 He does start the new year off right. Okay, we'll deal with that. Good afternoon. We'd like to call the Durham City Council meeting toward at 7.01 p.m. on Tuesday, January 3rd. And certainly want to welcome all of you that are here with us this evening and certainly wish everyone a happy new year and hopefully a good year for 2017. We could just take a moment for solid meditation, please. Thank you. I'd ask Councilman Davis if he would lead us in the pledge. This is Swarov. Madam Clerk, would you lead us in the role, please? Mayor Bell. Mayor Bell. Present. Mayor Pro Tem Cole McFadden. Present. Councilmember Davis. Present. Councilmember Johnson. Present. Councilmember Moffitt. Present. Councilmember Reese. Present. Councilmember Shul. We have one proclamation that we'd like to present this evening. I would ask the early sounds, Bell and Sheryl Thomas and Sheryl and Reese and everyone else if you would join me, please. This is a resolution that speaks to the issue of human trafficking and declares human trafficking awareness month. And it speaks to the fact that whereas the community, we care about the dignity, security, physical and emotional well-being of all of our neighbors and we recognize the right of all individuals who live their best lives and safety and freedom. It speaks to the fact that whereas human trafficking is defined by the United Nations, as recruitment, transportation, transfer, harboring or receipt of persons by improper means such as force, abduction, fraud or curation for improper purpose including forced labor or sexual exploitation. Whereas anyone can be a victim of human trafficking, regardless of gender, age, race, socioeconomic status, nationality or immigration status. According to the United States State Department, particularly vulnerable populations in the United States include children in the child welfare and juvenile justice system, runaway and homeless youth, persons with limited English proficiency, persons with disabilities and LGBTI individuals among others. Whereas we recognize that the form of human trafficking has consequences for victims, families and society and can lead to long-term health problems, psychological distress, instability and homelessness and increased risk for future violence. Whereas Durham Crisis Response Center, transforming hope, ministries, justice and values and Salvation Army are partnering with local, state and federal law enforcement and criminal justice agencies to identify and meet the needs of human trafficking survivors and end this modern slavery in our community. Whereas we must increase awareness and action to effect change and then trafficking begins by reducing vulnerabilities and increasing opportunities for those at risk, including jobs, education and housing, promoting healthy, respectful and nonviolent relationships and building a caring, inclusive and connected community, we are strongly committed to empowering victims through collaboration among organizations and systems that confront this crisis. Whereas local government, health professionals, law enforcement, faith communities, educators and civic organizations to work together to learn more to identify and serve victims of human trafficking and to speak out about this issue so that all may live in freedom and safety. And now therefore I will rebuild the Elmira City of Durham, North Carolina to help our reclaim January 2017 as Human Trafficking Awareness Month in Durham and hereby urge all citizens to observe this month by increasing awareness of human trafficking, taking action to change the culture and working together to end the violence. What's my Hand Corp. City of Durham? This is the 3rd of January, 1917. I'm going to present this to Aurelia and then I'm sure she will introduce the others that are with us. Good evening. Thank you, Mayor Bell. Good evening, Council. My name is Charlene Riess and I am working with the Durham Crisis Response Center to develop trafficking services for human trafficking victims in Durham and I am joined by Aurelia Sands-Bell, who is our Executive Director, Cheryl Thomas, who is our Outreach Coordinator and Abby Tonalia, who is the Founder and Executive Director of Transforming Hope Ministries, which is another organization in Durham working to fight human trafficking. And we just, on behalf of all of us, I want to say thank you for taking the opportunity tonight to declare January as Human Trafficking Awareness Month. It's been a long time coming for this important issue that is important in Durham, in North Carolina, and the U.S. Many organizations have been working a long time to get here where we can speak about it publicly and people are listening. We have a lot of partners in the community, in the city, in the county. We appreciate the work of the Youth Relationship Violence Task Force that has many multidisciplinary agencies in it, as well as the Child Sexual Exploitation Protocol Task Force and Social Services, the Police Department, and then our other partners. And we ask that you all continue to do the good work that you do in Durham to find ways to create affordable housing and reduce the vulnerabilities of our citizens and our youth so that they do not end up in trafficking. Thank you. Okay, I would ask other comments by members of the council. If there are any. Okay, doc. Recognize the count? Well, I'll be bold enough. I have no singing voice, but on a unique occasion like this, I will blaze the way, if you all would join me, the mayor. Happy birthday. Happy birthday to you. Stevie Wonder version. It was clear that the better singing was coming from that side. I know, I know, I know. I appreciate it. And I was telling Eddie that we're fortunate to be on this council and have birthdays and have Councilor Davis as a part of this because he always finds a way to make very special, very, very kind and grateful words. And for that I'm very appreciative. Having said that, let's move on to any other announcements. If not, recognize the city manager for his program. Thank you, Mr. Mayor. Members of the