Loading...
Transmittal - 7/4/2021 REDEVELOPMENT AGENCY of SALT LAKE CITY SALT LAKE CITY CORPORATION 451 SOUTH STATE STREET, ROOM 118 WWW.SLC.GOV · WWW.SLCRDA.COM P.O. BOX 145518, SALT LAKE CITY, UTAH 84114-5518 TEL 801-535-7240 · FAX 801-535-7245 MAYOR ERIN MENDENHALL Executive Director DANNY WALZ Director STAFF MEMO DATE: March 3, 2021 PREPARED BY: Kort Utley RE: Potential revisions to the Real Property Disposition Policy REQUESTED ACTION: Consideration of a resolution that revises the Real Property Disposition Policy POLICY ITEM: Real Property Disposition Policy BUDGET IMPACTS: N/A EXECUTIVE SUMMARY: Staff requests the Board of Directors (“Board”) consider a resolution that revises the Redevelopment Agency’s (“Agency”) Real Property Disposition Policy (“Policy”). The Policy was adopted in 2016, applies to all real property owned by the Agency and defines how properties are characterized (Tier 1 or Tier 2), the reporting of dispositions to the Board, methods of disposition, and the protocol for determining a given property’s sales/disposition price. The revisions under consideration include the following:  Specifically authorizing long-term ground leases as a form of land disposition; and,  Adding restrictions to how the Agency disposes of property when exclusively negotiating with adjacent property owners. Staff discussed modifications to the Policy with the Board at the November 11, 2020 meeting. At that time, the Board appeared to support the proposed modifications related to long-term ground leases. Some Board members expressed a desire to further discuss the section of the Policy that allows the Agency to exclusively negotiate with adjacent property owners for the disposition of Agency property. Revisions to the Policy that would restrict how the Agency disposes of property in these circumstances were discussed. In Attachment B: Proposed Revisions to the Real Property Disposition Policy, staff has proposed new restrictions to address Board members’ suggestions regarding exclusive negotiations with adjacent property owners. Per these new restrictions, the Agency would be required to receive at least 90% of the fair market value of the property being disposed of when exclusively negotiating with an adjacent property owner. This new requirement would apply only to the larger, more prominent properties owned by the Agency, which are defined in the Policy as “Tier 1” properties. These revisions are reflected in Attachment A: Resolution. A red-line format of the resolution showing the proposed revisions is shown as Attachment B: Proposed Revisions to the Real Property Disposition Policy. ANALYSIS & ISSUES: Acquisition and disposition of land is one of the primary tools utilized by the Agency to carry out its mission to revitalize neighborhoods and business district s. This tool, when used strategically, provides the Agency the ability to foster revit alization in a neighborhood by having direct control of various attributes of a redevelopment project, such as the project’s location, when it’s constructed, the use of the building once constructed, and fulfillment of specific design and placemaking objectives to best incorporate the project into the neighborhood. Proposed changes to the Policy regarding ground leases: The vast majority of Agency dispositions of real property are done through sale of the property, wherein the Agency transfers title to a buyer for a set fee exchanged at closing. There are circumstances when structuring a real estate project, however, when ground leases may be a prudent land disposition option for the Agency, therefore staff proposes revising the Policy to allow ground leases as a form of land disposition. A ground lease involves leasing land for a long-term period—typically for 50 to 99 years—to a tenant or lessee who constructs a building on the property. Tenants generally assume responsibility for any and all expenses during the lease term. This includes construction, repairs, renovations, improvements, taxes, insurance, and any financing costs associated with the project constructed on the property. Ground leases typically allow the landlord to assume ownership of all improvements on the property once the lease term expires. Two factors make ground leases worth considering when disposing of Agency property:  By retaining ownership of the underlying property, ground leases give the Agency an opportunity to realize the potential long-term economic value of its property while simultaneously achieving more immediate redevelopment goals via the tenant’s project constructed on the property.  Ground leases give the Agency’s private sector development partners an opportunity to develop a project on Agency property without the burden of significant upfront acquisition costs for land. Staff proposes that ground leases be handled similarly to for-sale transactions in the Land Disposition Policy. For example, if the Agency contemplates disposing of a property through a ground lease, it would categorize the property as Tier 1 or Tier 2 and report the disposition to the Board as directed by the Policy. The Agency would then market the property per the methods allowed in the Policy. In addition, the Agency would follow the Policy’s Sales Price Protocol whereby property discounts would be subject to approval by a majority vote o f the Board if property is to be leased at a discount greater than 10% from appraised fair market value. These revisions to the Policy that would allow long-term ground leases as a form of property disposition are represented in Attachment A: Resolution. Proposed changes to the Policy regarding exclusive negotiations: Per the Policy, the RDA may sell—or dispose of—real property in two ways: competitively market the property (e.g. through a request for proposals) or exclusively negotiate for the sale of the property. The RDA may only exclusively negotiate for the sale of property if one-of- six criteria outlined in the Policy is met. One of these criterion is as follows: “Disposition to an adjacent property owner to facilitate redevelopment objectives as defined in a project area strategic plan.” At the November 11, 2020 Board meeting, Board members discussed potential modifications to this language that would restrict how the Agency disposes of property when exclusively negotiating with adjacent property owners. Based on that discussion and subsequent conversations with Board members, staff proposes revising the Policy to include the new language underlined below: “Disposition to an adjacent property owner to facilitate redevelopment objectives as defined in a project area strategic plan. If the property being disposed of is a Tier 1 property, the price shall be at least 90% of the fair market value as determined by the Disposition Price Protocol. This modification would do three things:  Ensure the Agency receives fair compensation for its most premier properties in any exclusive negotiation with an adjacent property owner; and  Prevent circumstances in which developers may seek to acquire Agency Tier 1 property at a discount by acquiring a property adjacent to Agency property and subsequently requesting to exclusively negotiate with the Agency; and  Retain the Agency’s ability to exclusively negotiate with adjacent property owners for Tier 2 properties, when appropriate and according to the Disposition Price Protocol found in the Policy. These revisions that add restrictions to the Policy regarding the disposition of Tier 1 properties when exclusively negotiating with adjacent property owners are represented in Attachment A: Resolution. Staff proposes the Board consider these revisions to the Policy that address long-term ground leases and exclusive negotiations with adjacent property owners. ATTACHMENTS: A. Resolution B. Proposed Revisions to Real Property Disposition Policy REDEVELOPMENT AGENCY OF SALT LAKE CITY RESOLUTION NO. _______ Real Property Disposition Policy RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY REPEALING AND REPLACING THE REAL PROPERTY DISPOSITION POLICY WHREAS, on October 18, 2016, pursuant to Resolution No. R-36-2016, the Board of Directors of the Redevelopment Agency of Salt Lake City (“Board”) passed the Real Property Disposition Policy (“2016 Policy”), and WHEREAS, the Board now desires to repeal and replace the 2016 Policy, and WHEREAS, the Redevelopment Agency of Salt Lake City (“RDA”) was created to transact the business and exercise the powers provided for in the Utah Community Reinvestment Agency Act; and WHEREAS, the Utah Community Reinvestment Agency Act grants the RDA powers to sell, convey, grant, gift, or otherwise dispose of any interest in real property; and provide for project area development, and WHEREAS, the RDA utilizes real property disposition to implement project area plans, strategic plans, and Salt Lake City master plans. WHEREAS, the RDA’s disposition of real property includes the sale of real property or long-term lease of real property. Such leases of real property for durations greater than twenty-five years shall be referred to in this policy as “lease agreements.” NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY, the Real Property Disposition Policy adopted pursuant to Resolution No. R-36-2016 is repealed in its entirety and replaced with the following: 1. Administration and Approval Process. Unless otherwise designated herein, the administration and approval process for the disposition of RDA-owned real property shall be conducted in the following manner: a. The Board shall be provided reports on the status of all RDA-owned real properties, including properties actively being disposed of, as according to the Reporting procedures outlined herewith. b. As determined by the RDA Executive Director, RDA-owned properties may be identified as candidates for disposition and authorized to be disposed of according to the Methods of Disposition contained herewith. c. If a satisfactory offer is received on an RDA-owned property, and the disposition terms and conditions are approved by the RDA Executive Director, RDA staff shall dispose of the real property pursuant to the RDA’s administrative procedures, unless disposition terms are required to be forwarded to the Board for consideration and approval of the sales / lease price according to the Disposition Price Protocol outlined herewith. d. If the disposition requires the approval of the Board, upon approval of the disposition price by a majority vote of the Board real property disposition shall be arranged pursuant to the RDA’s administrative procedures. e. The RDA Executive Director may enter into exclusive negotiation, option to purchase, development agreements and lease agreements. 2. Real Property Disposition Scope. The policy applies to all real property owned by the RDA. 3. Real Property Categorization. All real property owned by the RDA shall be categorized as either Tier 1 or Tier 2. a. Tier 1 properties shall be real properties that are RDA-owned and meet at least one of the following categories: i. Property is specifically identified in a Salt Lake City adopted master plan. ii. Property is a parcel or parcel assemblage that totals two (2) or more contiguous acres in size. iii. Property is listed on the local or national register of historic places as historically significant. iv. Property is fronting or adjacent to city-owned property, other than a public street, of at least 0.5 acres in size. b. Tier 2 properties shall be those that are RDA-owned and are not otherwise included in Tier 1. 4. Reporting. Unless otherwise specified herein, RDA staff shall provide the Board with reports regarding the disposition and status of RDA-owned properties as follows: a. The RDA shall provide a written briefing to the Board, no less than semi- annually per fiscal year, which contains an inventory of all Tier 1 and Tier 2 properties. Such briefing shall also include an address and description of each property, including the approximate size and zoning; description of significant structures or improvements on the site; description of any interim uses occurring on the site; disposition status; and timeframe for potentially disposing of the property. b. Updates regarding the disposition process for Tier 1 properties shall be provided at one of the Agency’s public meetings at the following stages of the disposition process: i. Pre-Disposition Prior to marketing of the property, RDA staff shall provide an update to the Board as to the property’s reuse plan, method of disposition, timeline of disposition, and other information relevant to the disposition of the property. ii. Developer / lessee Selection RDA staff shall provide an update to the Board when a purchaser or lessee has been selected with which to negotiate terms of the disposition. iii. Development Agreement / Lease Agreement RDA staff shall provide an update to the Board when the RDA has entered into a real estate purchase agreement or lease agreement with the selected purchaser / lessee. 5. Methods of Disposition. Disposition of all RDA-owned real property shall abide by all applicable laws and be conducted in a competitive and transparent manner as deemed appropriate and effective. Further, disposition methods shall support the RDA and Salt Lake City objectives as outlined in master plans, project area plans, and other adopted policies. Disposition of property shall be consistent with the RDA’s Housing Policy to determine if the inclusion of affordable housing is required. All RDA-owned properties being disposed of shall be subject to a development agreement, if being sold, a lease agreement, if being leased, or other mechanism to ensure compliance with the intended reuse plan for the property. Unless otherwise specified herein, RDA-owned properties shall be disposed of through the use of the following methods: a. Competitively Marketed The RDA shall competitively market properties to create open and transparent exposure to the marketplace. Methods to competitively market properties are available for any RDA-owned property and include the following: i. Request for qualifications (RFQ): to competitively market the property through a time-limited qualifications-based selection process. ii. Request for proposals (RFP): to competitively market the property through a time-limited project-based selection process. iii. Market property on an open-ended basis: to competitively market the property through a listing with a property broker or other marketing channels. b. Exclusively Negotiated An exclusively negotiated disposition may be deemed appropriate and effective at a sales or lease price as determined by the Disposition Price Protocol of this policy, except as detailed in 5(b)(ii), and if at least one of the following criteria is met: i. The property is landlocked. ii. Disposition to an adjacent property owner to facilitate redevelopment objectives as defined in a project area strategic plan. If the property being disposed of is a Tier 1 property, the price shall be at least 90% of the fair market value as determined by the Disposition Price Protocol. iii. Disposition to a non-profit or governmental agency for a community development or public use. iv. Disposition of property that has been competitively offered with no competitive responses received. v. Disposition of property that has previously been used as a public right of way that is no longer required for such purpose. vi. If the property is being sold, the exchange of property to facilitate redevelopment objectives as defined in a project area strategic plan. 6. Disposition Price Protocol. Unless otherwise specified herein, RDA shall dispose of real property under the most advantageous terms that are appropriate for the circumstances, and shall abide to the methodology outlined herein as follows: a. The sales or lease price of the property shall be fair market value as determined by an RDA-commissioned appraisal that is based on an as-is appraisal premise. No Board approval shall be required for disposition at appraised fair market value. b. The sales or lease price may be discounted below fair market value to support the implementation of project area strategic plans. i. Property discounts shall be determined by a financial analysis of the project, including a gap analysis that demonstrates the property discount is necessary for the project to succeed. Market conditions, economic trends, and public benefits relating to affordable housing and economic development