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February 8. 2011 11 - 71 - Adoption of a resolution authorizing the City Manager to execute a Cooperation Agreement, Deed, and any other documents necessary to convey those properties commonly referred to as the Desks, Inc., and Civic Center Parking Lot sites comprising all (or portions thereof) of 1 Water Street, 0 Water Street, 805 Guardian Court, 800 Crawford Street, and any associated easements or remnant and outlier parcels as may be determined necessary to the Economic Development Authority of the City of Portsmouth, Virginia. Vision Principles: A Robust and Prospering Economy, and Thriving Neighborhoods and a Sense of Community. Background: . The City of Portsmouth owns several lots in Downtown collectively totaling approximately 4.5 acres that form the properties commonly referred to as the Desk Inc. and Civic Center sites. . The properties are the subject of a Memorandum of Intent executed between the City and Oxford Properties, LLC dated July 31, 2010 wherein the City stated its desire to have the properties developed for a beneficial and taxable use that contributes to the quality of life and Oxford stated its desire to develop the property in accordance with the City's goals. . The properties have a zoning designation that allows for the development of multi-family units. The size and scope of the proposal by Oxford is such that a special use permit will be required. Nothing contained in the contemplated action suggests or implies the granting of such approvals. . The project consists of constructing two multi-family buildings containing 298 one and two bedroom apartment units with onsite parking and additional leased parking spaces to be reserved in the City's Water Street and County Street garages. . All due diligence contemplated under the MOl has been completed. The soils work done as part of this process reveals unsuitable subsurface material which will result in a significant increase to the developer's construction estimates. These indicate that both sites will require the foundations be constructed on deep piles. Additional work needed by Oxford will be addressed in the Sales and Purchase Agreement. . Oxford Properties has advised the City it wishes to proceed with negotiating the transaction. Discussion: . The project will have a significant positive impact on Downtown and is consistent with the City's comprehensive and area master plans. The addition of these buildings will bring an influx of new residents, have a beneficial fiscal impact, convert two vacant lots into income producing properties that house attractive structures and monetize the assets through sale to a private party. Financial impact: . There is no direct financial contribution to this development contemplated by the City. The project may involve a modest investment in offsite infrastructure which had previously been contemplated for these lots in the utilities master plan. . The buildings are projected to total approximately 300,000 square feet and have an estimated construction cost approaching $40,000,000. . Under the MOl Oxford properties proposed a cash settlement at closing valuing the properties at $4,500,000. Contract negotiations regarding a final sales price and payment structure will take into consideration the aforementioned concerns regarding soil conditions. These considerations have a direct bearing on the actual property value. . There will be a positive short term economic impact from the construction activity and the proceeds from the sale. . The property is currently not taxable and the City pays for its maintenance. These expenses in the City's operating budget will be eliminated. Consideration for the conversion of these lots from City owned properties utilized for surface parking to private use will need to be given.