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<br />Councilmember Elvig stated he is nervous about this project; he feels as though the City is <br />extending itself yet one more time, and he is in a real quandary of whether he should support this <br />or not. He realizes how important this is, and having land at a road map going across the bridge <br />helps draw interest to it. His hope is to create some interest for this, and hopefully get it mapped <br />and possibly receive funds from the RALF Fund in the future. The other thing is whether there <br />are opportunities to generate some revenues on this property, possibly through something like the <br />relocation of LP Gas. He stated first and foremost is the financing of the purchase; if it goes to a <br />finance situation the longer the better. He inquired if it is a possibility that someone could come <br />forward in the next three to four years and buy this if the City can get this crossing mapped. <br /> <br />City Administrator Norman replied it is a possibility, but he is not certain that the property will <br />even be eligible for Ralf funding or that Ralf funding will be available. He was hoping staff <br />could determine a source for funding, but this $133,000 will likely have impact on the capital <br />and personnel needs next year. The other side of this is that the City would be the one that says <br />they cannot do this purchase and they may lose a corridor. <br /> <br />Councilmember Elvig inquired about the possibility of revisiting this purchase in another 12 <br />months. <br /> <br />City Administrator Norman replied it is a gamble because the land will fall out of the City's <br />hands, but it is a position the City can take. <br /> <br />Councilmember Elvig noted typically an arrangement with a contract for deed comes with a very <br />minor amount down, as opposed to this agreement of $1 million down. <br /> <br />Finance Officer Lund advised the City does not have the legal authority to enter into the <br />obligation. The City does have the authority to enter into the similar obligation of a contract for <br />deed. A contract for deed is limited to a 5-year term. A balloon payment on a contract for deed <br />could be troublesome as it could be seen as a circumvention ofthe 5-year term. <br /> <br />Councilmember Elvig inquired about the appraisal value on this land. <br /> <br />City Administrator Norman replied he believes this land is valued at $100,000 per acre; however, <br />it is not known what will happen to prices in six months or one year. <br /> <br />Chairperson Strommen expressed concern in trying to locate the $133,000 somewhere else in the <br />budget, noting the difficult time the Council had with the budget last year. She stated the <br />Council agreed to this purchase in concept, but this has been the first discussion of financing the <br />purchase. <br /> <br />City Administrator Norman concurred this was only agreed to in concept. He indicated staff has <br />been informing the County and the property owner this purchase is not a done deal yet, and that <br />the City needs to work through how this will be financed. If directed by the Council he will meet <br />with the County and inform the property owner he is not certain there will be a closing on the <br />property. <br /> <br />Finance Committee / June 13,2006 <br />Page 3 of5 <br />