Agenda - Economic Development Authority - 09/04/2008

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Case # 4 Consider Acquisition of Water Tower Parcel By: Sean Sullivan, Economic Development Coordinator Background: City Council authorized the award of contract for engineering services, and the undertaking of a feasibility study for the construction of a water tower in Elmcrest Park on April 22, 2008. During the site investigation it was found that the soils. in the proposed location of the tower were unsuitable for standard construction practices. The cost to construct the tower in the proposed location has increased by approximately $400,000 for the installation of piles to support the structure and carry the load to the underlying suitable soils. Staff worked with our geotechnical consultant on three alternative locations in the area that may be more suitable to reduce the additional cost of pilings. Of the three locations explored only one came back with favorable restilts, 16600 St. Francis Boulevard. In addition to having better soils this site is also approximately 10' higher than the previously proposed location within the park. Therefore, it would not only reduce the cost for the foundation system, but the additional elevation would also reduce the overall.cost of the tower construction. The initial indication is that for every foot of elevation gained there is a $10,000 savings, resulting in another savings of approximately $100,000. This parcel is owned by Oakwood Land Development and it currently sits vacant, aside from some minor storage in the outbuilding, and John Peterson has stated that he is open to the City acquiring all of the property. He currently has a mortgage on the land so any discussions would also have to be approved by the mortgage holder. The EDA agrees that the construction of a water tower in this area is important. The EDA discussed acquiring the 14.2 acre parcel, and possibly more, as part of a larger project for the 167~Commercial node. The EDA is currently waiting for the results of the Buxton Study to make a determination on whether or not there is a market that needs to be expanded in that area. Staffwas directed to obtain an appraisal of the property owned by Oakwood Land development south of 167th Avenue at the July 10 EDA meeting. The land consists of 3 parcels and the appraised values and scenarios are listed below: .. . 1) 16600 St Francis Blvd (14.2 Acres) - W/Sewer $915,000 - W/O Sewer $683,741-$863,208 2) 16601 Quicksilver St (26.4 Acres) - W/Sewer $1,128,000 - W/O Sewer $900,785-$1,077,113 3) 16651 Quicksilver ~t (3.1 Acres) - W/Sewer $368,000 - W/O Sewer $328,000-$359,000 Total acquisition cost for the entire 43.7 acres of the property with Sewer is $2,411,000. The range in cost if sewer is not provided is $1,913,311-$2,299,316. A copy of the full appraisal can be requested for review. The value breakdowns are based on Sewer being there now versus it coming at a later date. For the two properties on Quicksilver Streetthere are separate appraisals for the houses that are included in the total acquisition cost. In the appraisal it is assumed that in all cases the Sewer will be there at some point. The balance of the EDA budget at the end of 2008 is estimated to be $1,182,297, so there are significant funds available for the purchase of this parcel. However, it is important to note that the EDA has expressed the need for the purchase of future industrial land, so utilizing the EDA budget in its entirety might not be prudent. Perhaps a partnership with the BRA or a reduction in the land purchased could be a mutually beneficial solution to all parties involved. 25