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Acquisition of the Wiser Choice parcel can be comprised of three parts - Building, Land, and Business (relocation, fixtures, etc.) The valuation of the building and land were determined by the independent appraisal and are likely to be items with little room to negotiate. State statute governs the amount a municipality can pay for acquisition relative to an appraisal, and the values considered are in the range acceptable not only to the seller, but similar to those contemplated for the sale of land to Mr. Wise for his proposed project in The COR. It is likely that the valuation agreed to for the acquisition of his parcel will be the same as that used for the sale of the property in The COR. Per direction at the February 6th HRA work session, a reveiw appraisal will be conducted utilizing a review appraiser that the City has utilized in the past for acquisitons in the US 10 corridor. At the February 6th HRA work session, Attorney Goodrich discussed with the HRA the implications of the relatively new state legislation relating to minimum compensation when a property owner is forced to relocate. This law essentially requires that, notwithstanding the land/building appraisal amount, the damages paid must compensate the owner with an amount sufficient for the owner to purchase a comparable property in the community. This is a complex statute requirement and there is little reported law for guidance. Specifically, this statute provides as follows: Minn Stat. §117.187. Minimum compensation. When an owner must relocate, the amount of damages payable, at a minimum, must be sufficient for an owner to purchase a comparable property in the community and not less than the condemning authority's payment or deposit under section 117.042, to the extent that the damages will not be duplicated in the compensation otherwise awarded to the owner of the property. For the purposes of this section, "owner" is defined as the person or entity that holds fee title to the property. Recommendation: The Development Management Team recommends that the City Attorney, Development Manager and HRA Executive Director proceed with the negotiations on land and building owned by Mr. Jeff Wise as outlined in the background and observation sections fo this case and in the attached resolution. Funding Source: Funding source for the construction of the Sunwood Realignment and property acquisition is currently under review based upon discussion at the January 24th City Council meeting. Final funding plan for the project will be brought forward to the City Council in the next 3 0-45 days. Sources to include LCA grant fudning, TIF 14 proceeds, land sale proceeds, and undesignated reserves. Council Action: Provide consensus direction on the process in acquiring property owned by M&W Holdings, LLC - Jeff Wise Resolution Sunwood-Armstrong Parcel Exhibit Attachments Form Review Inbox Reviewed By Date Darren Lazan Heidi Nelson 02/09/2012 03:00 PM Heidi Nelson (Originator) Heidi Nelson 02/09/2012 03:42 PM Darren Lazan Amy Dietl 02/09/2012 03:50 PM Kurt Ulrich Kurt Ulrich 02/09/2012 04:23 PM Heidi Nelson (Originator) Heidi Nelson 02/09/2012 04:28 PM Form Started By: Heidi Nelson Started On: 02/09/2012 Final Approval Date: 02/09/2012