council, good evening and happy new year to everyone. No priority items. The city attorney. Thank you, Mr. Mayor. Members of council on agenda item number one, municipal election process. The date of the proposed public hearing is January 17, 2017, not January 16th, which is what was in the memo. And that change didn't get made from the work session, but that is the Tuesday. The motion of the city attorney's priority items. It's been proper to move the second. Madam clerk, we open. Close the vote. It passes seven to zero. Likewise, the city clerk. Any priority items? No items, Mr. Mayor. In that case, we'll proceed with agenda. Consent agenda items may be approved with a single motion. If a council member of public removes an item, we'll discuss that later in the agenda. And I'll read the heading of each one of the consent agenda items. Item one is the municipal election process. Item three is the contract amendment with SunTrust Mortgage Inc. Item four is the final approval of home, community, housing, development, organizational funds to the Durham Community Land Trustees Inc. For the construction of an affordable rental housing unit located at 1207 Kent Street. Item five is parking, pay-by-phone, mobile payment services contract. Item six is construction contract award to C.T. Wilson, construction company Inc. The downtown parking garages, elevated modernization project. Item seven is interlocal agreement between the cities of Durham and Raleigh, the towns of Cary and Wake Forest, Wake County and GoTriangle for administrative distribution of the Wake County, $7 vehicle registration tax. Item eight is Eno economic development zone of Orange County amendment number two to interlocal agreement between Orange County and the city of Durham. Item nine is a bid report for November 2016. Item 10 is proposed acquisition of approximately 50.173 acres for future park project located at 632 North Hoover Road and 621 Cheek Road. Item 11 is Duke University Health Systems Office of Community and Local Government Relations City of Durham FY 2016-2017 grant. Item 12 is the City of Durham training to work grant project ordinance. Item 19 is an item that can be found on the general business agenda. I entertain a motion for the approval of the consent agenda. So moved. Second. It's been a proper move. Second. Madam Clerk, will you open the vote? It passes seven and zero. Moving to the general business agenda. Item 19, proposed acquisition of approximately 2.19 acres for future fire station. 18 located 6911, 6919 Herndon Road. Mr. Mayor, members of council, at the work session you had asked me to provide you with some information regarding a potential involuntary taking of that property if need be based on some of the concerns that you've raised about the price. I did provide a memo to you all late this morning that I hope you all have seen. I'm happy to answer any questions about that if you have concerns about the purchase price and want to explore a potential alternative mechanism for acquiring the property. You've heard the city attorney's comments, recognized first councilman Moffitt, do you have a hand? Thank you. I just want to take a moment. I have learned that I was a little intemperate in my language that I used at the work session. I should have said I want to apologize to the sellers for my characterization of the deal. And I just simply want to say that after reviewing it carefully, I had come to the conclusion that I still hold that the contract price was higher than the actual value. And I think it merits our careful consideration. Thank you. Are there other comments, questions about the item? Recognize, is that councilman Moffitt again? Yes, that was me again. Since I put this item, I've raised the issue. I wanted to at least try to explain how I got to my conclusion. And I've got, I prepared a very simple little set of examples. I think there's enough there. I've learned that the seller has some prior experience with selling lots in the area that they sold seven lots for $782,250. And so the very first little section says if you took that, you come up with a value per lot. And if you look at this as five lots that we're buying, it's a value of $558,750. That to me is close enough to the appraised value of $600,000 that it's not, I would not argue with the appraised value. And in fact, I have not ever argued with the appraised value. What I have argued with are the adjustments to the appraised value. And so I'm starting by saying, I'll give you an example. So the value to the seller, what the seller said regarding a methodology is that they would need to receive the price for the property less any incidental developmental savings from the change in use. And then on top of that, they would need to receive anything that they had to spend because of the change in use. I'm paraphrasing. So the value to the market, these are examples because I don't know the actual numbers. But if they, they have to do water, sewer, storm water, roads, curb and gut or impact fees. If those added up to $100,000, if the appraised value is $600,000, by the time that they had made the improvements and sold the lots, they would net $500,000. Which is in keeping with the methodology that the seller has put forth. So if you, that's the second section in what I handed out. The third section says if you start with that net value and you add back to it as compensation to the them, any improvements they've already done because we backed those out to get to the net value. So if they've already graded it, if they've already put in roads and curb and gutter, well that's a sunk cost to them and they would need to recover that. And then if they do have a cost for changing the use, for example if they had a contract that they had to break and it cost them $25,000, I'm just using it as an example, you'd add that back in too and then you come up with a fair purchase price. What we know is the appraised value is $600,000. We know that they do, there was a memo from our storm water department that was on our agenda and it includes