reunion arena land swap
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REAL ESTATE
EXCHANGE withHUNT-WOODBINE
Economic Development
CommitteeBriefingDecember 3, 2012
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Background
Southwest Downtown was historically thelocation of railroad yards and industrial uses
In the early 1970s, planning anddiscussions began to consider a new visionfor the area.
The City acquired property and undertookphysical land planning efforts to improveaccess and roadways and redefine majorland uses in the area.
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Land Use Map 1960
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Background
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Background
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1970
Land Use Map 1970
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Southwest Downtown - 1958
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Downtown Skyline Mid 1970s
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Background In 1974, the City of Dallas approved the Union
Terminal Project and Reunion Master Agreement
Subsequently, the City and Woodbine finalized aMaster Agreement covering properties owned byeach.
The Agreement provided for the exchange ofvarious tracts to allow for the development asenvisioned by the plan
It also required Hunt-Woodbine to develop the HyattRegency Hotel and remodel Union Station, and itrequired the City to build Reunion Arena
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Background
Development soon followedHyatt Hotel Union Station
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Reunion construction was launched in the
late 1970s
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Background
Construction of Reunion Arena Constructed in 1980
$27million
One-time home toDallas Stars, DallasMavericks, MLSDallas, and the DallasDesperados
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http://www.last.fm/venue/8796176+Reunion+Arena/images -
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Background
Convention Center Expansions
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Background By late 1990s, Dallas
Mavericks and Stars hadexpressed their desire for alarger, more modern arena
and many aspects of thefacility had becomeobsolete
June 30, 2008 ReunionArena was officially closed
November 2009, the arenafacility was imploded andsite was cleared
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Dallas Convention Center Omni Hotel
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Background As envisioned by the original Master Agreement,
the Hyatt Hotel, Reunion Arena and ReunionParking Garage were developed.
The Convention Center has continued to enjoymany successful expansions, but Reunion Arenaexpended its useful life.
Given the significant redevelopment potential,
both the City and Hunt-Woodbine concluded thata bold new vision could leverage existing assetsand maximize development opportunities.
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Do w n t o w n D a lla s 3 6 0 P la n
Ad op ted by Ci ty Cou n c il
April 14, 2011
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Sustainable Development and Construction 16
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Five Transformative Strategies:
Capitalize on Downtowns position as the regional transithub
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M a i n S t r e e tDis t r ic t
F a r m e r s M a r k et
Sou th Ar t s D i s t r i ct
La m a r S t r e e t
C o r r i d o rU n i o n S t a t io n
Five FocusAreas
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Five Focus
Areas 19
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Reunion/Union Station DistrictsAs Envisioned in the Dallas 360 Plan - 2011
This ambitiousdevelopment planwill require a
renewed level ofpublic/privatecooperation thatwas established in
the ReunionDistrict almost 40years ago.
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Reunion / Union Station
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Priority Action 7
Create a Master Development Plan for the Reunion /Union
Station Focus Area
New high intensity, mixed-usedestination corporate
headquarters Transfer/land swap of ReunionArena site to catalyzedevelopment
Coordinate with TIGERstreetcar project and D2planning
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Proposal to Facilitate
Redevelopment An amendment to the 1974 Master
Agreement to clarify Hunt-Woodbines
purchase option for surplus properties.
City determines that Reunion andRopeco tracts are surplus property.
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Proposal continued
Land exchange plus cash difference
City-owned (8.2 acres)
Reunion Arena Tract, 701 S. Sports Street
Ropeco Tract, 302 South Stemmons
Hunt-Woodbine owned (6.6 acres)
Cockrell Tract, 700 S. Stemmons Freeway
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Benefits of the Land Exchange
Reconfigures ownership of tractsReunion Arena and Ropeco sites contiguous
with Hyatt Hotel
Property adjacent to Convention Centerjoined under City ownership
Maximizes development potential for both
consolidated tracts situated near twomajor hotels and Union Station multi-modal transportation hub
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Increased potential for new development:
Adjacent to and overlooking Trinity RiverCorridor
Along planned streetcar alignment fromdowntown to North Oak Cliff
Furthers goal of Union Station as a multi-use,multi-modal transportation hub
Development potential may generateadditional tax base
Benefits of the Land Exchange
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Exchange considerations
Amendment of 1974 Master Agreementnecessary to clarify Hunt-Woodbines
purchase option price Performance of due diligence
Determination of fair market value
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1974 Master Agreement
If the City intends to declare the parcelsurplus, the Master Agreement providesthat the City must offer Hunt Woodbine thefirst purchase opportunity.
Also stipulates that the purchase price isestablished through a pricing formula.
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Proposed Amendment
Staff and Hunt-Woodbine propose amending thepricing formula to provide that the purchaseprice be at fair market value based on analysis
by independent appraisers engaged by the City. Originally agreed to contract for two appraisals
Later determined that one appraisers opinion of valuedid not appear to accurately reflect market conditions,
so that one was discarded and a third appraisalobtained
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Appraisals
Appraisals Obtained October 2012Appraiser A PSF Value
Combined City $35.00 $12,570,000
Cockrell Tract $35.00 $10,100,000Appraiser B PSF Value
Combined City Tracts $50.00 $18,041,000
Cockrell Tract $50.00 $14,467,000
Appraiser C PSF Value
Combined City $79.54 $28,700,000
Cockrell Tract $75.05 $21,700,000
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Environmental assessments obtainedReunion Arena Site (City)
Resource Environmental Consulting, Inc. (REC),Phases I and II
Additional testing by Terracon, Oct./Nov. 2012
Cockrell Tract (Hunt-Woodbine)
Terracon, Phases I and II Additional testing by Terracon and REC Oct./Nov.
2012
Exchange Due Diligence
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Environmental Testing Results
Agreed to calculate cleanup costs to residentialstandards (without deed restrictions or institutionalcontrols unrestricted use)
Environmental testing of both sites indicatessimilar type of contamination associated with fillmaterials, likely requiring excavation
Estimated Remediation Costs:
Reunion Tract: Current Estimate $4,401,000
Cockrell Tract: Current Estimate $3,425,000
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Exchange Values
Staff proposal recommends:
Appraisal values for properties: $65 psf
Minus remediation costs
Cash difference to be paid to City by HW
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Staff Recommendation
Reunion/Ropeco Tracts @ $65 psf $23,315,000
Reunion Remediation Cost ($4,401,000)
Reunion/Ropeco Tracts Value $18,914,000
Cockrell Tract @ $65 psf $18,792,000
Cockrell Remediation Cost ($3,425,000)
Cockrell Tract Value $15,367,000
DIFFERENCE paid to City $3,547,000
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Real Estate Exchange
Exchange Agreement specifies:
Exchange Valuations
Special Warranty DeedsRelease of liability for known environmental
conditions
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Next Steps
Brief City Council
December 5, 2012
City Council ConsiderationDecember 12, 2012
Master Agreement Amendment
Real Estate Exchange Agreement
S i bl D l d C i 39
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