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14 - Event Center - Donation of BuildingNo. 14 T TO: Mayor, Mayor Pro Tem & City Council FROM: Grayson Path, City Manager SUBJECT: Event Center Donation of Building DATE: June 13, 2022 BACKGROUND: On July 22, 2019, the City and Supreme All, Inc., working through Ms. Samantha Hughes, entered into a lease agreement for the City's Event Center, located at 1875 Fitzhugh Avenue (northeast corner of the Fairgrounds). The terms of the lease are summarized as: 1. Rent: $1,200.00/month 2. Three years, August 1, 2019 — July 31, 2022 with auto renewal for two additional years unless notice is provided by either party by April 30, 2022. 3. Use and maintain for meal services and other related activities, including preparing, packaging, and serving food. 4. Tenant shall be responsible for maintenance of facility and parking area. The lease was attached to the previous agenda item for the City Council's information. The tenant's primary use of the building was its kitchen facility in order to prepare meals for the Boys and Girls Club. Each day of the work week, Supreme All, Inc. prepares a dinner meal for the youth who attend the Boys and Girls Club. Speaking with Jason Machice, Executive Director for the Boys and Girls Club, Supreme All, Inc. has provided a needed service that cannot be easily replaced. STATUS OF ISSUE: Supreme All, Inc. has requested that the City consider donating the facility to their non-profit corporation. They would like to utilize more of the building than just the kitchen area. Their wish is "...to provide youth development activities on the weekend and some weekdays. Such activities range from educational enrichment, career exploration and development and social and recreational opportunities." The following is a list of activities that Ms. Hughes provided to us in December 2021 when this was first proposed and which she hopes to initiate if she obtains ownership of the building: - "Women Empowerment Group - Safe Skating on some Saturdays - Mentorship programs - Career events, with nurses, chefs, business owners, and many others. - College days. - Summer time job fairs for the out of school children and anybody else. - Refocus program for the mothers in the community. - Senior citizens games and hot meals. - Many other things." Ms. Hughes was planning on providing us with an updated list of items and programs. We have not received that as of the date of this memo's preparation. Pursuant to Texas Local Government Code 253.011, the City may transfer property to a non-profit at no expense and without notices and bidding on the condition that the property be perpetually and primarily used for public purposes. If that is not followed, then the building reverts back to the City. This would remain with the deed forever. The alternative is to place this building out for bid and sell it. Supreme All, Inc. wishes to receive the building at no expense. The primary issue is determining if there is public purpose going in to the transaction and then being maintained throughout the life of the new ownership. Council would need to make factual findings that the uses to which Ms. Hughes intends to put the property are indeed public purposes. Supreme All, Inc. would need to pay for a survey in order to survey off the property for platting purposes. It is advisable that the City require the parking lot be included in this. This must be submitted through the City's Planning and Community Development Department like any other project. Ms. Hughes has stated that she is agreeable to pursuing this. Prior to initiating this venture though, we advised her to come before the City Council and see if there is indeed interest to proceed. If not, then the current lease would continue unchanged. If so, then she could proceed with the survey, platting and agreement. This would also require the termination of the lease agreement at that time. It is advisable that the City Council develop a good understanding as to the public purpose that will be pursued, perpetually, to be captured in the agreement. It need not be so specific that it prevents future public purposes, but there needs to be some reasonable assurance as to the long term public purpose and the means of achieving this. Ms. Hughes is scheduled to be present tonight to answer any questions you might have. BUDGET: If this were to be approved at a future council meeting, this would terminate the lease which equates to $14,400.00/year. Supreme All, Inc. would be responsible for all other expenses tied to this transaction other than City's review and administration tied to this effort. IMIONLIS No official action necessary other than to indicate one of the following: 1. Proceed with developing a deed (following completion of a survey and plat) to donate the building and parking lot areas to Supreme All, Inc., to be brought back to the City Council at a future date, to be determined. 2. Request additional information prior to giving an indication as how to proceed. 3. Propose modifying the lease instead of donating the building. 4. Do not donate the building. 5. Pursue issuing notice to seek bids for the building. RECOMMENDATION: Staff do not have a recommendation other than if option #1 is chosen, we prepare an appropriate deed covering the requirements of Texas LGC 253.011. An alternative is to pursue seeking bids for the building. This might be the cleanest transaction possible vs. a perpetual deed restriction. Of course, some person or entity other than Supreme All might have the high bid. To make this route possible, the City could conduct, at its own expense, a survey and plat, after which, notice could be issued to seek bids. This would be the City Manager's preferred route for long term settling of this matter vs. a perpetual deed restriction that 1) must be monitored and 2) places restrictions on Supreme All's ability to conduct business at the facility and would make it difficult for Supreme All to sell the facility should it ever cease operations or outgrow the building. However, we will pursue whichever route the City Council prefers.