BOULDER — The Boulder City Council voted 8-0 Tuesday night to give city manager Jane Brautigam the authority to enter into final negotiations to buy the 8.8-acre Boulder Community Health campus on Broadway in west Boulder for $40 million.
Boulder Community Health has agreed in principle to sell its Broadway campus to the city of Boulder for that price, and the hospital’s board of directors is expected to vote Wednesday on the deal. The Boulder County assessor values the property at $56.3 million.
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“We’ll never have another opportunity like this,” said mayor Matt Appelbaum, referring to acquiring a nearly 9-acre plot of land in a key area of the city. “We will have broad community conversations to determine specifics of how the site will be used, hopefully to create something that will be around for 100 years.”
The deal includes all properties of the Broadway campus, which consists of 8.8 acres of land and more than 355,000 square feet of existing building space. It includes the hospital and associated grounds at 1100 Balsam; The Medical Pavilion at 1155 Alpine St.; The parking garage at 2655 Broadway; The Brenton Building at 1136 Alpine St.; The parking lot at 1125 North St.; and the parking lot at 1135 North St.
The city’s interest the property is twofold. First is for the site to be developed within the city’s goals and visions, preserving the neighborhood and managing carefully the growth associated with the property. Second, the city leases space spread throughout the city for its employees. With the New Britain and Park Central buildings identified for removal in the Civic Area Master Plan due to flood hazards, the BCH Broadway campus provides an opportunity to include a government office to consolidate several city offices.
If the hospital board approves the sale, the city will be required to make an initial earnest money deposit of $3 million Wednesday. The deposit would be applied toward the $40 million purchase price and would be paid from the city’s general fund.
The city intends to use certificates of participation to finance the purchase; it would be repaid most likely over a period of 30 years. The payments are estimated to be about $3 million per year, according to Bob Eichem, the city’s finance director.
Eichem is recommending the city use taxable certificates of participation that come with a higher interest rate of about 5.5 percent, rather than nontaxable certificates that carry a lower interest rate because the former provides more flexibility to engage in public-private partnerships. They also would not create problems with the Internal Revenue Service if private or nonprofit partners join the city in repurposing the site.
A certificate of participation is an alternative to a government or municipal bond in which an investor buys a share in the improvements or infrastructure the government entity intends to fund.
According to the terms of the sales agreement, BCH will continue to occupy the Broadway campus and provide health-care services there through the end of 2017 as it continues to move operations to its new Foothills campus on the east side of the city.
All council members thanked the hospital for understanding the city wants to be able to control how the site will be redeveloped to co-exist with nearby residential neighborhoods and businesses. Members also thanked the city staff for so quickly working through the process after the council in June directed them to proceed.
Councilman George Karakehian was absent, but conveyed his support of the purchase through councilman Sam Weaver.