04-03-2003 Council Work Session - Laserfiche WebLink

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i TO: FROM: DATE: Mayor Peterson and Council Members Ron Moorsc, City Administrator March 31,2003 SUBJECT: Sale of City Parcel for Dental/Medical Office Background The City has agreed to sell the two-acre parcel at the northeast comer of Highway 12 and Old Cr> stal Bay Road to the Professional Partnership of Orono (PPO)for construction of a dcntal/mcdical office building. The City had been holding this parcel to ensure that the design and quality of the building constructed on the parcel would set the tunc for the design and quality of the office buildings planned along the north side of Highway 12 between Old Cry stal Bay Road and Willow Drive. Although the initial design and quality of the building proposed by the PPO were acceptable to the City, the plans recently were changed to reduce the cost of the building. The result was a lower quality building that did not meet the standards agreed to by the Council. The PPO has indicated they could provide a higher quality building if the City would reduce the cost of the land. Request for Reduction of the Pt ice of the Parcel 'fhe Council has recently received a letter from the PPO providing infonnation regiuding soil correction costs, and requesting the City to consider reducing the price of the property from the amount agreed to in the purchase agreement, ba.sed on the amount of soil correction costs. 1 he City ’s Appraiser, who performed an appraisal of the property as the basis for the City setting a sale price for the property, and the City ’s Consulting Engineer have both provided input regarding the price reduction request. The Appraiser indicated that soil correction costs can have an impact on the price of property if the amount of soil correction needed is significantly beyond w hat would typically be expected. The Consultant Engineer has indicated the soils report is clear about the amount of soil correction needed, and that the amount of soil correction required is typical for this area. 1 his information was available prior to the PPO signing the purchase agreement. The 1-foot subcut for the paved areas is typical for most soil types. The 5 foot subcut for the building pad is necessaiy only in the area of the perimeter footings, fhis depth for footings is, again, standard unless the soils are ver> pt>or. Please see the attached letter from Tom Kellogg of BRA. Design and Quality of the Building Although the PPO has focused on reducing the price of the parcel, the more important issue is whether the PPO w ill provide the design and quality of building the Council wants, to set the standard for the 0 \