reunion arena land swap

7/30/2019 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.

Sustainable Development and Construction 2


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Land Use Map 1960


Background


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Background


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

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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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

reunion arena land swap

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