HomeMy WebLinkAbout131-13 RESOLUTIONRESOLUTION NO. 131-13
A RESOLUTION TO REQUEST THAT THE ADMINISTRATION
NEGOTIATE A LAND SALE AGREEMENT TO CONVEY ABOUT 14.9
ACRES TO A BIOSCIENCE COMPANY PLANNING TO BUILD A
FACILITY IN THE INDUSTRIAL PARK
WHEREAS, the City Council has long supported economic development of clean and
high technology industry in Fayetteville; and
WHEREAS, the Arkansas Economic Development Commission and Arkansas Governor
have agreed to assist a bioscience company to build and operate a new facility in the Fayetteville
Industrial Park if the City of Fayetteville will also provide some economic incentives to facilitate
this project; and
WHEREAS, the City Council requests that the Administration negotiate a land sale
agreement with this bioscience company to purchase about 14.9 acres of land in the Industrial
Park at a reduced cost of $15,000.00 per acre as part of the required participation with the
Arkansas Economic Development Commission to incentivize this company to locate its new
facility here.
NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby requests
that the Administration to negotiate a land sale contract with this bioscience company to be
presented in the future to the City Council for its consideration and final approval.
PASSED and APPROVED this 4th day of June 2013.
APPROVED:
ATTEST:
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By: By: 4n,4"_
�kfbELD ,RAN, Mayor SONDRA E. SMITH, City Clerk/Treasurer
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City of Fayetteville Staff Review Form
City Council Agenda Items
and
Contracts, Leases or Agreements
6/4/2013
City Council Meeting Date
Agenda Items Only
David Jurgens Utilities Utilities
Submitted By Division Department
$ 74,500 Miscellaneous
Cost of this request Category / Project Budget Program Category / Project Name
1010.6600.7602.40 Transfers Out
Account Number Funds Used to Date Program / Project Category Name
General
Project Number Remaining Balance Fund Name
Budgeted Item Budget Adjustment Attached 0
Depa nt ❑itctor
City Attorney
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Date
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Finance and Internal Services Director Date
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Date
Comments:
Previous Ordinance or Resolution #
Original Contract Date:
Original Contract Number:
Received in City
Clerk's Office
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Received in
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Mayor's Office
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Revised January 15, 2009
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CITY COUNCIL AGENDA MEMO
n � Qj� MEETING DATE OF JUNE 4,2013
a 4 THE CITY OF FAYETTEVILLE, ARKANSAS
ARKANSAS
To: Fayetteville City Council
Thru: Mayor Lioneld Jordan
Don Man, Chief of Staff
From: David Jurgens, Utilities Director
Date: May 22, 2013
Subject: Sale of 14.9 Acres of Land in the In stria] Park to Unnamed Poultry Science Company
RECOMMENDATION
City Staff recommends approving the Mayor and City Attorney to negotiate a real estate sales contract with an unnamed poultry
science company for $223,500.00 for the sale of approximately 14.9 acres of land owned by the City of Fayetteville water and
sewer utility on Morningside Drive in the Industrial Park, and approve a budget adjustment. The contract will be brought back
to Council for approval once negotiated.
BACKGROUND
The City of Fayetteville, the Arkansas Economic Development Commission (AEDC), and the Arkansas Governor have been
approached by an unnamed poultry science to find a site suitable for construction of a research and manufacturing facility. The
company is a bioscience company specializing in the development and commercialization of science -based probiotic products
for the poultry industry.
Through negotiations between the Fayetteville Chamber of Commerce, the AEDC, and the company, the company has stated an
intent to construct and occupy a new facility at the Morningside Drive site that will move or create a total of at least 60 jobs
with an average annual salary of $65,000 within five years to this location. The company further has stated the intent that
construction of the facility will begin within 12 months of acceptance of this offer.
The current proposal is to sell the property to the company at a reduced rate of $15,000 per acre. In order for this project to be
eligible for AEDC funding support, the City must contribute to the economic development in some way. With the current
proposal, the City's contribution is in the form of the discounted price per acre (the established asking price has been $20,000,
which is what the Water/Sewer fund paid the general fund when the land was transferred in April, 2003) as well as assistance
with on -site development including possible work on storm drainage, pavement, street work, and sidewalk work, all within the
public right of way. The value of this work is estimated at $200,000. Payment for the cost of the land will be amortized over 20
years with the first 5 years fixed at an interest rate of the Federal Reserve Rate plus one percent (1 %). At the end of the 5th
year, the City and the company will renegotiate the remaining 15 years based on the Federal Reserve Rate plus one percent (1%)
at that time.
