Memo-August 14, 2008 to qtA- Yect-
MEMORANDUM
TO: Dennis Koellermeier
FROM: Tim Ramis
Rob Yamachika
DATE: August 14, 2008
RE: Canterbury Property Surplus and Sale
File No. 50014-36792
The purpose of this memorandum is to provide an overview of the City of Tigard's
process for declaring the property at 10310 SW Canterbury Lane, Tigard (2SI 11BCO2600)
("Canterbury Property") as surplus and purchasing it for park purposes.
SUMMARY
The following steps must be taken to declare the unused portion of the Canterbury
Property as surplus and have the City of Tigard purchase it for park purposes.
1. The portion of the Canterbury Property that is not retained for water system use }
must and has been partitioned by way of a property line adjustment,recorded in
Washington County,May 19, 2008, document No. 2008-45199. 11k�y
SR Ct e2., The Owners (IWB members)must have an affirmative vote of 3 out of 4 of the n
resoiLch8� representative Owner jurisdictions to sell the property.
YV,3 S • 3. The surplus property must be, and was appraised September 24, 2007, at a market
value of$605,000.
4. Set a public hearing before City Council for sale of property. �t�ys
5. Publish notice in newspaper at least 5 days before hearing.��
6. Hold hearing and solicit public testimony to determine if sale of parcel is in public i ecu-v 2
interest.
7. Council determines if it will offer property for sale anderm
set terms. It must reserve = C,_�et
not less than 50 x 50 foot easement for future water use,and ca onservation
easement for the Tigard House. ��
8. Council states that the City of Tigard has right of first refusal and will bid.
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9. Publish public notice soliciting sealed bids at least once in newspaper at least twos' V
weeks prior to bid deadline; bid will state that a right of first refusal in favor of
the City of Tigard exists on the property. aQ
10. If there are no other bids, the City's bid at the appraised value will be accepted. If
there are other bids and it is higher than the City's bid then the City has the right
of first refusal and can match the highest bid or sell to higher bidder.
11. Distribute proceeds per section 11 of Tenancy in Common Agreement and section
6 of IWB Resolution 07-02.
DISCUSSION
The following provides a summary of the resolutions,tenancy in common agreement and
the City of Tigard's surplus property code provisions relied upon in determining the steps
required to declare the unused portion of the Canterbury Property as surplus and have the City of
Tigard purchase it for park purposes.
Intergovermnental Water Board Resolution No. 07-02
On April 11, 2007, Intergovernmental Water Board("IWB")made up of the Cities of
Tigard, Durham, King City and the Tigard Water District("TWD") adopted Resolution 07-02,
recommending to the Tigard City Council that a portion of the Canterbury Property be declared
surplus and addresses other issues related to the disposition of the Canterbury Property.
IWD's Resolution 07-02 states that a portion of the water facility known as the
Canterbury property is not being used for water operations and the City of Tigard would like to
purchase the unused portion of the Property for a park. At the time of the resolution the owner of
record of the Property was the TWD,who authorized the sale of the property, at not less than the
appraised value to Tigard.
The IWB Resolution 07-02 provides that the portion of the Canterbury Property not used
for water purposes shall be partitioned. This was actually done by lot line adjustment as
evidenced by document No. 2008-45199, recorded in Washington County, May 19, 2008.
The portion of the Canterbury Property that is not retained in fee for water system use("Surplus
Property") shall be offered for sale to Tigard. (07-02 §1). The IWB recommended to the Tigard
City Council that the Surplus Property be declared surplus according to the City of Tigard's
surplus property procedures.
In any conveyance of the Surplus Property the grantor shall reserve not less than a 50x50
foot easement for future water use in the southeast corner of the Surplus Property and a
conservation easement for the area now leased to the Tigard Area Historical and Preservation
Association. The conservation easement is to be limited to the sole use of maintenance of the
historical John Tigard House and no other purpose. (07-02 §3).