shall be considered when determining property discounts. ii. Property discounts are subject to approval by a majority vote of the Board if property is to be sold or leased at a discount greater than 10% from appraised fair market value. Passed by the Board of Directors of the Redevelopment Agency of Salt Lake City, this ____ day of ___, 2021. Ana Valdemoros, Chairperson Transmitted to the Executive Director on . The Executive Director: does not request reconsideration requests reconsideration at the next regular Agency meeting. Erin Mendenhall, Executive Director Approved as to form: Salt Lake City Attorney’s Office Allison Parks Attest: City Recorder ATTACHMENT B: PROPOSED REVISIONS TO THE REAL PROPERTY DISPOSITION POLICY REDEVELOPMENT AGENCY OF SALT LAKE CITY RESOLUTION NO. _______ Real Property Disposition Policy RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY REPEALING AND REPLACING THEADOPTING A REAL PROPERTY DISPOSITION POLICY WHREAS, on October 18, 2016, pursuant to Resolution No. R-36-2016, the Board of Directors of the Redevelopment Agency of Salt Lake City (“Board”) passed the Real Property Disposition Policy (“2016 Policy”), and WHEREAS, the Board of Directors of the Redevelopment Agency of Salt Lake City (the “Board”) Board now desires to repeal and replace formalize policies with respect to the Redevelopmentthe 2016 Policy Agency of Salt Lake City’s (“RDA”) real property disposition, and WHEREAS, the Redevelopment Agency of Salt Lake City (“RDA”) was created to transact the business and exercise the powers provided for in the Utah Community Reinvestment Agency Act; and WHEREAS, the Utah Community Reinvestment Agency Act grants the RDA powers to sell, convey, grant, gift, or otherwise dispose of any interest in real property; and provide for project area development, and WHEREAS, the RDA utilizes real property disposition to implement project area plans, strategic plans, and Salt Lake City master plans. WHEREAS, the RDA’s disposition of real property includes the sale of real property or long-term lease of real property. Such leases of real property for durations greater than twenty-five years shall be referred to in this policy as “lease agreements.” NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY, the Real Property Disposition Policy adopted pursuant to Resolution No. R-36-2016 is repealed in its entirety and replaced with the following:AS FOLLOWS: 1. Administration and Approval Process. Unless otherwise designated herein, the administration and approval process for the disposition of RDA-owned real property shall be conducted in the following manner: a. The Board shall be provided reports on the status of all RDA-owned real properties, including properties actively being disposed of, as according to the Reporting procedures outlined herewith. ATTACHMENT B: PROPOSED REVISIONS TO THE REAL PROPERTY DISPOSITION POLICY b. As determined by the RDA Executive Director, RDA-owned properties may be identified as candidates for disposition and authorized to be disposed of according to the Methods of Disposition contained herewith. c. If a satisfactory offer is received on an RDA-owned property, and the disposition terms and conditions are approved by the RDA Executive Director, RDA staff shall dispose of the real property pursuant to the RDA’s administrative procedures, unless disposition terms are required to be forwarded to the Board for consideration and approval of the sales / lease price according to the Sales Disposition Price Protocol outlined herewith. d. If the disposition requires the approval of the Board, upon approval of the sales disposition price by a majority vote of the Board real property disposition shall be arranged pursuant to the RDA’s administrative procedures. e. The RDA Executive Director may enter into exclusive negotiation, option to purchase, and development agreements and lease agreements. 2. Real Property Disposition Scope. The policy applies to all real property owned by the RDA. 3. Real Property Categorization. All real property owned by the RDA shall be categorized as either Tier 1 or Tier 2. a. Tier 1 properties shall be real properties that are RDA-owned and meet at least one of the following categories: i. Property is specifically identified in a Salt Lake City adopted master plan. ii. Property is a parcel or parcel assemblage that totals two (2) or more contiguous acres in size. iii. Property is listed on the local or national register of historic places as historically significant. iv. Property is fronting or adjacent to city-owned property, other than a public street, of at least 0.5 acres in size. b. Tier 2 properties shall be those that are RDA-owned and are not otherwise included in Tier 1. 4. Reporting. Unless otherwise specified herein, RDA staff shall provide the Board with reports regarding the disposition and status of RDA-owned properties as follows: a. The RDA shall provide a written briefing to the Board, no less than semi- annually per fiscal year, which contains an inventory of all Tier 1 and Tier 2 properties. Such briefing shall also include an address and description of each property, including the approximate size and zoning; description of significant structures or improvements on the site; description of any ATTACHMENT B: PROPOSED REVISIONS TO THE REAL PROPERTY DISPOSITION POLICY interim uses occurring on the site; disposition status; and timeframe for potentially disposing of the property. b. Updates regarding the disposition process for Tier 1 properties shall be provided at one of the Agency’s public meetings at the following stages of the disposition process: i. Pre-Disposition Prior to marketing of the property, RDA staff shall provide an update to the Board as to the property’s reuse plan, method of disposition, timeline of disposition, and other information relevant to the disposition of the property. ii. Developer / lessee Selection RDA staff shall provide an update to the Board when a purchaser or lessee has been selected with which to negotiate terms of the sale disposition. iii. Development Agreement / Lease Agreement RDA staff shall provide an update to the Board when the RDA has entered into a real estate purchase agreement or lease agreement with the selected purchaser / lessee. 5. Methods of Disposition. Disposition of all RDA-owned real property shall abide by all applicable laws and be conducted in a competitive and transparent manner as deemed appropriate and effective. Further, disposition methods shall support the RDA and Salt Lake City objectives as outlined in master plans, project area plans, and other adopted policies. Disposition of property shall be consistent with the RDA’s Housing Policy to determine if the inclusion of affordable housing is required. All RDA-owned properties being disposed of shall be subject to a development agreement, if being sold, a lease agreement, if being leased, or other mechanism to ensure compliance with the intended reuse plan for the property. Unless otherwise specified herein, RDA-owned properties shall be disposed of through the use of the following methods: a. Competitively Marketed The RDA shall competitively market properties to create open and transparent exposure to the marketplace. Methods to competitively market properties are available for any RDA-owned property and include the following: i. Request for qualifications (RFQ): to competitively market the property through a time-limited qualifications-based selection process. ii. Request for proposals (RFP): to competitively market the property through a time-limited project-based selection process. iii. Market property on an open-ended basis: to competitively market the property through a listing with a property broker or other marketing channels. b. Exclusively Negotiated An exclusively negotiated sale disposition may be deemed appropriate and ATTACHMENT B: PROPOSED REVISIONS TO THE REAL PROPERTY DISPOSITION POLICY effective at a sales or lease price as determined by the Disposition Price Protocol of this policy, except as detailed in 5(b)(ii), and only if at least one of the following criteria is met: i. The property is landlocked. ii. Disposition Sale to an adjacent property owner to facilitate redevelopment objectives