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Mr. Mukooney gave the members his opinion of the cost of the land relative to the market for industrial land without sewer and water. In his opinion, $11,000 per acre was more than adequate considering that municipal sewer and water would need to be installed. In addition, he believes that the City can be very successful in marketing this property as industrial land due to its location near the railroad track, the location of County roads, the scarcity of remaining industrial land in the northern suburbs, and the strong market. Mr. Wagner asked if a formal market analysis or appraisal has been done on the property. Mr. Norman responded that it had not been done. And Mr. Wagner asked what the condemnation process consisted of. Mr. Norman explained that the court would order three appraisals, the City would hire an independent appraisal, the owner would hire an independent appraisal and the court would have a third appraisal performed. The judge would make the final decision on the price paid for the land. Mr. Norman speculated that $15,000 is most likely the absolute highest price at which this land would be valued. Mr. Wagner asked if we needed a public purpose or cause to enter into condemnation proceedings. Mr. Norman stated that it was similar to other condemnation procedures that shows there is a public purpose, such as the senior citizen apartment project, and the wetland which has industrial zoning near Vision Ease and AEC Energy Park. The purpose would be economic development, job creation, quality development, etc. Mr. Wagner stated that it was his opinion that it seems very early in the negotiation process to begin condemnation proceedings. He also said that it seems that the owners have a better negotiation stance. Mr. Norman stated that he did not feel that was true. The owners have been marketing the property for $1,500,000 for several years and it is still not sold. After they saw the Comprehensive Plan and realized that the City was interested in purchasing the land, they raised the price. What the owners don't seem to account for is that the City controls the extension of services into that land, and the land value would not significantly increase until after the extension of services and after some quality projects were built, and the interest paid on the land in the meanwhile. They are asking $3,000,000 for land that may be worth that after some years and much development, but as a vacant parcel, it is not worth that much now. The City has taken a role in quality development only since 1993 or 1995. Also, entering the condemnation process does not preclude negotiations for a better settlement, but it seems the logical next step because the asking price is much to high and they are not willing to budge from that stance. "They" being BMA Associates. Jim Norman continued in his explanation of the process stating that both parties must take the courts decision regarding the price. The owners can appeal the decision if they are not happy with the number decided upon by the court. At that point, the City has right-of-entry after the hearing. If the property owners appeal the decision, it is just a matter of the dollar amount, but the City will have right-of-entry onto the property. When asked what the legal costs would be for condemnation proceedings, he responded that it does not "hold a candle" to the difference between the City's offer and the $3,000, 000 asking price by the owner. The costs, based on some past proceedings using City Attorney Bill Goodrich of Randall, Dehn & Goodrich as being between $t,000 and $5,000. Mr. Wagner asked when the last time was that the City negotiated face to face with the attorney of the landowner. Economic Development Authority/January 12, 1999 Page 2 of 11