PRESENTER: Presenter
Robert Camareno, City Manager
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SUBJECT: Title
Discuss and consider approval of the sale of 2.5 acres of real property by the City of New Braunfels to the San Antonio Food Bank and the authorization for the City Manager to execute the deed and related closing documents including an Amended Development Agreement for the property which is legally described as Lot 2, Block 1, NB Housing Partners Resource Center, a subdivision in Comal County, addressed as 1530 South Seguin Avenue.
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DEPARTMENT: City Manager’s Office
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COUNCIL DISTRICTS IMPACTED: 6
BACKGROUND INFORMATION:
Previously, on March 9, 2020, the City of New Braunfels approved the San Antonio Food Bank assuming the role of NB Housing Partners in developing a transitional family living facility on the city owned property located at 1530 South Seguin Avenue. The City and the Food Bank entered into a five year lease and development agreement. The San Antonio Food Banks successfully operates the New Braunfels Food Bank on the adjacent property. The San Antonio Food Bank has designed, engineered, and permitted the proposed transitional living facility at their own expense. The San Antonio Food Bank is ready to commence construction and expects to expend nine million dollars in the building of the transitional living facility. The City is willing to sell the property and enter into an amended development agreement with the San Antonio Food Bank.
The City asserts that selling the real property to the San Antonio Food Bank serves a public purpose to provide a transitional living facility for the those in need. The San Antonio Food Bank is planning for the entire complex will be devoted to leasing transitional living accommodations with below market rates to households earning 80 percent or less of the Median Family Income for the San Antonio-New Braunfels, TX HUD Metro FMR Area as determined by the U.S. Department of Housing and Urban Development.
The City will sell the property to the San Antonio Food Bank for $250,000.00 which will be secured by a promissory note, deed of trust and a restrictive covenant and repurchase option agreement. The restrictive covenant provides that the Food Bank commits to use the property for multi-family development where all units are leased to households earning 80 percent or less of the Median Family Income, described above for a period of twenty years. If the San Antonio Food Bank desires to sell the project before the expiration of the twenty years, the City will have the option to purchase the project from the Food Bank. If the project is not purchased by the City, then the City has the opportunity to recover a percentage of the real property’s value, depending when the project is sold to a third party with full value being recovered within the first ten years and a decreasing amount thereafter for the remaining ten years.
ISSUE:
Sale of property owned by the City of New Braunfels for a transitional housing development.
FISCAL IMPACT:
The property is being conveyed at below market price because of the public purpose it will serve. It is estimated that the total $250,000 acquisition price will be recovered through discounted (below market) rents to residents within twenty-four (24) months of the project’s opening.
Recommendation
RECOMMENDATION:
Staff recommends approval.