that knowledge that they are going to need sand filters for storm water on the road that they have to build and dry ponds for the lots. So there is an expense there as well as the other things. What we don't know is any improvements they already have in place, what the value of those improvements are or any cost the seller might have to us. So the question is, the contract we have in front of us tonight is $700,000. And the question is, and maybe staff can provide us with some information on the improvements that have been made to date. Any penalties that the seller may incur by selling to us and so forth. Good evening, David Fleischer, General Services Department. The seller is being forced in this case to forego building houses, which is the business that they are in and profiting there from. I think in the best of all possible worlds the seller would move forward, would choose to move forward with the deal that they had that is to build houses on this property and make a profit were it not for the city's desire to acquire this property from them. So what we were told in the work session is that they had a deal in place to sell the property to a builder, which is different than what you just described. What you just described is that the seller is planning to build houses on it. So if the seller is planning to build houses then there's an opportunity cost that they have to forego. But if they plan to sell these lots because they did the other seven lots in the area, then their total value that they're going to receive from it is when they sell the lots. The builder will then have the opportunity cost, the opportunity, the value add from building a house on it. So I'm a little confused, maybe you can clear that up for me, whether this seller is building houses or selling lots. Thank you. This seller has conveyed a great deal of their existing parcel there to a builder to build houses. What they were retaining for themselves was five lots where we are building a fire station so that they could build houses themselves there. And they are unable to do so and part of their deal to convey most of their property to the home builder included the reservation for them to be able to do a property exchange, a property swap with that builder and take back some of the property they conveyed to them so they could sell that property to us and so that builder could comply with open space requirements and I appreciate this is confusing. So that the builder could comply with open space requirements by moving part of that open space onto some of the five lots that they were proposing to build houses on. I hope that answers the question. Not precisely. Did you tell us at the work session that they had a contract that we needed to close on this by the fourth that we would lose the opportunity? They do have a contract that they conveyed the lion's share of their property to a builder on November 2nd. That contract has a hundred and fifty day clause in it to do the property exchange that would enable the seller to convey property to us. Sixty days have passed of that and if we receive city council authority to purchase this property we will have 90 days per hour contract to close and thereby get in before the termination or expiration of a hundred and fifty day period. The 90 days to close is something that we put into the contract? It is. It's a fairly standard conveyance for the city of Durham to be able to close within 90 days subsequent city council approval. Could it be 80 days? Could it be 80 days? Right. It could. So the January 4th date that we were given is actually not fixed in stone. It is fixed in stone on the agreement that we made with the seller. That the seller's option to the city to purchase the property expires on January 4th. That was an extension from the prior date of December 20th. When you all had the property appraised, did the appraiser, all of this was made known to the appraiser? Is that correct? That is correct. The future use of the property, highest and best use? That is correct. The appraiser provided two reports, one that valued the raw land of 2.19 acres and another that valued the sale ability of five lots in that neighborhood. And that was the one that came to $600,000. Correct. Right. And then have you provided to council, we've been talking about this now for several weeks. So the news that the seller is building lots, not selling lot, building homes not selling lots has taken me a little bit by surprise. Have you provided council with an analysis of the lost profit that you're using, what I understand you to say now is that the appraised value of the lots is $600,000 and that general services has added another $100,000 to the selling cost, to the purchase price in order to compensate the seller for a lost profit, the opportunity cost? I don't know that it's tit for tat. I believe in our original memo it spoke to the potential profit of how much of a house being in the 18 to 20% range of the sale price of homes that would be built and that was figured into it. More so than that being the differential between the $600,000 appraised value and the $700,000 purchase price, more so than that was the seller's negotiated price based on us asking them to change their plans. They've been held up or they've been working with us in good faith for the past 13 months as we've worked toward this and they've changed their plans. They've gone through expenses with land planners, with survey and they will continue to incur those costs as they move toward resubdividing the property so that they can sell 2.19 acres to the city. Okay. The question I asked originally just so that I know the answer to that. What improvements have they put in place there? The sellers have graded the lot. They have removed the existing structures and before conveyance to the city, they will deliver sewer to the rear of that lot so that we will have something to connect to. Okay. So to date they've graded and in the process of grading they've removed the structures. That is correct. Okay. All right. Thank