as defined in a project area strategic plan. If the property being disposed of is a Tier 1 property, the price shall be at least 90% of the fair market value as determined by the Disposition Price Protocol. iii. Disposition Sale to a non-profit or governmental agency for a community development or public use. iv. Disposition Sale of property that has been competitively offered with no competitive responses received. v. Disposition Sale of property that has previously been used as a public right of way that is no longer required for such purpose. vi. If the property is being sold, the exchange of property to facilitate redevelopment objectives as defined in a project area strategic plan. 6. Disposition Sales Price Protocol. Unless otherwise specified herein, RDA shall dispose of real property under the most advantageous terms that are appropriate for the circumstances, and shall abide to the methodology outlined herein as follows: a. The sales or lease price of the property shall be fair market value as determined by an RDA-commissioned appraisal that is based on an as-is appraisal premise. No Board approval shall be required for disposition at appraised fair market value. b. Property The sales or lease price may be discounted below fair market value to support the implementation of project area strategic plans. i. Property discounts shall be determined by a financial analysis of the project, including a gap analysis that demonstrates the property discount is necessary for the project to succeed. Market conditions, economic trends, and public benefits relating to affordable housing and economic development shall be considered when determining property discounts. ii. Property discounts are subject to approval by a majority vote of the Board if property is to be sold or leased at a discount greater than 10% from appraised fair market value. ATTACHMENT B: PROPOSED REVISIONS TO THE REAL PROPERTY DISPOSITION POLICY Passed by the Board of Directors of the Redevelopment Agency of Salt Lake City, this ____ day of ___, 2021. Ana Valdemoros, Chairperson Transmitted to the Executive Director on . The Executive Director: does not request reconsideration requests reconsideration at the next regular Agency meeting. Erin Mendenhall, Executive Director Approved as to form: Salt Lake City Attorney’s Office Allison Parks Attest: City Recorder DEPARTMENT of ECONOMIC DEVELOPMENT WWW.SLCGOV.COM WWW.SLCRDA.COM WWW.SALTLAKEARTS.ORG ERIN MENDENHALL MAYOR EXECUTIVE DIRECTOR, RDA BEN KOLENDAR DIRECTOR DATE: November 19, 2020 PREPARED BY: Kort Utley RE: Revisions to Real Property Disposition Policy REQUESTED ACTION: Consideration of a resolution that revises the Real Property Disposition Policy POLICY ITEM: Real Property Disposition Policy BUDGET IMPACTS: N/A EXECUTIVE SUMMARY: Staff requests the Board of Directors (“Board”) consider a resolution that modifies the Redevelopment Agency’s (“Agency”) Real Property Disposition Policy (“Policy”). The modifications under consideration were discussed by the Board at the November 11, 2020 meeting and include the following:  Specifically authorizing long-term ground leases as a form of land disposition; and,  Clarifying that exclusively negotiated dispositions must follow the Disposition Price Protocol found in the Policy. These revisions are reflected in Attachment A: Resolution. A red-line format of the resolution showing the modifications to the existing policy is shown as Attachment B: Proposed Revisions to the Real Property Disposition Policy. Acquisition and disposition of land is one of the primary tools utilized by the Redevelopment Agency (“Agency”) to carry out its mission of neighborhood revitalization. This tool, when used strategically, provides the Agency with the ability to foster revitalization in a neighborhood by having direct control of various attributes of a redevelopment project , such as the project’s location, when it’s constructed, the use of the building once constructed, and fulfillment of specific design and placemaking objectives to best incorporate the project into the neighborhood. Authorizing long-term ground leases as a form of land disposition would provide the Agency with greater flexibility when structuring real estate transactions in a manner that maximizes public benefit. ANALYSIS & ISSUES: Disposition of Agency-owned property is governed by the Real Property Disposition Policy that was adopted by the Board in October, 2016 (“Existing Policy”). The Existing Policy applies to all real property owned by the Agency and defines how properties are characterized (Tier 1 or Tier 2), the reporting of dispositions to the Board, methods of disposition, and the protocol for determining a given property’s sales / disposition price. Proposed changes to the Existing Policy regarding ground leases: The vast majority of Agency dispositions of real property are done through sale of the property, wherein the Agency transfers title to a buyer for a set fee exchanged at closing. There are circumstances when structuring a real estate project, however, when ground leases may be a prudent land disposition option for the Agency, therefore staff proposes revising the Existing Policy to allow ground leases as a form of land disposition. A ground lease involves leasing land for a long-term period—typically for 50 to 99 years—to a tenant or lessee who constructs a building on the property. Tenants generally assume responsibility for any and all expenses during the lease term. This includes construction, repairs, renovations, improvements, taxes, insurance, and any financing costs associated with the project constructed on the property. Ground leases typically allow the landlord to assume ownership of all improvements on the property once the lease term expires. Two factors make ground leases an option to consider when disposing of Agency property:  By retaining ownership of the underlying property, ground leases give the Agency an opportunity to realize the potential long-term economic value of its property while simultaneously achieving more immediate redevelopment goals via the tenant’s project constructed on the property.  Ground leases give the Agency’s private sector development partners an opportunity to develop a project on Agency property without the burden of significant upfront acquisition costs for land. Staff proposes that ground leases be handled similarly to for-sale transactions in the Land Disposition Policy. For example, if the Agency contemplated disposing of a property through a ground lease, it would categorize the property as Tier 1 or Tier 2 and report the disposition to the Board accordingly. The Agency would then market the property per the methods allowed in the Existing Policy. In addition, the Agency would follow the Existing Policy’s Sales Price Protocol whereby property discounts would be subject to approval by a majority vote of the Board if property is to be leased at a discount greater than 10% from appraised fair market value. These potential revisions to the Existing Policy that would allow long-term ground leases as a form of property disposition are represented in Attachment A: Resolution. Proposed changes to the Existing Policy regarding exclusive negotiations: Per the Existing Policy, the RDA may sell—or dispose of—real property in two ways: competitively market the property (e.g. through a request for proposals) or exclusively negotiate for the sale of the property. The RDA may only exclusively negotiate for the sale of property if one-of-six criteria outlined in the Existing Policy is met. Staff proposes revising the Existing Policy to clarify that exclusively negotiated dispositions must follow the Disposition Price Protocol found in the policy. This revision emphasizes the requirement that any exclusively negotiated property leased or sold at a discount greater than 10% from appraised fair market value would require Board approval. ATTACHMENTS: A. Resolution B. Proposed Revisions to Real Property Disposition Policy REDEVELOPMENT AGENCY OF SALT LAKE CITY RESOLUTION NO. _______ Real Property Disposition Policy RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY REPEALING AND REPLACING THE REAL PROPERTY DISPOSITION POLICY WHREAS, on October 18, 