PortofWallaWalla

DowntownWallaWalla
InvestmentOpportunity
COMMUNITYPRESENTATIONAUGUST25,2014
PortInvestmentOpportunity
ThePortofWallaWallahasbeenapproachedbyPatriciaBrunzell,Presidentof
TeagueMotorCompanyconcerningherfamilysinterestinsellingtheir
downtownWallaWallarealestateholdingstothePortofWallaWalla.
SalesPrice
CurrentAssessedValuePerWallaWallaCounty: $1,847,200
TeagueMotorCompanyFairMarketValue: $2,309,625
SalesPrice
CurrentAssessedValuePerWallaWallaCounty: $1,847,200
TeagueMotorCompanyFairMarketValue: $2,309,625
TeagueMotorCompanySalesPriceto
PortofWallaWalla: $1,800,000
TeagueMotorCompanytotakeataxdeductionbysellingtheproperty
belowfairmarketvaluetothePort.IRSallowsacharitabledeductionfor
contributionsmadetogovernmentalentitiesincludingpolitical
subdivisionsofstategovernment.
PatBrunzellandherbrotherwanttoseearedevelopmentplanthattheir
familycanbeproudof.Iftheredevelopmenthasapublicelementtoit,
theywantitnamedaftertheirfamily.
OptionAgreement
EffectiveDateofAgreementtoJanuary9,2015 $10,000
January10,2015 June30,2015 $15,000
July1,2015 February4,2016 $22,200
TotalOptionmoney: $47,200
ClosingcannotoccursoonerthanFebruary4,2016andnolaterthanFebruary15,
2016
Taxpurposes
ExistingAutoDealershipleasedoesnotexpireuntilJanuary31,2016
WhyPortofWallaWalla
Involvement?
Asacountywideeconomicdevelopmentagency,wetrytofacilitateeconomic
developmentthroughoutallthecommunitiesweserve.Duringthepastfew
years,businessleadsandeconomicdevelopmentopportunitieshaveresultedin
thePortmakingsignificantinvestmentsinthewesternportionofWallaWalla
county.WhilethePorthasnotmadeinvestmentsindowntownWallaWalla
recently,weareinterestedindoingsowhenopportunitiespresentthemselves.
BurbankBusinessPark $4.3million
DoddRoadBusinessPark $4.2million
WhyPortofWallaWalla
Involvement?
Porthasauniqueopportunitytohelpfacilitatetheredevelopmentofseveral
importantparcelsofpropertyindowntownWallaWalla.Multipleparcelsrarely
comeupforsaleatonetime.
Communitywillbebetterservedbyhavingaunitedredevelopmentstrategyfor
theseparcels,inlieuofTeagueMotorssellingthemoneparcelatatime.
CraftsmanDistrict:
Wouldliketoexploretheconceptofcreatingacraftsmansdistrictinthetwoexistingbuildings.
Progressivecitieshavedevelopedthesetypesofdistrictsjustoffoftheirmainstreets.Thepublic
canseeproductsbeingmadeandthentrythem.Amicrobreweryordistilleryclustercouldbe
established.Theyaregrowinginpopularityacrossthecountry.Theairportswineincubator
programcouldalsobeexpandeddowntown.
ImportantNote:
Currentdowntownzoningdoesnotpermitanytypeofmanufacturing.Citywouldneedtochangethe
zoning,whichcouldalsobenefitotherpropertyowners.
Portwouldnotexerciseitsoptiontopurchaseuntiltherevisedzoningisinplace.
HowCouldThePropertyBe
Redeveloped?
MarketplaceDistrict: PortofChelanModel PybusMarket
HowCouldThePropertyBe
Redeveloped?
FinancialModel
PybusMarket
PortofChelan PropertyAcquisition $1,350,000
SenatorMurray HUDGrant $1,400,000
*LRFFinancing $2,000,000
PrivatePartner(MikeWalker) $2,700,000
$7,450,000
*LocalRevitalizationFinancing(LRF)TaxIncrementFinancing
PubliclyFunded
RedevelopmentScenario
ThePortisnotlookingatmakingacommunitydonation.Weareinterestedinaddingtothe
economicvitalityofdowntownWallaWallawiththePortobtainingareasonablereturnon
investment.
Theredevelopmentplanneedstobeacommunityplanwithpublicinputandstakeholderinput.
ItcannotbeperceivedasaPortdictatedplan.
Thefeasibilitystudieswillneedtohaveverydetailedandrealisticoperatingproformas.
Securingstateandfederalgrantsandloansfortheredevelopmentwilllikelybecritical.ThePort
couldalsoaccessthelocal.09%economicdevelopmentsalestaxfund.
ThePorthasthefinancialcapacitytopurchasetheproperties.However,allPortrelatedprojects
competefortheallocationofcapitaldollarswithinthePortsbudget.Thoseprojectswiththe
highestpublicbenefit(jobsandnewprivatesectorinvestment)areprojectsthatreceivecapital
dollars.
Apubliclyfundedredevelopmentdonecorrectlybenefitsprivatesectorbusinesses.
PrivateSectorFacilitation
Thecraftsmandistrictand/ormarketplacedistrictmaynotprovefeasible.
DuringtheoptionperiodandevenifthePortweretoacquiretheproperty,the
Portwouldbeopentoprivatesectordevelopmentconcepts.ThePort,byhaving
securedareasonablepricefortheproperty,willmakeiteasiertoattracta
privatedeveloper.
Itisimportanttonote,thePortcannotsellpropertyforspeculativepurposes.If
thepropertyweresoldtotheprivatesectoritwouldbeontheconditionthata
specificdevelopmentplanwouldbeimplemented.
Otherconsiderations
EnvironmentalConsiderations:
Thereareatleasttwoundergroundstoragetanksthathavebeenpumpedoutandfilled.The
Portwillhavesomeenvironmentalduediligencetocomplete.
CurrentTenant:
Cardealershiprelocationwillneedtobeaddressed.LeaseexpiresJanuary31,2016.
Parking:
ThenumberonecomplaintfordecadesindowntownWallaWallaisthelackofparking. Port
couldbepartofthesolutionbysettingasideparcelsforpublicparking.
Otherconsiderations
PortCompetitionConcern:
ThePortwillbecomeadirectcompetitorwithprivatepropertyownersin
leasingspaceindowntownWallaWalla.ThePortleasesitspropertybelow
marketvalue,therebyundercuttingprivatepropertyrentalrates.
Portsgoalistogrowtheeconomicpie,notsubdivideitintosmallerpieces.
Porthasreturnoninvestmentrequirementsforallofitsproperties.
NextSteps
PortCommissionwantsinputfromdowntownWallaWallaprivatepropertyownersandadvocates
fordowntown.
PortCommissionvoteonwhethertosecureanoptiontopurchasetheTeagueMotorCompany
Property
PortCommissioners:
PeterSwant,District1
5201120
district1@portwallawalla.com
MikeFredrickson,District2
5222272
district2@portwallawalla.com
RonDunning,District3
5296043
district3@portwallawalla.com