12-21-88 Development Comm MinutesSpecial Committee Meeting
December 21, 1988 7:30 AM Lighterside Restaurant
ATTENDING: Ed Gallagher of Community Development, Steve Olson, Paul
Wachholz of the KDC, Noel Furlong, Clare Hafferman, Jim Atkinson and Wayne
Saverud of the City Development Committee, Gordon Pirrie of the Parking
Commission, and Mayor Ed Kennedy.
This meeting of representatives of the city, parking commission and KDC was
called to look at options and discuss a scenario to put together and present to
FVCC for the purchase of the property they have for sale.
Chairman Saverud opened the meeting by stating that at the KDC Executive
Board meeting on Dec. 9th they had expressed concern over the college
selling their property 'piecemeal', a rent/lease back agreement,
demolition/site clearance costs, etc. This meeting was called to try to
address these concerns and possibly look at a package of three or even four
parcels to purchase instead of the original two packages that were mentioned
in the Statement of Intent made by the council to the college.
The committee discussed at length the value of all four parcels, both officially
appraised and estimated. They also discussed the probability of college
• properties having asbestos throughout and the cost of demolition because of
that problem. There was no mention of asbestos in the packet that FVCC
provided the committee. It was agreed that this had to be determined before
any sort of offer can be made to the college.
The committee also discussed the fact that when the buildings are acquired
the city will have time to evaluate how to dispose of the property. This can
either be by Request for Proposals for individual buildings, if they are
economically feasible for rehabilitation, but it is important to set aside
demolition monies in the event that they are not. It was agreed that the
cleared land would be most attractive to a developer for highest and best use.
Paul Wachholz stated that unfortunately there really aren't enough facts yet to
make any decisions, he feels the KDC must have more information about
demolition costs, etc. He also feels the city needs to do away with all the
variables for the buyer, because they do not like to have to go through the very
process that this committee is going through now, wondering how much it'll
cost for demolition, compaction and resurfacing, etc. Only after the facts are
in place can an intelligent decision be made as to a bid for two, three or four
buildings, and/or what. The KDC feels they are committed on two buildings,
the college would like to know the fate of all their properties, however, until
all the facts are determined, the city cannot commit to more.
The committee discussed
at length the obligation
that
the college
has to
Concordia for Melton Hall
and finally agreed that
it is
indeed the
college
obligation, the city should not have to solve that problem. They felt the
$275,000 owed is much more than the property is worth but if a package deal
is made the college can do as they wish, pay off their debt or not.
There was much debate on how to figure a reasonable rent/lease agreement.
Paul stated that a certain percent of the entire amount paid for the property
could be used to figure a rent. Noel said he would prefer using a square
footage rental if the city could decide what a fair dollar amount per square
foot would be.
Ed Gallagher asked Mayor Kennedy if he felt the timing, knowing the concern
about the TIF bond and arbitrage, is in sync with good faith. Mayor Kennedy
responded with yes, and asked Ed where the college stands now in respect to
selling the bonds. Ed stated they are preparing with their underwriters now,
and when asked by FVCC how long it would take the city to purchase, he told
them when the committees for both sides can agree on an amount, its as fast
as the title company can close it. FVCC has an obligation in the first quarter of
'89 in excess of $300,000 for professional fees. If they pay those obligations
as they are incurred they will save 12 percent a year, which is part of their
desire to get some cash in hand early.
Paul stated that when the KDC meets again they will make some decisions,
but on behalf of the council and Mayor, they want to bring to the city a
finished product, and one they will be proud to affix their name to in future.
• It was decided that there are some important facts to bring out such as
checking into whether or not there is asbestos in the buildings, if so how
much and cost of removal. Also have Bob Gerhardt call Howart Fryett and
make two or three KDC members available to work with the college board on
the Concordia problem. Ed Gallagher and the Mayor will check into the
asbestos report and demolition costs. When all possible information has been
gathered and put together the committee will meet again before meeting with
FVCC.
The meeting adjourned at 9:15 AM.
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