2016, pursuant to Resolution No. R-36-2016, the Board of Directors of the Redevelopment Agency of Salt Lake City (“Board”) passed the Real Property Disposition Policy (“2016 Policy”), and WHEREAS, the Board now desires to repeal and replace the 2016 Policy, and WHEREAS, the Redevelopment Agency of Salt Lake City (“RDA”) was created to transact the business and exercise the powers provided for in the Utah Community Reinvestment Agency Act; and WHEREAS, the Utah Community Reinvestment Agency Act grants the RDA powers to sell, convey, grant, gift, or otherwise dispose of any interest in real property; and provide for project area development, and WHEREAS, the RDA utilizes real property disposition to implement project area plans, strategic plans, and Salt Lake City master plans. WHEREAS, the RDA’s disposition of real property includes the sale of real property or long-term lease of real property. Such leases of real property for durations greater than twenty-five years shall be referred to in this policy as “lease agreements.” NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY, the Real Property Disposition Policy adopted pursuant to Resolution No. R-36-2016 is repealed in its entirety and replaced with the following: 1. Administration and Approval Process. Unless otherwise designated herein, the administration and approval process for the disposition of RDA-owned real property shall be conducted in the following manner: a. The Board shall be provided reports on the status of all RDA-owned real properties, including properties actively being disposed of, as according to the Reporting procedures outlined herewith. b. As determined by the RDA Executive Director, RDA-owned properties may be identified as candidates for disposition and authorized to be disposed of according to the Methods of Disposition contained herewith. c. If a satisfactory offer is received on an RDA-owned property, and the disposition terms and conditions are approved by the RDA Executive Director, RDA staff shall dispose of the real property pursuant to the RDA’s administrative procedures, unless disposition terms are required to be forwarded to the Board for consideration and approval of the sales / lease price according to the Disposition Price Protocol outlined herewith. d. If the disposition requires the approval of the Board, upon approval of the disposition price by a majority vote of the Board real property disposition shall be arranged pursuant to the RDA’s administrative procedures. e. The RDA Executive Director may enter into exclusive negotiation, option to purchase, development agreements and lease agreements. 2. Real Property Disposition Scope. The policy applies to all real property owned by the RDA. 3. Real Property Categorization. All real property owned by the RDA shall be categorized as either Tier 1 or Tier 2. a. Tier 1 properties shall be real properties that are RDA-owned and meet at least one of the following categories: i. Property is specifically identified in a Salt Lake City adopted master plan. ii. Property is a parcel or parcel assemblage that totals two (2) or more contiguous acres in size. iii. Property is listed on the local or national register of historic places as historically significant. iv. Property is fronting or adjacent to city-owned property, other than a public street, of at least 0.5 acres in size. b. Tier 2 properties shall be those that are RDA-owned and are not otherwise included in Tier 1. 4. Reporting. Unless otherwise specified herein, RDA staff shall provide the Board with reports regarding the disposition and status of RDA-owned properties as follows: a. The RDA shall provide a written briefing to the Board, no less than semi- annually per fiscal year, which contains an inventory of all Tier 1 and Tier 2 properties. Such briefing shall also include an address and description of each property, including the approximate size and zoning; description of significant structures or improvements on the site; description of any interim uses occurring on the site; disposition status; and timeframe for potentially disposing of the property. b. Updates regarding the disposition process for Tier 1 properties shall be provided at one of the Agency’s public meetings at the following stages of the disposition process: i. Pre-Disposition Prior to marketing of the property, RDA staff shall provide an update to the Board as to the property’s reuse plan, method of disposition, timeline of disposition, and other information relevant to the disposition of the property. ii. Developer / lessee Selection RDA staff shall provide an update to the Board when a purchaser or lessee has been selected with which to negotiate terms of the disposition. iii. Development Agreement / Lease Agreement RDA staff shall provide an update to the Board when the RDA has entered into a real estate purchase agreement or lease agreement with the selected purchaser / lessee. 5. Methods of Disposition. Disposition of all RDA-owned real property shall abide by all applicable laws and be conducted in a competitive and transparent manner as deemed appropriate and effective. Further, disposition methods shall support the RDA and Salt Lake City objectives as outlined in master plans, project area plans, and other adopted policies. Disposition of property shall be consistent with the RDA’s Housing Policy to determine if the inclusion of affordable housing is required. All RDA-owned properties being disposed of shall be subject to a development agreement, if being sold, a lease agreement, if being leased, or other mechanism to ensure compliance with the intended reuse plan for the property. Unless otherwise specified herein, RDA-owned properties shall be disposed of through the use of the following methods: a. Competitively Marketed The RDA shall competitively market properties to create open and transparent exposure to the marketplace. Methods to competitively market properties are available for any RDA-owned property and include the following: i. Request for qualifications (RFQ): to competitively market the property through a time-limited qualifications-based selection process. ii. Request for proposals (RFP): to competitively market the property through a time-limited project-based selection process. iii. Market property on an open-ended basis: to competitively market the property through a listing with a property broker or other marketing channels. b. Exclusively Negotiated An exclusively negotiated disposition may be deemed appropriate and effective at a sales or lease price as determined by the Disposition Price Protocol of this policy, and if at least one of the following criteria is met: i. The property is landlocked. ii. Disposition to an adjacent property owner to facilitate redevelopment objectives as defined in a project area strategic plan. iii. Disposition to a non-profit or governmental agency for a community development or public use. iv. Disposition of property that has been competitively offered with no competitive responses received. v. Disposition of property that has previously been used as a public right of way that is no longer required for such purpose. vi. If the property is being sold, the exchange of property to facilitate redevelopment objectives as defined in a project area strategic plan. 6. Disposition Price Protocol. Unless otherwise specified herein, RDA shall dispose of real property under the most advantageous terms that are appropriate for the circumstances, and shall abide to the methodology outlined herein as follows: a. The sales or lease price of the property shall be fair market value as determined by an RDA-commissioned appraisal that is based on an as-is appraisal premise. No Board approval shall be required for disposition at appraised fair market value. b. The sales or lease price may be discounted below fair market value to support the implementation of project area strategic plans. i. Property discounts shall be determined by a financial analysis of the project, including a gap analysis that demonstrates the property discount is necessary for the project to succeed. Market conditions, economic trends, and public benefits relating to affordable housing and economic development shall be considered when