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HomeMy WebLinkAbout~Master - Authorizing submittal to IDOT an Offer to Buy Property at 122 North Oak Avenue RESOLUTION NO. 22-644 RESOLUTION AUTHORIZING SUBMITTAL TO THE IOWA DEPARTMENT OF TRANSPORTATION OF AN OFFER TO BUY PROPERTY LOCATED AT 122 NORTH OAK AVENUE,AMES FOR THE CITY OF AMES,IOWA WHEREAS, on August 23rd, 2022, the City Council directed staff to pursue a project to construct a new indoor aquatic facility at a site owned by the Iowa Department of Transportation (DOT), located at 122 North Oak Avenue. The property is 2.91 acres in size and contains two buildings — a 17,694 office building referred to as the North Annex, and a 3,752 square foot building referred to as the Conference Center. To facilitate the construction of the indoor aquatic facility, both structures and the other improvements on the property would be demolished; and, WHEREAS, the DOT utilizes a formalized process to dispose of excess property. This process is guided by specific state law requirements for the disposal of excess right of way, and applies a separate set of requirements for the disposal of non-right of way properties, such as the 122 North Oak Avenue property; and, WHEREAS, the DOT's process requires an independent appraisal to establish the fair market value of the property. The completed appraisal is then reviewed by DOT staff or another appraiser. DOT then notifies state agencies, counties, or cities and gives them an opportunity to purchase the property; and, WHEREAS, an "Offer to Buy" form is completed by the entity wishing to purchase the property, and must be returned to the DOT within 30 days of notification of the opportunity. The offer must equal or exceed the fair market value of the property as determined in the appraisal. Preference is given to the highest timely offer received by the DOT. If no valid offer is received within 30 days, the parcel is advanced to public auction; and, WHEREAS, based on the City's expressed interest in the property, the DOT retained an independent appraiser to establish the market value of the 122 North Oak Avenue property. The appraisal concluded that the market value of the property as of October 4th, 2021, is $2,900,000. The appraisal was then reviewed and certified by a second appraiser per DOT policy on October 31 st, 2021; and, WHEREAS, the appraisal notes that it assumes the property "does not suffer from soil or groundwater contamination,"and the appraiser did not review reports of any asbestos or hazardous materials that may be present on the site. The City retained a contractor, Impact7G, to complete an environmental analysis of the property. This analysis reviewed the history of the site and adjacent sites, explored subsurface soil conditions, and investigated for any soil contamination issues that may require mitigation. Testing confirmed the presence of contaminated soils which are isolated to the northeast corner of the property; and, WHEREAS, City staff has held several conversations with DOT staff regarding the property, the environmental conditions, and other aspects of the appraisal. These discussions included requests by the City to have the DOT reduce the purchase price of the property; have a second appraisal done; or to have the DOT reimburse the City for the cost of remediation/mitigation efforts related to the contaminated soils. The DOT has indicated from the start that the property is being sold as is, and denied all requests by the City. Thus, the purchase price remains at$2,900,000; and, WHEREAS, the DOT has delivered an "Offer to Buy"to the City which must be returned to the DOT within 30 days of notification of the opportunity. The action being requested of the City Council is to authorize the submittal of an offer to buy the property at 122 North Oak Avenue in the amount of$2,900,000; and, WHEREAS, after the City submits the Offer to Buy, the City will receive within several days, a letter indicating the offer has been accepted. Once accepted, the City would transfer payment of$2,900,000 to the state no later than January 5th, 2023. After the payment has been accepted, the ownership of the property is conveyed by a State Land Patent. This document requires review by DOT and State Land Office officials and is then signed by the Governor; and, WHEREAS, since the issuance of the State Land Patent (SLP) may take up to 45 days to be issued,there is language in the Offer to Buy agreement regarding a Mutual Benefit Sales Lease (MBSL). This Lease will allow the City to treat the property as its own until the SLP is issued. This is important to note as without the MBSL,the City would not be able to make any alterations (remove hazardous fixtures, asbestos removal, etc.) to the building until the SLP is received; and, WHEREAS, the Offer to Buy includes the legal description of the property, the purchase price, and other items, encompassing a mutual benefit sales lease,removal of items, and INC fiber relocation. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ames, Iowa, that the submittal to the Iowa Department of Transportation of an Offer to Buy the property located at 122 North Oak Avenue, Ames, in the amount of$2,900,000 and the entrance into the Mutual Benefit Sales Lease Agreement with the Iowa Department of Transportation until such time the State Land Patent for 122 North Oak Avenue is delivered to the City is hereby approved. ADOPTED THIS 13th day of December, 2022. Renee kall, City Clerk John A. Haila, Mayor Introduced by: Betcher Seconded by: Rollins Voting aye: Beatty-Hansen, Betcher, Corrieri, Junck, Rollins Voting nay: Gartin Absent: None Resolution declared adopted and signed by the Mayor this 13th day of December, 2022.