Agenda - Economic Development Authority - 02/15/2000

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DESCRIPTION OF PROPERTIES Makens Property The Makens Property, 55.8 acres, is owned by L.W. and Diana M. Makens. There are presently two buildings on the property: one that is leased by Amcor Concrete and the other leased by Kenko, Inc. - Lease Agreement with Amcor The present lease agreement between Makens (Royal Concrete Pipe Company) and Amcor includes an "option to purchase" provision. In a meeting with a representative from Amcor, City staff was informed that Amcor intends to exercise its option to purchase the land. Amcor's portion of the Makens property is approximately 20 acres of the total 55.8 acre parcel, and located in the northwest portion of the property. Given this impending sale, and Amcor's willingness to work with the City to make site improvements including installing berms and fencing, the feasibility analysis was adjusted to focus on a purchase and redevelopment of the remaining 36 acres. ~ Environmental Assessment An environmental site assessment was conducted in the Fall of 1999 by Braun Intertec to determine whether significant outstanding environmental issues exist on the Makens property. Soil and groundwater samples were collected and analyzed, and the Braun report concluded that soil and groundwater contamination issues could not be identified at the site. While the results of this analysis do not guaranty that soil contamination will not be encountered in isolated sites, a reasonable assessment of costs to remove debris, and other environmental remediation, was estimated at $390,000 to $500,000. This estimate includes the cost of removing concrete rubble, footings and piles of material such as concrete and asphalt, and the cleanup of spills and other environmental remediation as needed. (Attachment 2: Summary of Property Conditions). - Cost to purchase land On May 21, 1999 Bruce Maus, Corporate Real Estate, Inc., forwarded a letter to Mike Mulrooney, Advance Resources, indicating that Corporate Real Estate, Inc. was representing the owner of the Makens property and offered to sell the property for $.85 per square foot for a 37-acre parcel. The total price for this parcel was stated as $1,369,962. In order to determine the appropriateness of this asking price, Herman Appraisal Services, Inc. was hired to inspect the property and estimate the "as is" market value. The results of this analysis showed an "as is" market value as of Septexnber 7, 1999 of $1,176,000 for the entire 55.8 acres of the property. This calculates approximately $.50 per acre. Clearly some differences exist between the asking price and the appraised value which would need to be taken into consideration if the city chooses to negotiate with the present property owner.