The City of Tigard at its initiative and expense may conduct an independent appraisal and
title search of the portion of the Surplus Property offered for sale. The Surplus Property shall be
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offered for sale at its fair market value as determined by the appraisal or by any commercially
reasonable means. (07-02 §4).
The City of Tigard shall have the right of first refusal on reasonable terms, including a
reasonable time limit within which the option must be irrevocably exercised,to purchase the
Surplus Property at the appraised priced. The appraisal shall reflect the value of the reserved
easements. (07-02 §5). Proceeds from the sale of the Property shall be credited to the Water
Capital Improvement Project Fund. (07-02 §6).
City of Tigard Resolution 07-42 and Tenancy in Com-r- on Agreement
The Tigarde City Council adopted Resolution 07-42 on June 26, 2007 authorizing the
City's representative to the IWB to vote on and approve: (1)the amendments to the 1993 IGAs
with King City,TWD and Durham; (2) execute the tenants in common agreements for the water
building property and the Canterbury Property and (3)execute the bargain and sale deeds for the
same properties from TWD to the IWB member jurisdictions as tenants in common.
The Tenancy in Common Agreement("TIC")provides the following percentage
ownership as tenants in common:
Owners- Tigard 70%
Tigard Water District 22%
King City 5.5%
Durham 2.5%
The TIC provides that the Owners have determined that the preferred disposition of the
Surplus Property is that it be sold under the conditions set forth in IWB Resolution 07-02.
The TIC provides that the proceeds received from any sale of the Property to the extent
that the proceeds are not needed for debt service, anticipated expenses and reasonable reserves
for contingencies as determined by the Owners, shall be retained by the IWB as reserves for
capital projects. Notwithstanding the foregoing,the Owners may determine to use part or all of
said proceeds to reduce or repay any mortgage indebtedness, contract, or other liability incurred
in connection with the Property. (TIC § 11).
The selling price of the Property shall be established through 50014-36792 appraisal
performed by an appraisal company highly experienced in valuation of properties similar to the
Canterbury Property and selected by mutual agreement of Seller and Purchaser, except the value
of the improvements on the Property, which shall be valued according to the System Assets and
Liabilities Final Report prepared by Economic and Engineering Services, Inc. dated November
1994. (TIC § 18.2).
The Owners may sell the Surplus Property upon an affirmative vote of 3 out of 4 of the
representative Owner jurisdictions and the net proceeds distributed under the terms of Section
11. (TIC § 19).
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Cily of Ti d MgWgival Code Section 3.44.015 Disposaj of Pro erkP ovi i ns
Tigard's Code requires that when a particular parcel is proposed for sale by the City that
the matter be set for a City Council hearing. Notice of the hearing shall be published once in the
newspaper at least 5 days prior to the hearing and describe the property proposed for sale. TMC
3.44.015(A),(B). An appraisal shall be conducted prior to the sale of the property. This
appraisal may be ordered prior to or after the hearing. The appraisal may be made public to the
public at the hearing at the Council's discretion. TMC 3.44.015(C). Public testimony shall be
solicited at the hearing to determine if a sale of any parcel is in the public interest. TMC
3.44.015(D). After the hearing,the Council shall determine whether it will offer the property for
sale and what the minimum acceptable terms shall be. TMC 3.44.015(E).
If an offer to sell is authorized by the Council, a notice soliciting sealed bids shall be
published at least once in the newspaper at least two weeks prior to the bid deadline. TMC
3.44.015(F). If one or more bides are received at or above the minimum acceptable terms the
highest bid shall be accepted and the sale shall be completed. TMC 3.44.015(G). If no
acceptable bids are received the Council may (1) alter or keep the minimum terms and hold
another sale or(2) alter or keep the minimum terms and list the property for six months with a
real estate broker. TMC 3.44.015(H).
After expiration of the listing period the property shall be removed from the market. Any
decision to sell the property once it has been removed from the market requires the entire
procedure to be repeated. TMC 3.44.015(I).
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