you. So I don't know exactly where to take it from here. The news that the seller intends to build on it, as I said, has taken me by surprise. I think I would love to hear from everybody else and see where we want to go with this. Recognize Councilman Shul? Mayor Pro Tem? Is there anyone else that got Councilman Shul? Mayor Pro Tem? Councilwoman Johnson? Thank you, Mr. Mayor. I appreciate Don raising this. It's been valuable and I've been really interesting to delve into this and try to figure this out. And I really think it's been, you know, what good city council work is. But I feel like now at this point, once I've heard David's explanation, I am very concerned about the administration's recommendation, because now my understanding is that there are five lots that the, these five lots were not just to be sold to a developer with no upside, but were actually to be developed by the current owner. And so the owner is there by a foregold. And so I think, once I've heard David's explanation, I am ready to go forward in the future. And so the owner is there by a foregoing some upside, which I think would then make this a very reasonable price, given the appraisal of the other five lots and the comparative sales price, which Don has listed on his sheet here. So I'm satisfied with the administration's recommendation. I appreciate Don's work on it and think that we've probably got the right price. Thank you. I was merely going to recommend that we go with the administration's recommendation, because I don't know of another viable alternative at this point, unless the administration can share a viable alternative other than imminent domain. And I don't think that's viable. Mayor Pratim, I think, you know, two issues. One, viable alternative to negotiate a different price on this piece of property. If I'm correct, David, that's probably not a viable option based on the seller's communication to you. I spoke with David Fleischer, again, General Services Department. I did speak with the seller today and attempted to renegotiate the deal or inquire if they were willing to have some latitude in their purchase price, and they were not. Thank you. And then the other viable option is to look for another piece of property. And I think as you've indicated previously, and you may want to repeat that again for the record, that's pretty difficult. And in fact, we may in fact be willing to pay a higher price if something was available for this piece of property, because it's a better suited location for the fire station to be located. That is correct, Mr. Manager. We searched the target area as identified by the fire department, and there were no other properties that were accessible for purchase. And furthermore, this property in particular is at the epicenter of their target range, target area. I can ask Councilman Johnson and then Councilman Moffitt. Councilman Johnson. Thank you, Mr. Mayor. I just had a couple of questions that from information that's in the first memo that we got from you all. That's item number six in our agenda documents. So the city is buying two and a half buildable lots, but are impacting the other two and a half lots because of open space requirements. Could you explain a little bit more about that? So like if we're only buying the two and a half lots, what happens to the other two and a half lots? Thank you. Two and a half lots is primarily what comprises the two and a half, the 2.19 acres that we're purchasing. However, there is some property behind that, those two, behind that 2.19 acres that was part of the open space as required to meet impervious surface for the development as a whole. As part of that property is conveyed to the city, that developer, that being the home builder that purchased the lion's share of this property, is required to move their open space elsewhere and they will be moving it to the other two and a half lots just north of our property on Herndon Road, and that's where the open space will be located for this development. I think I'm still a little confused, so we are paying for five lots, but we're only getting two and a half. We're getting two and a half lots plus the land behind it that had not originally been planted as being saleable lots. Rather, it was planted as open space for the development, and now that open space is being relocated to accommodate us getting a square lot. So the city will own that land? That is correct. We're going to own the whole 2.19 acres. Excuse me, Councilman Johnson, but I think maybe I misunderstood what I said. We will not own the two and a half lots north of our property, but rather we will own two and a half lots along Herndon Road and the property behind it that coincides with our property. I hope that clarifies it. So we're only going to own two and a half lots? These lots are a size that approximately, I'm hoping to make this easier, these two and a half lots come from what is fronting Herndon Road. We are buying two and a half lots worth of width along Herndon Road and the corresponding amount of property behind it. Total 2.19 acres. Okay. Okay, thank you. My other question was on the property behind it. I don't know if it's appropriate. Thank you. My other question was on page two. One of the questions from council was whether we had discussed with the family buying three acres for 500,000 and that their response was that the property had been placed in conservancy so that it could not be subdivided sold or developed. Is that a different property that the Herndon family has placed all of their property that's remaining in conservancy and is not open to sale or breaking of that trust? Great, thank you. So this property here is the only property that's available for us. That is correct. Thank you. Thank you. Let me recognize Councilor Moffitt who else wants to speak that I'll finish out the question. I just want to be clear just so we know when we vote like what we're doing. So the five lots to reach their appraised value of $600,000 need to be improved and buildable. Is that correct? That is correct. And