06-24-1998 Council Agenda - Laserfiche WebLink

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5-18 -1998 3.57PM FROM SWEENEY LAW FIRM 2235289 P. 8 The estimate of value, as stated in this report, is predicated upon the definition of market value contained herein. Implicit in the definition of market value is that payment is made in cash or its equivalent. The equivalent of cash is conventional financing at bank /institutional rates. The subject property is appraised based upon cash or cash equivalent financing. A portion of the subject property was improved with a gasoline service station prior to a few years ago. The service station together with underground tanks has since been removed. A "Petroleum Hydrocarbon Release Remedial Investigation and Corrective Action Design Report" was prepared by Dahl and Associates, noted the presence of soil contamination. Part of this was corrected with the removal of the tanks. However, the Dahl report indicated additional clean up required. The Corrective Action Design (CAD) recommended use of a soil vapor . ventilation system. Although this action was never taken, the Minnesota Pollution Control Agency issued a letter in February 14, 1995 which stated the " ... Minnesota Pollution Control Agency (MPCA) Tanks and Spills Section (T &S) has determined that your investigation and /or cleanup has adequately addressed the petroleum tank release at the site listed above, Based on the information provided, the T &S staff has closed the release site file. ". The letter reserves to MPCA the right to reopen the file and to require additional investigation and /or cleanup work if new information or changing regulatory requirements make additional work necessary. A Phase 1 Environmental Site Assessment was prepared by R13 /SPEC, Inc., dated April 10, 1998. They indicate that, based upon assessments by others, there is approximately 15,000 cubic yards of contaminated material still on site. The cost to remove the contaminated soil (excavate and landfill) was estimated by them at $200,000. This does not include replacing the contaminated material with 'Luiyam.tud fill, which would increase the cost to $213,uuu. A soil vent system could be used at a lessor base cost, however, that would eliminate the marketability of the site during the operation of the system, which could be 3 or more years, thus having a greater negative impact on the property. Of the two options the excavate /disposal was considered the most economical. In analyzing the property consideration was given to the impact of soil contamination on site. This considered how buyers would react to the situation taking into account the influences of the "Petrofund ", In analyzing the subject property, an analysis was made of the property as though free and clear of environmental hazards. From that value, the impact of soil contamination was analyzed and deducted to arrive at " as is" value for the property. The property rights appraised reflect fee simple title. There aro two tenants currently in the property. One tenant, a barber shop, has no formal lease agreement reflecting a month -to -month status. The second tenant is a shoe repair facility who is in the third year of a five year lease. The lease contains a 90 day cancellation clause. Recognizing the foregoing, it was concluded that no leasehold interest exists with the value reflecting fee simple estate. The estimates of value reflects any outstanding real estate tax, special assessments or other such encumbrances, if any, as paid in titll. BETTENDORF ROHRER KNOCHE WALL, INC. PAGE 2 Page 134