HomeMy WebLinkAboutIR 8858INFORMAL REPORT TO CITY COUNCIL MEMBERS
I. Introduction:
To the Mayor and Members of the City Council
No. 8858
July 24, 2007
SUBJECT: City Hall Update — Lancaster Post Office Due Diligence
City Council was previously briefed on four options for future City Hall operations. These options
were: A) status quo (continue leasing space as needed), B) expand /renovate existing City Hall
and purchase TCC May Owen Bldg, C) purchase /renovate Lancaster Post Office, and D) new
construction. Direction was given to seek additional input from citizens as requested by Council
Members and continue to gather additional information necessary to make a more informed
decision about all of the factors related to the Post Office acquisition.
II. Citizen Input
Presentations were requested to be made in four Council districts in January, February, and
March 2007. The number of citizens directly expressing a preference for any one of the options
was not statistically significant (only 46 people). Of those that responded, the preferences were:
A) 24 %, B) 7 %, C) 54 %, and D) 15 %. When given a choice to hear a presentation about City
Hall or other City issues, only a small minority chose to listen to the presentation about City Hall.
Previous attempts to gather citizen input using flyers in water bills, newspaper articles, town hall
meeting, and cable TV produced similar low response.
III. Lancaster Post Office Evaluation
The Staubach Company was previously selected to be the City's real estate consultants while
developing City Hall options with Carter Burgess. They have been working with the USPS
representative to resolve property line ambiguity between the Commissary structure and the T&P
Terminal Building, as well as research options for relocating the postal service functions into a
smaller facility. Negotiations with Staubach for their completion of the due diligence phase have
successfully concluded. An M&C will be presented to City Council on July 31, 2007, for approval
of the due diligence phase. This M &C will include completion of due diligence for the Post Office
property, development of various financial models with projected cash flow for self financing and
developer financing, evaluation of historic tax credits, and negotiating any property acquisitions.
There is also a provision for future design and construction consultation services to be negotiated
at a later date if appropriate.
Staubach is recommending that the City move forward with a non- binding Letter of Intent to
purchase the Post Office. This will allow them to establish an agreed value for the property with
USPS, along with an agreed period of time that the price is valid. Staubach will present Ttions
for the City to consider, such as an outright acquisition of the property (with and without 3 party
development), or a turnkey lease option with upfront costs being borne by a Td party developer.
While the Postal Service initially expressed interest in acquiring the site of our former Downtown
Service Center at Cherry Street as a condition of the sale of their existing facility, they have now
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS
�I 1#4
To the Mayor and Members of the City Council
No. 8858
July 24, 2007
SUBJECT: City Hall Update — Lancaster Post Office Due Diligence
dropped this requirement and agreed to work out a simple acquisition of the Lancaster Post
Office independent of any other transactions. The M &C will contain provisions for Staubach to
assist in the development of options for a replacement facility for the Post Office if necessary.
Once Staubach has completed the due diligence and is ready to make recommendations, a
Council workshop will be set up to have all options explained and the merits /drawbacks of each
can be addressed. City Council direction will be sought as to whether to continue pursuing the
Post Office option for City Hall expansion, or whether another option is preferred.
This report is being provided for informational purposes. Should you have any questions, please
contact Glenn Balog, Facilities Manager, X2028.
Charles R. Boswell
City Manager
ISSUED SY THE CITY MANAGER
FORT WORTH, TEXAS