Agenda - Council - 10/10/2017 - Laserfiche WebLink

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two items were flagged as issues. One item was the car wash, and the several tanks of chemicals that remained on the site. Staff disclosed this concern with the seller. They have removed all liquids from the tanks. Staff has also added language to the PA to reflect this item. The second item was the underground oil tanks (discussed more below). Please see attached survey for details. Phase I ESA Generally, the purpose of a Phase I ESA is to do research on a property --to determine if physical testing of soils is needed. The Phase I ESA did come up with several recognized environmental conditions (REC). This gas station, was once a part of a larger site, which was home to several businesses over the years (several auto oriented). The larger site has experienced various environmental issues in the past, which have been documented with the MPCA. Additionally, this site is a gas station, which includes underground storage tanks for petroleum. With these two general items in mind, the various identified RECs will justify/ demand a Phase II ESA be completed on this project. NOTE: it appears that the MPCA has generally cleared (written closure letters) RE previous issues on the site. Please see attached ESA for details. Phase II ESA Generally, the purpose of a Phase II ESA is to physically test soils for potential contamination. Staff has been advised by Bruan InterTech (the company that completed the Phase I ESA), that we should consider completing tank removal, before we close on purchasing this site, for two reasons. First, if we purchase the site, with tanks remaining in the ground, we will hold some liability over those tanks, and any potential subsequent leaks (i.e. we are exposing the City to more potential liability). Secondly, regardless if we remove the tanks now, or after closing on a purchase, we will need to complete a Phase II ESA (mandated by the State after tank removal). The only difference is, if we wait until after we close on purchasing the property, we would then need to complete two Phase II ESAs. In summary, we can save money on Phase II ESAs by removing the tanks before closing. Please see attached ESA for details. Appraisal The asking price for this property is $695,000. The appraisal came back at $645,000. Staff has updated the attached purchase agreement accordingly. Staff is waiting to hear back from the seller on this item. Please see attached appraisal for details. Title Work The title work generally came back clean. The City Attorney did find a glitch in the chain of title (i.e. who the owner was). That item has been addressed by the Title Company, and the attached purchase agreement has been updated accordingly. Please see attached title work for details. Funding Source: Funding Source - short term - The City has a an account in place today, that captures revenues from all Ramsey -owned properties located along Highway 10, that were purchased via RALF, and are currently being leased to private organizations. This "Internal Ramsey RALF Fund" can ONLY be used on expenses related to RALF/ properties purchased via RALF. The balance of that account is $186,000 roughly. Staff is using this account as a temporary/ short-term project funding source (due -diligence costs). - long term - The long term/ permanent funding source proposed for this project is the RALF program. The the background section of this case describes the program. The attached application describes the City's proposal. Once the purchase agreement is closed, all costs will be funded via this new RALF program loan. Staff Funding Source Comment In the event the City doesn't close on this purchase agreement, we would not receive a new RALF award from the Metropolitan Council, we would be liable to cover our upfront due -diligence expenses (i.e. costs incurred before closing). In that situation, we those costs would be permanently charged to our "Internal Ramsey RALF Fund."