determining property discounts. ii. Property discounts are subject to approval by a majority vote of the Board if property is to be sold or leased at a discount greater than 10% from appraised fair market value. Passed by the Board of Directors of the Redevelopment Agency of Salt Lake City, this ____ day of ___, 2020. Amy Fowler, Chairperson Transmitted to the Executive Director on . The Executive Director: does not request reconsideration requests reconsideration at the next regular Agency meeting. Erin Mendenhall, Executive Director Approved as to form: Salt Lake City Attorney’s Office Allison Parks ATTACHMENT B: PROPOSED REVISIONS TO THE REAL PROPERTY DISPOSITION POLICY REDEVELOPMENT AGENCY OF SALT LAKE CITY RESOLUTION NO. _______ Real Property Disposition Policy RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY REPEALING AND REPLACING THEADOPTING A REAL PROPERTY DISPOSITION POLICY WHREAS, on October 18, 2016, pursuant to Resolution No. R-36-2016, the Board of Directors of the Redevelopment Agency of Salt Lake City (“Board”) passed the Real Property Disposition Policy (“2016 Policy”), and WHEREAS, the Board of Directors of the Redevelopment Agency of Salt Lake City (the “Board”) Board now desires to repeal and replace formalize policies with respect to the Redevelopmentthe 2016 Policy Agency of Salt Lake City’s (“RDA”) real property disposition, and WHEREAS, the Redevelopment Agency of Salt Lake City (“RDA”) was created to transact the business and exercise the powers provided for in the Utah Community Reinvestment Agency Act; and WHEREAS, the Utah Community Reinvestment Agency Act grants the RDA powers to sell, convey, grant, gift, or otherwise dispose of any interest in real property; and provide for project area development, and WHEREAS, the RDA utilizes real property disposition to implement project area plans, strategic plans, and Salt Lake City master plans. WHEREAS, the RDA’s disposition of real property includes the sale of real property or long-term lease of real property. Such leases of real property for durations greater than twenty-five years shall be referred to in this policy as “lease agreements.” NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY, the Real Property Disposition Policy adopted pursuant to Resolution No. R-36-2016 is repealed in its entirety and replaced with the following:AS FOLLOWS: 1. Administration and Approval Process. Unless otherwise designated herein, the administration and approval process for the disposition of RDA-owned real property shall be conducted in the following manner: a. The Board shall be provided reports on the status of all RDA-owned real properties, including properties actively being disposed of, as according to the Reporting procedures outlined herewith. ATTACHMENT B: PROPOSED REVISIONS TO THE REAL PROPERTY DISPOSITION POLICY b. As determined by the RDA Executive Director, RDA-owned properties may be identified as candidates for disposition and authorized to be disposed of according to the Methods of Disposition contained herewith. c. If a satisfactory offer is received on an RDA-owned property, and the disposition terms and conditions are approved by the RDA Executive Director, RDA staff shall dispose of the real property pursuant to the RDA’s administrative procedures, unless disposition terms are required to be forwarded to the Board for consideration and approval of the sales / lease price according to the Sales Disposition Price Protocol outlined herewith. d. If the disposition requires the approval of the Board, upon approval of the sales disposition price by a majority vote of the Board real property disposition shall be arranged pursuant to the RDA’s administrative procedures. e. The RDA Executive Director may enter into exclusive negotiation, option to purchase, and development agreements and lease agreements. 2. Real Property Disposition Scope. The policy applies to all real property owned by the RDA. 3. Real Property Categorization. All real property owned by the RDA shall be categorized as either Tier 1 or Tier 2. a. Tier 1 properties shall be real properties that are RDA-owned and meet at least one of the following categories: i. Property is specifically identified in a Salt Lake City adopted master plan. ii. Property is a parcel or parcel assemblage that totals two (2) or more contiguous acres in size. iii. Property is listed on the local or national register of historic places as historically significant. iv. Property is fronting or adjacent to city-owned property, other than a public street, of at least 0.5 acres in size. b. Tier 2 properties shall be those that are RDA-owned and are not otherwise included in Tier 1. 4. Reporting. Unless otherwise specified herein, RDA staff shall provide the Board with reports regarding the disposition and status of RDA-owned properties as follows: a. The RDA shall provide a written briefing to the Board, no less than semi- annually per fiscal year, which contains an inventory of all Tier 1 and Tier 2 properties. Such briefing shall also include an address and description of each property, including the approximate size and zoning; description of significant structures or improvements on the site; description of any ATTACHMENT B: PROPOSED REVISIONS TO THE REAL PROPERTY DISPOSITION POLICY interim uses occurring on the site; disposition status; and timeframe for potentially disposing of the property. b. Updates regarding the disposition process for Tier 1 properties shall be provided at one of the Agency’s public meetings at the following stages of the disposition process: i. Pre-Disposition Prior to marketing of the property, RDA staff shall provide an update to the Board as to the property’s reuse plan, method of disposition, timeline of disposition, and other information relevant to the disposition of the property. ii. Developer / lessee Selection RDA staff shall provide an update to the Board when a purchaser or lessee has been selected with which to negotiate terms of the sale disposition. iii. Development Agreement / Lease Agreement RDA staff shall provide an update to the Board when the RDA has entered into a real estate purchase agreement or lease agreement with the selected purchaser / lessee. 5. Methods of Disposition. Disposition of all RDA-owned real property shall abide by all applicable laws and be conducted in a competitive and transparent manner as deemed appropriate and effective. Further, disposition methods shall support the RDA and Salt Lake City objectives as outlined in master plans, project area plans, and other adopted policies. Disposition of property shall be consistent with the RDA’s Housing Policy to determine if the inclusion of affordable housing is required. All RDA-owned properties being disposed of shall be subject to a development agreement, if being sold, a lease agreement, if being leased, or other mechanism to ensure compliance with the intended reuse plan for the property. Unless otherwise specified herein, RDA-owned properties shall be disposed of through the use of the following methods: a. Competitively Marketed The RDA shall competitively market properties to create open and transparent exposure to the marketplace. Methods to competitively market properties are available for any RDA-owned property and include the following: i. Request for qualifications (RFQ): to competitively market the property through a time-limited qualifications-based selection process. ii. Request for proposals (RFP): to competitively market the property through a time-limited project-based selection process. iii. Market property on an open-ended basis: to competitively market the property through a listing with a property broker or other marketing channels. b. Exclusively Negotiated An exclusively negotiated sale disposition may be deemed appropriate and ATTACHMENT B: PROPOSED REVISIONS TO THE REAL PROPERTY DISPOSITION POLICY effective at a sales or lease price as determined by the Disposition Price Protocol of this policy, and only if at least one of the following criteria is met: i. The property is landlocked. ii. Disposition Sale to an adjacent property owner to facilitate redevelopment objectives as defined in a project area strategic plan. iii. Disposition Sale to a non-profit