Minutes - Council - 06/24/2008 - Laserfiche WebLink

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Mayor Gamec stated that this was a pretty distressed property and he thinks people knew that in order to get it cleaned up it would take extra funds. Councilmember Dehen stated that the City won't get an increase in tax base from this property, nor will any new jobs be created, because it is just for an outside storage space. He asked what would happen if the City said that it would sell the property for what it paid or just wait until someone else comes to buy the whole parcel. Mayor Gamec stated that the chances were, the City wouldn't be able to sell it. Economic Development Coordinator Sullivan stated that when there is an appraisal for purchase, it takes into consideration the highest and best use for valuation. He stated that, the City does not have an official appraisal, but a letter of opinion, that values it as industrial, not commercial, which, in the letter was between $3.00 and $3.25 per square foot. Councilmember Dehen asked if the property was industrial when the city purchased it. Economic Development Coordinator Sullivan stated that it was industrial when the City purchased it, but typically you see the price of the property as what someone is willing to pay. He stated that he has made it clear to Mr. Perkins that the Council would decide on the sale price for the land. Councilmember Dehen asked what the price difference would be if the City set the price at the higher end of the scale, at $3.25 per sq. ft., rather than the lower end. City Administrator Ulrich noted that this would be about a difference of $8,000. Councilmember Strommen stated that she has been involved in most of the EDA discussions about this property. She stated that this is an existing business that is in need of more space and if the City doesn't give them the space to grow, there is a risk that they will move out of the City. She stated that assuming that the City will get what it put into something is a mistake, because if that were the case, the transaction could have taken place on the private market. She stated that the City has interest in the long term upgrade of blighted properties. Councilmember Look stated that the City acquired this property through eminent domain and if it hadn't, KIH may still be in possession of the property. He stated that his problem is when the City pays a certain price and justifies it for business retention, which he feels benefits some businesses over others. He stated that the City paid $3.83 per sq. ft. and Mr. Perkins is offering $2.98 per sq. ft. Economic Development Coordinator Sullivan stated that staff is recommending the price be $3.00 per sq. ft. per the letter of opinion from the appraiser, but noted that the Council could go to the higher end of the range of $3 .25 per sq. ft. and he could support that. Councilmember Look asked if the company who gave the City the letter of opinion was the same one who did the original appraisal when the City purchased the property. City Council / June 24, 2008 Page 12 of 17