Item No: 5F.
Meeting Date: February
13, 2012
From: Raymond
S. Sharp, Public Works Director
Subject: Obtain
City Commission direction to staff relating to possible acquisition of property
located at 1325 West Main Street
Staff Recommendation:
Discussion
item only to obtain City Commission direction
Analysis:
During
the initial stages of streetscape design activities for West Main Street, it
became apparent that there is insufficient right of way for a full gateway
feature on the south side of Main Street at US Hwy 27. In the process of establishing contact to
evaluate the possibility of obtaining a landscaping easement for this corner,
Mr. Joe Shipes has brought a possibility to the city’s attention.
In
brief, the property owner has declared bankruptcy, and the property has been in
foreclosure proceedings for some time.
Approximately $250,000 is presently owed on the property. Mr. Shipes has proposed to the bank that, in
return for $50,000 of sponsorship benefits at various Partnership events, the
bank would transfer the ownership of the site to the city. The bank responded that their “best offer”
would be to accept $25,000 in sponsorship and $25,000 in cash.
Presumably
as part of their due diligence proceedings, the bank has conducted both a Phase
I and a Phase II Environmental Site Assessment on the site. These studies have been provided to the city,
with the bank’s permission. Staff has
reviewed the studies and discussed the matter with the consultant which
conducted the studies. The studies
indicate significant hydrocarbon contamination on the site.
Mr.
Shipes also coordinated a meeting of city staff and a representative of FDEP
who is instrumental in cleanup efforts in this district. FDEP has indicated that there may be funding
available to assist in the cleanup activities.
The consultant agrees this may be an option to offset the costs.
In
discussion, the consultant provided an estimate of cleanup costs. Given the type and extent of contamination,
the minimum cost of site cleanup is estimated at $350,000, over a three-year
period. There is a possible FDEP grant program which could be applied to this
site under which as much as $400,000 can be applied to cleanup activities. Under the worst-case conditions, the maximum
cost of site cleanup is estimated at $750,000.
There may be other programs which would fund this higher amount.
Staff
has directed the consultant to prepare an assessment of the site conditions,
refine the expected costs of cleanup and further refine availability of FDEP
and Federal funding for the cleanup.
The
consultant has suggested that a forensic analysis may be in order to better
characterize the compounds and sources of the compounds. Such an analysis may
be useful because of other contaminated sites known to be in the area. If the site contamination can be shown to
have originated from another site, then the financial responsibility for that
cleanup rests with that other site and not with 1325 West Main Street
site. It is possible that FDEP may fund
such a forensic analysis. Staff has
directed the consultant to investigate this option further.
The
City Attorney has also conducted some preliminary inquiries into the
acquisition process. It appears that the
city could acquire the property directly through several mechanisms, should
that be appropriate. He is prepared to
discuss this in greater detail. Should
the city acquire the property, it would be responsible for site cleanup, albeit
with the possibility that most, if not all of the costs would be covered by
FDEP or Federal grants and incentives.
If
the city acquires the property, under present land development codes, the site
could not be sold for commercial redevelopment because it is too small; it
could be combined with another site. It
may be that the site is best used as an enhanced gateway feature with a small,
landscaped park included in the streetscape design.
In
summary, it seems prudent to consider a contract for a possible acquisition,
with a lengthy (nine month long) due diligence period including a suitable
contingency that will allow the city to explore funding options with FDEP with
the intent that the cleanup will be completely funded by FDEP and/or Federal
funding and opt-out of the contract if cleanup costs are prohibitive. The Commission and the City Attorney will
certainly wish to include further contingencies, and should discuss them. Since the City may be willing to undertake
the task of exploring funding options and further analysis, it seems reasonable
to suggest that the $25,000 cash payment which the bank requested in its “best
offer” is better spent on the City’s efforts to obtain funding for the cleanup.
It
is also prudent to engage the services of the same consultant who performed the
Environmental Site Assessments throughout the due diligence period, since they
are already thoroughly familiar with the site and will be able to offer the
most cost-effective services for that reason.
Should the Commission direct staff to conduct further investigations of
the sort described above, we will use this consultant for that reason. Staff has used this consultant for other
projects; in the course of completing their work they have demonstrated that
they are very cost-effective, proactive in protecting their client’s interests,
and highly professional.
I
am prepared to answer further questions if any arise during Commission
discussion.
Options:
Staff
requests that Commission discuss this matter and provide direction to staff
regarding future activities relating to this site.
Fiscal Impact:
To
date, the consultant services requested by staff has a cost of $4,000, funded
through the City Manager’s Contingency Account.
Future costs are to be determined, based upon the actions directed by
the Commission, and will be reported to the Commission.
Submission
Date and Time: 2/10/2012 1:43 PM____
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Department: Public Works Prepared by:
R. Sharp
Attachments: Yes____ No X _ Advertised: ____Not Required ______ Dates: __________________________ Attorney
Review : Yes___ No ____
_________________________________ Revised |
Reviewed by: Dept. Head rss Finance Dept. __________________ Deputy
C.M. ___________________ Submitted by: City Manager ___________________
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Account
No. 001-1221-512.99-90 Project
No. ___________________ WF No.
______________________ Budget __$100,000_______________ Available
_$100,000____________________ |
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