or governmental agency for a community development or public use. iv. Disposition Sale of property that has been competitively offered with no competitive responses received. v. Disposition Sale of property that has previously been used as a public right of way that is no longer required for such purpose. vi. If the property is being sold, the exchange of property to facilitate redevelopment objectives as defined in a project area strategic plan. 6. Disposition Sales Price Protocol. Unless otherwise specified herein, RDA shall dispose of real property under the most advantageous terms that are appropriate for the circumstances, and shall abide to the methodology outlined herein as follows: a. The sales or lease price of the property shall be fair market value as determined by an RDA-commissioned appraisal that is based on an as-is appraisal premise. No Board approval shall be required for disposition at appraised fair market value. b. Property The sales or lease price may be discounted below fair market value to support the implementation of project area strategic plans. i. Property discounts shall be determined by a financial analysis of the project, including a gap analysis that demonstrates the property discount is necessary for the project to succeed. Market conditions, economic trends, and public benefits relating to affordable housing and economic development shall be considered when determining property discounts. ii. Property discounts are subject to approval by a majority vote of the Board if property is to be sold or leased at a discount greater than 10% from appraised fair market value. ATTACHMENT B: PROPOSED REVISIONS TO THE REAL PROPERTY DISPOSITION POLICY Passed by the Board of Directors of the Redevelopment Agency of Salt Lake City, this ____ day of ___, 2020. Amy Fowler, Chairperson Transmitted to the Executive Director on . The Executive Director: does not request reconsideration requests reconsideration at the next regular Agency meeting. Erin Mendenhall, Executive Director Approved as to form: Salt Lake City Attorney’s Office Allison Parks DEPARTMENT of ECONOMIC DEVELOPMENT WWW.SLCGOV.COM WWW.SLCRDA.COM WWW.SALTLAKEARTS.ORG ERIN MENDENHALL MAYOR EXECUTIVE DIRECTOR, RDA BEN KOLENDAR DIRECTOR DATE: August 21, 2020 PREPARED BY: Kort Utley RE: Potential revisions to Real Property Disposition Policy REQUESTED ACTION: Briefing and policy discussion POLICY ITEM: Real Property Disposition Policy BUDGET IMPACTS: N/A EXECUTIVE SUMMARY: Staff would like to discuss potential revisions to the Redevelopment Agency’s (“Agency”) Real Property Disposition Policy with the Board of Directors (“Board”). The potential revisions would do the following: • Specifically authorize long-term ground leases as a form of land disposition; and, • Clarify the circumstances in which the RDA can exclusively negotiate the disposition of a property. These revisions are reflected in red-line format in Attachment A: Proposed Revisions to Real Property Disposition Policy, which staff submits to the Board for discussion. Acquisition and disposition of land is one of the primary tools utilized by the Redevelopment Agency (“Agency”) to carry out its mission of neighborhood revitalization. This tool, when used strategically, provides the Agency with the ability to foster revitalization in a neighborhood by having direct control of various attributes of a redevelopment project, such as the project’s location, when it’s constructed, the use of the building once constructed, and fulfillment of specific design and placemaking objectives to best incorporate the project into the neighborhood. Authorizing long-term ground leases as a form of land disposition would provide the Agency with greater flexibility when structuring real estate transactions in a manner that maximizes public benefit. ANALYSIS & ISSUES: Disposition of Agency-owned property is governed by the Real Property Disposition Policy that was adopted by the Board in October, 2016 (“Existing Policy”). The Existing Policy applies to all real property owned by the Agency and defines how properties are characterized (Tier 1 or Tier 2), the reporting of dispositions to the Board, methods of disposition, and the protocol for determining a given property’s sales / disposition price. Proposed changes to the Existing Policy regarding ground leases: The vast majority of Agency dispositions of real property are done through sale of the property, wherein the Agency transfers title to a buyer for a set fee exchanged at closing. There are circumstances when structuring a real estate project, however, when ground leases may be a prudent land disposition option for the Agency, therefore staff proposes revising the Existing Policy to allow ground leases as a form of land disposition. A ground lease involves leasing land for a long-term period—typically for 50 to 99 years—to a tenant or lessee who constructs a building on the property. Tenants generally assume responsibility for any and all expenses during the lease term. This includes construction, repairs, renovations, improvements, taxes, insurance, and any financing costs associated with the project constructed on the property. Ground leases typically allow the landlord to assume ownership of all improvements on the property once the lease term expires. Two factors make ground leases an option to consider when disposing of Agency property: • By retaining ownership of the underlying property, ground leases give the Agency an opportunity to realize the potential long-term economic value of its property while simultaneously achieving more immediate redevelopment goals via the tenant’s project constructed on the property. • Ground leases give the Agency’s private sector development partners an opportunity to develop a project on Agency property without the burden of significant upfront acquisition costs for land. Staff proposes that ground leases be handled similarly to for-sale transactions in the Land Disposition Policy. For example, if the Agency contemplated disposing of a property through a ground lease, it would categorize the property as Tier 1 or Tier 2 and report the disposition to the Board accordingly. The Agency would then market the property per the methods allowed in the Existing Policy. In addition, the Agency would follow the Existing Policy’s Sales Price Protocol whereby property discounts would be subject to approval by a majority vote of the Board if property is to be leased at a discount greater than 10% from appraised fair market value. These potential revisions to the Existing Policy that would allow long-term ground leases as a form of property disposition are represented in Attachment A: Proposed Revisions to the Real Property Disposition Policy. Proposed changes to the Existing Policy regarding exclusive negotiations: Per the Existing Policy, the RDA may sell—or dispose of—real property in two ways: competitively market the property (e.g. through a request for proposals) or exclusively negotiate for the sale of the property. The RDA may only exclusively negotiate for the sale of property if one-of-six criteria outlined in the Existing Policy is met. Staff proposes revising the Existing Policy to clarify that exclusively negotiated dispositions must follow the Disposition Price Protocol found in the policy. This revision emphasizes the requirement that any exclusively negotiated property leased or sold at a discount greater than 10% from appraised fair market value would require Board approval. ATTACHMENTS: A. Proposed Revisions to Real Property Disposition Policy ATTACHMENT A: Proposed Revisions to Real Property Disposition Policy RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY ADOPTING A REAL PROPERTY DISPOSITION POLICY WHEREAS, the Board of Directors of the Redevelopment Agency of Salt Lake City (the “Board”) desires to formalize policies with respect to the Redevelopment Agency of Salt Lake City’s (“RDA”) real property disposition, and WHEREAS, the Redevelopment Agency of Salt Lake City (“RDA”) was created to transact the business and exercise the powers provided for in the Utah Community Reinvestment Agency Act; and WHEREAS, the Utah Community Reinvestment Agency Act grants the RDA powers to sell, convey, grant, gift, or