Title
Ordinance - Second Reading of an Ordinance Vacating and Abandoning a Portion of Hospital Drive in the City of Mansfield, Tarrant County, Texas
Requested Action
Approval of ordinance.
Recommendation
Staff recommends that the council approve second reading of the Ordinance.
Description/History
At the last regular City Council meeting on Jan. 13, 2014, Council approved first reading of the Ordinance vacating and abandoning a portion of Hospital Drive with the understanding that there would be additional changes necessary on the second reading. The final version of the Ordinance, which includes the Deed Without Warranty has been revised as follows:
1. The date of the Third and Final Reading of the Ordinance has been revised to reflect passage at the Special Council meeting scheduled for January 28th.
2. Paragraph 5. has been added to the section titled Reservations from and Exceptions to Conveyance: of the Deed Without Warranty "other than temporary closures needed for construction purposes, Grantee covenants that it will not close the portion of Hospital Drive being conveyed to it for traffic flow from Miller Drive until after a point where there is ingress and egress to and from public parking located on either the North or South side of Hospital Drive as generally depicted in Exhibit C."
3. Additional language has been added to the section titled Additional Evidence of No Right of Reversion: of the Deed Without Warranty, "It is expressly agreed that if the Grantee desires to undertake any action that would trigger the Grantor's right of reversion provided hereinabove that arises from bond financing, Grantee shall have the right, but not the obligation, to provide the Grantor with sufficient funds required to redeem/pay off that portion of the bonds then outstanding that are allocable to the Property Conveyed and to pay any and all costs and expenses for partially redeeming/paying-off such bonds, and upon payment of such amount, the Grantor's right of reversion provided hereinabove that arises from bond financing shall cease.
Representatives of the Board of Directors of Methodist Mansfield Hospital have approached the City with a proposal to initiate a significant expansion to the existing Methodist Mansfield Hospital campus. The expansion will occur in several phases and will extend over several years. The first phase calls for the construction of a new patient bed tower providing in excess of one hundred additional patient beds and supporting services. The new patient tower will be located immediately west of the existing facility and will be constructed in a manner to present a comparable appearance to the existing hospital structure. During the same initial expansion phase, Pavilion Properties will construct a physician's office building immediately south of the proposed new patient tower wing. The professional office building will provide approximately seventy-five thousand square feet of leaseable space for use by physicians and associated professionals in the health care industry. It is expected that the construction of the new patient tower and the physician office building will generate a significant number of new jobs in the city and will serve as a catalyst to additional medical facility and service development in the immediate vicinity of the hospital.
1. Ordinance Closing Hospital Drive.
As part of the first phase of the facility expansion, the hospital has requested that the city close a portion of Hospital Drive which runs essentially east/west and lies south of the existing hospital facility. Hospital Drive in its current location would impede the ability of the hospital to construct certain facility improvements that are planned in the first phase expansion. It is proposed that the City would agree to close a portion of Hospital Drive, in its current location, and release the roadway easement to the hospital at the time that the new patient tower construction was complete. Under the terms of the Ordinance the City would retain the right to leave any existing public or private utilities in place after the roadway easement is abandoned. The City would have the right to maintain and repair existing utilities but would not be permitted to install new utilities in the abandoned right of way. If the City needs to relocate utilities, out of the current right of way because of Mansfield Methodist future development plans, the Hospital would pay for the relocation of the utilities including the cost of right of way acquisition. The existing road surface would remain in place and open for public use until the City issued a Certificate of Occupancy for the completion of new Patient Tower II. The Agreement provides that if the Hospital does not complete the construction of new Patient Tower II by April 30, 2016, the right of way will revert back to the City of Mansfield. The Ordinance and Deed Without Warranty being used to convey the street right of way to Mansfield Methodist Hospital also provides that if the Hospital or its successors attempts to use the property in any manner inconsistent with the tax exempt character of the debt that funded the construction of Hospital Drive while that debt is outstanding the property will revert to the City of Mansfield. This provision has been strongly recommended by the tax group within the Bracewell & Guliani firm that provides bond counsel to both the City of Mansfield and the Methodist Hospital system. It is the provision that will protect the City's bond debt from an adverse IRS ruling if a future complaint about use is made by any group or individual.
The exhibits for both the Ordinance and the Deed without warranty will be furnished prior to action on this item.
Justification
The City of Mansfield and the Methodist Mansfield Hospital believe this Ordinance is in the best interest of both entities.
Funding Source
General Fund
Prepared By
Allen Taylor, TOASE