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<br />Case #12: Approve Purchase Agreement and Loan Agreement for the Purchase of <br />Property Located in the Highway 10 Corridor <br /> <br />City Attorney Goodrich stated that the City has been negotiating with the Hamiltons and <br />Holaseks to purchase their parcel of land within the Highway .10 corridor at 6205 and 6165 <br />Highway 10 NW. He stated that the parcel will be purchased with Revolving Acquisition Loan <br />Funds (RALF) through the Met Council. He stated that a loan agreement between Met Council <br />and the City must be entered. He stated that there is a tenant in the residence. and the. City is <br />required to fmd a comparable property for them and pay rent for a 42-month period of time. He <br />stated that it is estimated that this cost will be approximately $18,000. <br /> <br />Councilmember Look confirmed that there were no condemnation proceedings taken: to acquire <br />this parcel of land. He stated that this property was involved in drainage improvement project <br />and asked who will absorb the difference in the assessment amount if the property is sold. <br /> <br />City Attorney Goodrich stated that there was not an assessment per se, but a special drainage <br />: district was created for this improvement and it was paid with general taxes. He stated that this <br />property will not be taxable property anymore. He stated that he assumes the General Fund will <br />pay whatever is necessary to pay back the drainage district. <br /> <br />Councilmember Look stated that he met with Larry, the tenant on the property right now and <br />noted that he has a submarket lease rate on the property and does not want to move. He <br />questioned whether the City can negotiate and rent to Larry, to offset the relocation costs. <br /> <br />City Attorney Goodrich stated that the City Council will need to determine if it wants to be in the <br />rental business with this particular property, but noted that this does not make the $18,000. <br />relocation costs go away, it would just delay them. <br /> <br />Councilmember Dehen asked if acquisition of this property was a high priority because it was <br />blighted property. <br /> <br />Assistant City Administrator Nelson stated that because there is a limited amount of fundings <br />available for purchase of this type of property, it was higher on the. priority list. She stated that <br />the City is working with the Met Council and looking at several other. pieces of blighted <br />properties that also fit into the priority list. <br /> <br />Councilmember Dehen asked why the City would have to buyout the lease and would not just <br />wait until the cllI'ient tenant leaves. <br /> <br />City Attorney Goodrich stated that there could be.another tenant if the current tenant leaves. <br /> <br />Assistant City Administrator Nelson stated that the City's philosophy is to try to purchase this <br />land at today's prices and be proactive in management liabilities in the corridor. She stated that <br />if there is a functioning business 'on the property, the City has not taken on leases and liabilities, <br />but in this case, there are two older structures on the site and the City does not feel it is a good <br />liability investment for the City to take on. <br /> <br />City Council! September 25, 2007 <br />Page 21 of 27 <br /> <br />P31 <br />