It is recommended that the City Council authorize execution of a ground lease with Catalyst Urban Development, LLC, or an affiliate for approximately 3.69 acres (161,007 square feet) of city-owned property on the block bounded by Lancaster Avenue, Cherry Street, Texas Street and Lamar Street with an option to purchase subject to the terms and conditions of the ground lease, in exchange for a parking easement for 185 parking spaces in a to-be-constructed parking garage on the property.

On October 28, 2014, the City of Fort Worth (City) entered into a Memorandum of Understanding (MOU) with Catalyst Urban Development, LLC, for the master planning and development of the Lancaster Avenue corridor in downtown and to initiate execution of a development strategy for property along Lancaster Avenue.  This includes former right of way which came into the City's possession through the reconfiguration of I-30.  The initial implementation of the development strategy outlined in the MOU was to begin with a Phase One project located on the block bounded by Lancaster Avenue, Cherry Street, Texas Street and Lamar Street (Project Site).

On July 1, 2015, (Res. 8-2015-2 as amended on November 2, 2016 by Res. 8-2017-2), the Board of Tax Increment Reinvestment Zone Number Eight (TIF) authorized execution of a TIF Economic Development Program Agreement with Catalyst Urban Development, LLC, (Developer) for the construction of a $38 million, 254-unit multi-family, 6,000 square foot retail and 601 space garage development (Project) located on the Project Site.  The Project Site consists of both publicly and privately owned property and includes approximately 3.69 acres or 161,007 square feet of land owned by the City, with two vacant structures totaling approximately 32,249 square feet (City Property).  An exhibit of the City Property is attached to this M&C.

The Developer proposes that the City enter into a Ground Lease Agreement with the Developer that will, upon completion of the Project and satisfaction of other Developer commitments, permit the conveyance of the City Property to the Developer in exchange for a permanent 185 space parking easement within the constructed parking garage (authorized under Texas Local Government Code 272.001 (b)(6)).  The City Property has been appraised at $4,830,000.00 and the total cost of development and maintenance expenses of the parking easement is estimated to be approximately $4,947,498.00.  The conveyance of the property will be subject to the public notice requirement in Chapter XXI, Section Five of The Charter of the City of Fort Worth.

Staff recommends authorizing the City to enter into the Ground Lease Agreement with Option to Purchase, thereby authorizing conveyance of the City property in exchange for the parking easement.

This project is located in COUNCIL DISTRICT 9.