part of that improvement and buildability includes grading, includes sewer. That is correct. So to get to the $600,000 that they have they also would have to do on top of that water, storm water, the road that they're showing on the plan that you provided, curb and gutter, sand filters and impact fees. Is that right? It's partially correct. I spoke with the seller about that today and they depicted the road going there, not with curb and gutter but essentially a glorified driveway going from the other part of the development where the home builders buying to these five lots. It would not be a city street, it would not have curb and gutter and be so improved. Furthermore the developer phrased it to me that they still are building sewer across the creek from the main part of the development to the area of these five lots. However it's being slightly shortened that they're not delivering exactly to five lots and the value of servicing each of those five lots would be nominal. He threw out a number of approximately $1,000 per lot that he's saving. Yes, yes but to get to the $600,000 they would have to install the sewer line. The in order, the appraiser said they should be able to sell the five lots for $600,000. In order to do that they would have to install I think it's a 585 foot long sewer line, is that correct? The same sewer line roughly. They are installing that same sewer line for us, albeit slightly shorter. Alright, so I just want to say that we start with $600,000. You deduct off the money that they would not spend if they were selling to us for water stormwater and impact fees. So from that value, whatever that dollar figure is to $700,000 is the premium that we're paying. So it's not some number that $600,000 plus a sewer line, it's $600,000 minus those other improvements. To get to $700,000 is the premium. So I just want to make sure everybody understands the premium, we're not paying for the sewer line but we're paying for things that they're not delivering. That's all I have to say. Recognize Councilman Schuhl. Thanks Mr. Mayor. Councilwoman Johnson's question reminded me of some comments that I wanted to make relative to the Herndon family's land which I just wanted to say that in case members of the public don't realize that the Herndon family has made a really strong commitment to keep their family's land as green agricultural space in the midst of all the development down in South Durham in the South Point area and this is really a gift to all of us that's made by the Herndon family which is foregoing the potentially enormous profits on the sale of their very prime land and I just wanted to appreciate that as part of this discussion because it is really a very very unusual thing that they're doing and a real gift to our whole community so thank you. I want to ask one question and I'm very familiar with the area I live less than a mile from the site that we're talking about and I should have asked this a long time ago. Is the fire chief here? He's not. Okay. Tell me why this is an epicenter. Both Ferguson deputy city manager for operations so in my discussions with the fire chief his staff has a fairly robust planning operation based on calls for service reviews with the land use plans for the area and all of those sort of go into a formula we have a software package actually that determines calls for service and radiuses around certain points this is considered the epicenter because that's what all of that analysis kicked out for us this is the optimal location in terms of shortening the calls for service to the intended service area for fire station 18. This is not very far from the parkway fire station. That's correct. The major concern about the parkwood location is the access roads into and out of that center of the parkwood neighborhood. This location provides access to much more high capacity roads which gives the fire apparatus and the responding crews the ability to get to more of the area in a timely or fashion getting into and out of the parkwood station is problematic in terms of the road network that serves the parkwood station. I wouldn't buy that I mean but it is what it is so how would the station work in conjunction with the parkwood fire station? As you may be aware and I know has been discussed somewhat publicly we have had discussions with the county fire department which now operates what used to be parkwood volunteer fire department in Bethesda we're in an analysis period looking at the possibility of some sort of cooperation up to the possibility of merging those. Our understanding would be that if that were to go forward the city and county would cooperate on the development of fire station 18 and the parkwood location would go out of service. The county agrees that the location for parkwood is not optimal for serving that area and given the growth patterns in south Durham. That makes more sense to me. If in fact you want to build this fire station where it's proposed and they have the parkwood fire station which to me is 5, 10 minutes away I know 5, 10 minutes to be a long distance when you're trying to fight a fire but it makes more sense to have this fire station serve the area than the parkwood it does make sense to me to have the parkwood fire station that they are. I should have asked this question. I should have led with that. In our discussions with the county we have all presumed based on comments that they've made that the parkwood station is not in their long term plans or ours and I think we are certainly hopeful for the benefit of city and county residents that we can cooperate with the county to have one station that serves both needs. Thank you. Is anyone else before I recognize the mayor? I'm sorry. I would like to move that we accept the item as outlined. It's been properly moved. A second. Further questions? Madam clerk, will you open the vote? Close the vote. It passes 6 to 1. Council member Moffitt voting no. Thank you. Are there other items that need to be moved? If not, we are adjourned at 7 41 p.m. Thank you. Thank you.