City Code §34.27 establishes specific requirements regarding public notice of the sale of real property. Additionally, the City
Council must establish that this land is no longer needed for municipal purposes. As the Utility has other land adjacent to this
site, this land is no longer needed for municipal purposes. All Code requirements have been met.
BUDGETIMPACT
$223,500 in sale revenue will be paid to the Water/Sewer fund. The budget adjustment is to appropriate $74,500 in the general
fund that will be transferred to the Water/Sewer fund to make the Water/sewer fund whole from the land sale.
Attachments: Location Map (wide area)
Detail Map
Tentative Site Layout
Chamber Letter to AEDC including Economic Development Information
City Attorney Memo of May 9, 2013
Budget Adjustment
Unnamed Sale Morningside CCMemo May13
RESOLUTION NO.
A RESOLUTION TO REQUEST THAT THE ADMINISTRATION
NEGOTIATE A LAND SALE AGREEEMENT TO CONVEY ABOUT 14.9
ACRES TO A BIOSCIENCE COMPANY PLANNING TO BUILD A
FACILITY IN THE INDUSTRIAL PARK
WHEREAS, the City Council has long supported economic development of clean
and high technology industry in Fayetteville; and
WHEREAS, the Arkansas Economic Development Commission and Arkansas
Governor have agreed to assist a bioscience company to build and operate a new facility
in the Fayetteville Industrial Park if the City of Fayetteville will also provide some
economic incentives to facilitate this project; and
WHEREAS, the City Council requests that the Administration negotiate a land
sale agreement with this bioscience company to purchase about 14.9 acres of land in the
Industrial Park at a reduced cost of $15,000.00 per acre as part of the required
participation with the Arkansas Economic Development Commission to incentivize this
company to locate its new facility here.
NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby requests
that the Administration to negotiate a land sale contract with this bioscience company to be
presented in the future to the City Council for its consideration and final approval.
PASSED and APPROVED this 4th day of June 2013.
APPROVED:
IC
ATTEST:
LIMA
LIONELD JORDAN, Mayor SONDRA E. SMITH, City Clerk/Treasurer
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PHASE TWO
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DMASTERPLAN WITH PHASING
SCALE. NOT TO SCALE
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February 7, 2013
Sarah Clark
Fayetteville
Chamber of Commerce
Project Manager, Business Development
Arkansas Economic Development Commission
900 West Capitol, Suite 400
Little Rock, AR 72201
501-682-1260 (office)
501-580-0274 (cell)
Dear Sarah:
The philosophy of the City of Fayetteville and its citizenry has been one of building a quality of
place for our community. As such, Mayor Jordan, the City Council, and the Fayetteville
Chamber place the highest priority in investing in the infrastructure within the city. They look at
infrastructure such as excellent roads, schools, and amenities. We believe that by investing in
infrastructure, Fayetteville will become a desired location for businesses to prosper and for
residents to call home. The City of Fayetteville has invested in its infrastructure in the past,
current, and in the future.
1) Citizens of Fayetteville approved a tax increase in 2011 to raise funds to expand and
renovate its Fayetteville High School. This is a $94 million project divided in 2 phases.
Phase 1 is already completed and Phase 2 will be completed by 2014. Phase 1 included
an 850-seat performing arts center; a 2,200-seat sports arena with two practice gyms and
locker rooms; and classrooms for drama, band, orchestra, and choir. Also included is a
student cafeteria that seats 600 students.
2) Citizens of Fayetteville, together with the rest of the state, approved a half cent sales tax
in November, 2012 (for the next 10 years), to raise funds for infrastructure. Specifically,
northwest Arkansas where Fayetteville is located, will see Interstate 540 expand from 4-
to 6-lanes from Fayetteville to Bella Vista. This year, five out of 17, I-540 projects will
get underway; two in Benton County and three in Washington County. All 17 projects
will start in the next 5 years and all are scheduled to be finished in the next 10 years. In
addition to these highway projects, the City of Fayetteville will enjoy $12 million of turn
back monies from this tax to improve city streets and roads over the next 10 years.
