05-13-2002 Council Packet - Laserfiche WebLink

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L REQUEST FOR COUNCIL ACTION 1^<IEET\NG MAY \ 3 2002 CITY OF OHONO DATE: May 9,2002 ITEM NO: / ^ Department Approval: Name Ron Moorse Title City Administrator Administrator Reviewed:Agenda Section: City Administrator ’s Report Item Description: Purchase Agreement Related to City Owned Property The City is working with Dr. Carl Derg and his partners regarding their purchase of the two-acre parcel of property owned by the City at the comer of Highway 1 2 and Old Crystal Bay Road. They are planning a'dental office building on the site. Several months ago the City determined the value of the property, and this value was reflected in a purchase agreement proposed by Dr. Berg and his partners. Rolfe Worden, the City ’s real estate attorney, reviewed the proposed purchase agreement and prepared a revised agreement which was sent to Dr. Berg in mid-February. A copy of this revised purchase agreement is attached. The partnership proposed a number of amendments to the purchase agreement as laid out in the attached letter from Rolfe Worden. The most significant of the amendments relates to the portion of the property on w hich the Old Crystal Bay Road bike trail is located. The partnership w as not aware that the bike path was located on the parcel until recently. The partnership is proposing that the portion of the site on which the path is located be divided away from the remainder, and that the price be reduced by $33,000 based on a reduction of6,000 square feet at a value of $5.50 per square foot. The City Attorney has suggested to the partnership that It may be advantageous to retain the fee title to the bike path area and provide an easement to the City for the bike path. They have indicated the presence of the bike path has significantly impacted their development proposal. They believe the value of the total parcel should be reduced by the value of the bike path area. It is staff s recommendation that the sale of the property should include the entire property, including the bike trail area, and that the City retain an easement for the trail and that the price of the property be reduced by the value of the trail easement. When the City acquires easements for trails, it generally pays market value on a per-square-foot basis. It is reasonable to reduce the value of the parcel by the value of the easement, based on a value of $5.50 per square foot. The value of the parcel should be determined by subtracting the area of the easement from the total area of the property. COUNCIL ACTION REQUESTED; Motion regarding revisions to the purchase agreement related to the sale of the City ’s property at 2765 Kelley Parkway. 1