07-11-2001 Council Agenda - Laserfiche WebLink

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MAYOR Michael L Fahey COUNCIL Beverly Scalze Jim LaValle Matt Anderson Rick Montour 515 Little Canada Road, Little Canada, MN 55117-1600 ADMINISTRATOR (651) 766 -4029 / FAX: (651) 766 -4048 Joel R. Hanson Email: cityhall @ci.little- canada.mn.us MEMORANDUM TO: Mayor Fahey & Members of the City Council FROM: Joel Hanson, City Administrator DATE: July 6, 2001 RE: Acquisition of Public Works Garage Site Staff has been working with Mr. Jeffrey Kogle, broker for the Hubbarb property located on County Road B. (See section map attached) The site is 2.68 useable acres with uneven terrain. It also includes a long access area (approximately .6 acres in size). The asking price is $225,000 which translates to $1.93 per square foot ($2.48 per square foot if you deduct the access portion of the property). A small income stream would also be gained with this acquisition due to the lease for the sign that would be assumed with the acquisition of this property. While I don't know the exact amount, I believe it is nominal. The other benefit we would gain is the ability to not renew this lease at its expiration thereby eliminating a sign that has been a previous concern of the Council. (I believe this lease has many years to run so that benefit would be of a long -term nature.) I have not yet received a copy of this document. Typically, I would recommend we obtain an appraisal to document a purchase price. However, based on other land transactions, $1.98 per square foot is a competitive price, although I do not know how an appraiser would evaluate the access area and its impact on property value. (I also explored the possibility of providing the owner with a Section 1033 letter to obtain a lower purchase price. That concept did not interest him.) An appraisal would likely cost about $2,500. I am aware that other users have been looking at this site. While their viability may be questionable, I do not want to miss the opportunity to purchase this site at what appears to be a reasonable price. I also believe the only benefit to doing an appraisal is to establish the fairness of the price from our standpoint as I do not believe the owner will lower his price as a result. Therefore, I recommend we authorize the staff and the City Attorney to prepare a purchase agreement for this site at the owner's asking price, subject to appropriate language for environmental review, title verification, and soils analysis for building suitability. I would also recommend we authorize the Mayor and myself to execute this agreement on behalf of the City. Page 54