3) Within the Fayetteville Commerce District where the site is located, the City of
Fayetteville has made improvements to it since last year. It added 29 public street lights
to improve night lighting there. This year, the City will be building and connecting
sidewalks in the district and putting up additional way -finding signs to help
truckers/visitors find their way to the district. It is also improving the turn points on
123 West Mountain * P.O. Box 4216 * Fayetteville, AR 72702-4216* TEL 479. 521. 1710 * FAX 479. 1791 * www.fayettevillear.com
Page 2
Armstrong and Morningside with 15th Street. Road improvements are currently
underway on Hwy 265 and Cato Springs Road to help with accessing to interstate
highways. Fifteenth Street and Morningside/City Lake Road are in the work plans for
improvement as well. This improvement will cost the City more than $100,000.
1) Apart from schools and roads, the City of Fayetteville is known for its trails, parks, arts,
entertainment, and cultural offerings, thus making it a desired location for families and
workers to live and play. The City is able to recruit and retain local and outside talents.
The City builds about 3 miles of trail each year. Beginning this year, it will increase
spending on building sidewalks within the city, starting in subdivisions located close by
to schools.
2) The University of Arkansas is a great asset to companies like "THE UN -NAMED
POULTRY SCIENCE COMPANY" for its research and development capabilities and the
workforce it produces. The U of A has seen an increase of student enrollment of 1,500
students a year for the past three years. This trend is expected to continue for the next
few more years. This growth showed a desire from students to seek training at this
facility over others in the nation. The university, since 2001, has invested more than $1
billion in capital expenditures. Currently, it has $300 million worth of projects
happening on campus with many more in different stages of planning.
3) As a result of all these work, the Fayetteville MSA has enjoyed a net positive population
growth and an unemployment rate below that of the nation. The Cost of Living Index for
2012 just came out —Fayetteville MSA is ranked #6 as the least expensive MSA amongst
all the MSAs under study (307). Fayetteville MSA is the only MSA from Arkansas that
made that list and there was no MSA from Missouri that showed up in the top 10
ranking. This is a publication by the Council of Community and Economic Research.
We consider "THE UN -NAMED POULTRY SCIENCE COMPANY" a home grown company
because of its UA origins and we are excited and proud of its growth and plans for the future.
We are confident that Pacific Vet Group will agree that its expansion should be back in
Fayetteville where "THE UN -NAMED POULTRY SCIENCE COMPANY" will have access to
intrinsic resources that it may not be able to find elsewhere. Fayetteville wishes to be "THE UN-
NAMED POULTRY SCIENCE COMPANY"'s partner to help it grow. As such, the City will
work with "THE UN -NAMED POULTRY SCIENCE COMPANY" to expedite their expansion
process and put its project on fast track. The Fayetteville Chamber, being the economic
developer for the city, will be the contact for this project.
In addition, the City is pleased to offer a price reduction of $5,000 off the asking price of
$20,000 per acre for the 14.9 acres of land owned by the City in the Fayetteville Commerce
District. This represents a $74,500 direct benefit to "THE UN -NAMED POULTRY SCIENCE
COMPANY". Since this is a green site, the City will assist with on -site development in terms of
public right of way and to facilitate access in the areas of culverts & storm drainage, concrete
pavements such as entry drives, asphalt pavement, curbs & gutters, and sidewalk. City
Page 3
assistance will be limited to public areas only as regulations do not permit city to work on private
property.
This offer is construed based on "THE UN -NAMED POULTRY SCIENCE COMPANY"'s
expansion plan presented to us. "THE UN -NAMED POULTRY SCIENCE COMPANY"'s plan
calls for moving existing and new jobs to a total of at least 60 jobs with an average annual salary
of $65,000 within 5 years and that construction shall begin within 12 month upon acceptance of
this offer. Furthermore, "THE UN -NAMED POULTRY SCIENCE COMPANY" will move
into the new location once construction is completed.
We look forward to working with you and "THE UN -NAMED POULTRY SCIENCE
COMPANY" on this exciting project.
