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HomeMy WebLinkAbout1989-12-20 Council Packet - Work Session, ConeKenai City Council Work Session December 20, 1989 Purchase of Cone Property „rn„ �m^*�rcm mnmi tlnillRim�np iiml �i�l�l, .„,. .. NOTICE OF MEETING `free Kenai City Council will be holding a work ses- sion on Wednesday, December 20, 1989 at 6:00 P.M. in the Council Chambers. r To be discussed: Purchase of Cone Property The Public is invited to attend and participate. Janet A. Loper Deputy City Clerk 0 1791-18l1 CITY OF KENAI „ail G'aladal 44 4i"PI 2"Reolm « .M. ► M„ FAX 907-283.3014 NOT = CE OF ME E T Z NG The Kenai City Council will be holding a work session on Wednesday, December 20, 1989 at 6:00 P.M. in the Council Chambers. To be discussed: Purchase of Cone Property The public is invited to attend and participate. Janet A. Loper Deputy City Clerk DATED: December 11, 1989 TO DO L I S T DECEMBER 20, 1989 KENA= CITY CaUWC=L WORK SESSION 1. Administration to continue to pursue and process the necessary permits for the Beaver Loop Boat Launch project. 2. Council: Schedule work session for the proposed purchase of Cone property. jal KE NA = C I TY COUNC I L WORK O E O O = ON D e c emb e r 20, 1 9 8 9 — 6: 0 0 P. M. SUBJECT: Proposed Purchase of Cone Property Present: Williams, Measles, Smalley, Walker, Swarner Mayor Williams gave an overview of the proposed project and the need for the property. Mayor Williams also went into the "No Net Loss" policy which has been put on hold. PW Director Kornelis went through the applications that have been submitted to the Corps of Engineers for the project stating that they were "pre -applications". Mayor Williams went no to state that "I believe the appraisal is in error. It is based on residentially zoned property instead of commercial or recreational. It would appear that his background is more towards residential. Mayor Williams further discussed the price of the land in the past, however, it is not saleable unless Corps permits are obtained and a government agency has a better chance of obtaining them than prior individuals which is why the Cone property was not sold several years ago. "From a value-added standpoint it is worthless only as long as it cannot be used". The value will skyrocket once the permits are obtained. Mayor Williams cited several phone calls from individuals that feel the project is worthwhile and none object to the price. Councilman Smalley stated that the property would have to be rezoned also for the project, probably to the new recreation zone and asked if we could obtain another appraisal, this time based on a different zone and then it might more accurately reflect the true value. City Manager Brighton answered that he didn't think it would make a significant difference. Councilman Smalley noted that if it were zoned industrial we would have problems obtaining an permit. City Manager Brighton stated that if it were zoned industrial we would never get a permit. Councilman Walker discussed property values along the river versus property in wetlands, the price is based on the fact that we intend to use all of the property. Mayor Williams then went over the comparables that were used in the appraisals, City Manager Brighton stated that you can find fault with all parts of the appraisal. Mayor Williams agreed and stated that it boils down to whether or not we want to pay the price. Kenai City Council Work Session December 20, 1989 Page 2 Councilman Measles asked for figures on the total cost of the project. PW Director Kornelis stated that the figure is: $270,300 for project 180,000, for land $450,300 Total The grant is 75/25 with the City paying 25% and does not usually include land, however, it could be done. All is contingent upon obtaining the permit. Mayor Williams asked if the value lies with the owner or the buyer? We are buying on a contingency. Councilman Walker asked if we can pay more than the appraised value. Mayor Williams answered that we could, however, the public will not be happy. Most comments have been positive. Chester Cone spoke, saying that the appraisal is completely off in that he is looking at it for residential use which is not feasible at all. We felt that we were doing the City a favor at $180,000. In 1981 Miles Dean had the same idea for that parcel and went so far as to pay the money and very nearly obtained the necessary Corps permits. At that time it was appraised at $15,000 per acre. Mr. Lofstedt purchased an adjoining parcel and paid more than that. Ted Knight purchased a smaller lot, 1.5 acres on the same bench and paid $52,000. Mr. Cone went on to explain about putting in the existing roadway known as Cone Circle at a cost of $30,000 but, again because of Corps permits, is not able to use it. Mr. Cone stated that he is willing to donate one half of the gravel needed. Mayor Williams clarified that the cost of gravel to a contractor is $3.00/yard. PW Director Kornelis stated that the value of gravel is $6.00/yard and it is estimated we will need 4650 yards for the pad. The $6,00/yard includes the cost of hauling the gravel. Mr. Cone noted that the cost of hauling will be lower because the gravel is right across the road. Mayor Williams discussed fund balance and assets. City Manager Brighton pointed out that if assets are left, they generate $1 million per year and went on to list some of the other projects the City is proposing. Councilwoman Swarner stated that we are in favor of the project, just not $180,000. Councilman Walker stated his concerns over the appraisal and asked what it would be worth after the project is completed. City Manager Brighton stated that he wouldn't sell it for $1 million. Councilman Smalley stated that his former property which is close to the river but not on it, and it was sold for $11,000 per acre. Councilman Smalley indicated that he does not feel comfortable with $180,000 but would feel comfortable with $125,000. In looking at all the other projects I think we would have a difficult time justifying more than that. Kenai City Council Work Session December 20, 1989 Page 3 PW Director Kornelis stated that a contact in Juneau informed him that we are on the list along with Soldotna, they put the two requests together for one request for $400,000 and placed us in Region 2. The legislature will decide by region for money allocation. The time frame is July 1st if the CIP funding is approved and the federal year starts on October 1, 1990. I doubt we could get much of the project done until 1991. Mayor Williams pointed out that we are bidding on it to get a project that is identical to Soldotna. It is a shame to let Soldotna get ahead one more step. The sales taxes are considerably higher than Kenai's already because of the tourists. PW Director Kornelis stated that it takes 6 months before we will hear anything about the permits, then 60 days for hearings. There are certain times that we can work in the river, from May 15th to July 15th. Mayor Williams asked for a show of hands for those who would support the purchase at $180,000 - 2 (Walker and Williams) Councilman Walker expressed his belief that the price was attractive before the appraisal came out. Councilman Smalley disagreed, saying that the anticipated cost was to be an "up to" figure. Council agreed to direct administration to continue to pursue and process the permits and will meet again in a longer session later. Janet A. Loper Transcribed from notes