otherwise dispose of any interest in real property; and provide for project area development, and WHEREAS, the RDA utilizes real property disposition to implement project area plans, strategic plans, and Salt Lake City master plans. WHEREAS, the RDA’s disposition of real property includes the sale of real property or long-term lease of real property. Such leases of real property for durations greater than twenty five years shall be referred to in this policy as “lease agreements.” NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY, AS FOLLOWS: 1. Administration and Approval Process. Unless otherwise designated herein, the administration and approval process for the disposition of RDA-owned real property shall be conducted in the following manner: a. The Board shall be provided reports on the status of all RDA-owned real properties, including properties actively being disposed of, as according to the Reporting procedures outlined herewith. b. As determined by the RDA Executive Director, RDA-owned properties may be identified as candidates for disposition and authorized to be disposed of according to the Methods of Disposition contained herewith. c. If a satisfactory offer is received on an RDA-owned property, and the disposition terms and conditions are approved by the RDA Executive Director, RDA staff shall dispose of the real property pursuant to the RDA’s administrative procedures, unless disposition terms are required to be forwarded to the Board for consideration and approval of the sales / lease price according to the Sales Disposition Price Protocol outlined herewith. d. If the disposition requires the approval of the Board, upon approval of the sales disposition price by a majority vote of the Board real property disposition shall be arranged pursuant to the RDA’s administrative procedures. e. The RDA Executive Director may enter into exclusive negotiation, option to purchase, and development agreements and lease agreements. 2. Real Property Disposition Scope. The policy applies to all real property owned by the RDA. 3. Real Property Categorization. All real property owned by the RDA shall be categorized as either Tier 1 or Tier 2. a. Tier 1 properties shall be real properties that are RDA-owned and meet at least one of the following categories: i. Property is specifically identified in a Salt Lake City adopted master plan. ii. Property is a parcel or parcel assemblage that totals two (2) or more contiguous acres in size. iii. Property is listed on the local or national register of historic places as historically significant. iv. Property is fronting or adjacent to city-owned property, other than a public street, of at least 0.5 acres in size. b. Tier 2 properties shall be those that are RDA-owned and are not otherwise included in Tier 1. 4. Reporting. Unless otherwise specified herein, RDA staff shall provide the Board with reports regarding the disposition and status of RDA-owned properties as follows: a. The RDA shall provide a written briefing to the Board, no less than semi- annually per fiscal year, which contains an inventory of all Tier 1 and Tier 2 properties. Such briefing shall also include an address and description of each property, including the approximate size and zoning; description of significant structures or improvements on the site; description of any interim uses occurring on the site; disposition status; and timeframe for potentially disposing of the property. b. Updates regarding the disposition process for Tier 1 properties shall be provided at one of the Agency’s public meetings at the following stages of the disposition process: i. Pre-Disposition Prior to marketing of the property, RDA staff shall provide an update to the Board as to the property’s reuse plan, method of disposition, timeline of disposition, and other information relevant to the disposition of the property. ii. Developer / lessee Selection RDA staff shall provide an update to the Board when a purchaser or lessee has been selected with which to negotiate terms of the sale disposition. iii. Development Agreement / Lease Agreement RDA staff shall provide an update to the Board when the RDA has entered into a real estate purchase agreement or lease agreement with the selected purchaser / lessee. 5. Methods of Disposition. Disposition of all RDA-owned real property shall abide by all applicable laws and be conducted in a competitive and transparent manner as deemed appropriate and effective. Further, disposition methods shall support the RDA and Salt Lake City objectives as outlined in master plans, project area plans, and other adopted policies. Disposition of property shall be consistent with the RDA’s Housing Policy to determine if the inclusion of affordable housing is required. All RDA-owned properties being disposed of shall be subject to a development agreement, if being sold, a lease agreement, if being leased, or other mechanism to ensure compliance with the intended reuse plan for the property. Unless otherwise specified herein, RDA-owned properties shall be disposed of through the use of the following methods: a. Competitively Marketed The RDA shall competitively market properties to create open and transparent exposure to the marketplace. Methods to competitively market properties are available for any RDA-owned property and include the following: i. Request for qualifications (RFQ): to competitively market the property through a time-limited qualifications-based selection process. ii. Request for proposals (RFP): to competitively market the property through a time-limited project-based selection process. iii. Market property on an open-ended basis: to competitively market the property through a listing with a property broker or other marketing channels. b. Exclusively Negotiated An exclusively negotiated sale disposition may be deemed appropriate and effective at a sales or lease price as determined by the Disposition Price Protocol of this policy, and only if at least one of the following criteria is met: i. The property is landlocked. ii. Disposition Sale to an adjacent property owner to facilitate redevelopment objectives as defined in a project area strategic plan. iii. Disposition Sale to a non-profit or governmental agency for a community development or public use. iv. Disposition Sale of property that has been competitively offered with no competitive responses received. v. Disposition Sale of property that has previously been used as a public right of way that is no longer required for such purpose. vi. If the property is being sold, the exchange of property to facilitate redevelopment objectives as defined in a project area strategic plan. 6. Disposition Sales Price Protocol. Unless otherwise specified herein, RDA shall dispose of real property under the most advantageous terms that are appropriate for the circumstances, and shall abide to the methodology outlined herein as follows: a. The sales or lease price of the property shall be fair market value as determined by an RDA-commissioned appraisal that is based on an as-is appraisal premise. No Board approval shall be required for sale disposition at appraised fair market value. b. Property The sales or lease price may be discounted below fair market value to support the implementation of project area strategic plans. i. Property discounts shall be determined by a financial analysis of the project, including a gap analysis that demonstrates the property discount is necessary for the project to succeed. Market conditions, economic trends, and public benefits relating to affordable housing and economic development shall be considered when determining property discounts. ii. Property discounts are subject to approval by a majority vote of the Board if property is to be sold or leased at a discount greater than 10% from appraised fair market value. Passed by the Board of Directors of the Redevelopment Agency of Salt Lake City, this ____ day of ___, 2020 Amy Fowler, Chairperson Transmitted to the Executive Director on . The Executive Director: does not request reconsideration requests reconsideration at the next regular Agency meeting. Erin Mendenhall, Executive Director Approved as to form: Salt Lake City Attorney’s Office Allison Parks