authorization for the City Manager to execute and associated closing documents.

This purchase was not contemplated when the 2019 capital budget was adopted by City Council.  In addition to the purchase price of the property, it is anticipated that certain due diligence costs will be incurred along with cosmetic improvements to the property for a total budget of $4.0 million.  In order to fund this purchase, staff has identified funds currently available in the Sanitation Contingency Fund in the amount of $2.1 million, leaving a shortfall of $1.9 million. Staff recommends funding the $1.9 million shortfall with a temporary interfund loan from the Water and Sewer Fund.  This interfund loan would be repaid by the Sanitation fund over 5 years at an interest rate of 2.0% beginning in 2020.

Approval