Yours truly,
Steve Clark
President & CEO
Project Summary - Confidential
COMPANY BACKGROUND:
In 2003, the company was created from research carried out within the University of Arkansas' Division
of Agriculture. This company was purchased by another company, a leading global distributor of animal
health products, in 2008 to form UN -NAMED POULTRY SCIENCE COMPANY, and their poultry
health products are now among the most researched and proven in their class. UN -NAMED POULTRY
SCIENCE COMPANY -USA, headquartered in Washington County, grew its revenue from $250K in
2008 to $8M in 2012, and the company's goal is to reach $50M in annual revenues by 2018. The
company needs a new campus to expand, and is looking at acreage in Arkansas, Missouri, and
Oklahoma.
This company fits the goals of the Governor's strategic plan for economic development in several ways.
• First, it is an entrepreneurial organization with roots in research conducted at the University of
Arkansas; currently all of UN -NAMED POULTRY SCIENCE COMPANY -USA's products are
invented and manufactured in Arkansas.
• Also, the company produces environmentally friendly products that serve one of the state's
largest industries, helping poultry producers meet the increasingly stringent demands for healthy,
sustainable production practices.
• Moreover, UN -NAMED POULTRY SCIENCE COMPANY -USA pays wages in excess of 150%
of the state and county average hourly wage, often hiring Masters and Doctorate program
graduates of the UA.
• The company is also a global enterprise, deriving nearly half of its revenues from exports.
PROJECT PARAMETERS:
Location: Fayetteville, Washington County
Jobs: The company is committed to creating 47 new
jobs by 2018 with an average wage of approximately $32/hour ($66,500/year).
Investment: Phase I will include a $5M investment in
new buildings and Phase II will include an approximate $12-15M investment in new buildings
and expansion.
Departmental Correspondence
RKANSA
Kit Williams
City Attorney
Jason B. Kelley
TO: Mayor Jordan Assistant City Attorney
Don Marr, Chief of Staff
Paul Becker, Finance Director
David Jurgens, Utilities Director
FROM: Kit Williams, City Attorney
DATE: May 9, 2013
RE: Sale of Water and Sewer land in Industrial Park to new industry
I believe that the City of Fayetteville can sell the necessary acreage to the
proposed new industry for $15,000.00 per acre as the City's required (by the
Arkansas Economic Development Commission) support for this economic
development project. Although this is $5,000.00 less than the normal asking price
for our other available Industrial Park property, the long term economic benefits to
our City, Citizens and existing businesses from this project with its quality, high
paying jobs justifies this proposed reduced price offering. I do recommend that the
Water and Sewer Fund that currently owns this land be compensated for this offer
to sell at what might be below the value of the land (in a trade for other city land)
it acquired about a decade ago.
We need to begin immediately the Public Notification process required by
Section 34.27 of the Fayetteville Code (copy attached) for the sale of City
property. We simply need to mail notices to adjoining landowners, post signs, on
the property and publish a notice in the paper at least 15 days before the City
Council meeting in which a Resolution for the sale is considered by the City
Council. This is the same process used in the sale of the 2 acres of the old Tyson
factory site. Jeremy Pate did that notification and therefore would be very "up to
speed" on what is needed.
City of Fayetteville, Arkansas v12-0724 C. 6
Budget Adjustment Form Industrial Para[ Land Sale
e 0112
Budget Year Division: Citywide Request Date Adjustment Number
2013 1
Department: Citywide
5/13/2013
BUDGET ADJUSTMENT DESCRIPTION ! JUSTIFICATION
$74,500 in the Transfer to Water & Sewer account to reimburse the Water & Sewer Fund for market value of the
sale of 14.9 acres of Industrial Park Property.
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Department Director
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Date
5•z,3-2013
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Date
Chief of jalff Date
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Prepared By: Kevin Springer
Reference:
Budget & Research Use Only
Type: A B C CD E
General Ledger Date
Posted to General Ledger
Checked ! Verified
Springer, Kevin
I,
Initial date
Initial Rate
TOTAL BUDGET ADJUSTMENT
74,500 74,500
Increase / (Decrease) Project.Sub
Account Name
Number_
Expense Revenue Number
Transfer to Water & Sewer
_Account
1010.6600.7602.40 —
74,500 - 57018 . 5400
Use of fund balance
1010 0001 4999.99
74,500
HABudgetlBudget Adjustments12013_Budget\Kevin1BA2013_IPark_Sale_WS_Transfer.xls 1 of 1