04-0151R

RESOLUTION AUTHORIZING AN AGREEMENT WITH SPAD TO PURCHASE CERTAIN PROPERTY ADJACENT TO THE NEW GARFIELD AVENUE SERVICE CENTER IN AN AMOUNT NOT TO EXCEED $30,000.

BY COUNCILOR STOVER:

RESOLVED, that the proper city officials are authorized to enter into a agreement substantially in the form of that on file in the office of the city clerk as Public Document No. ________________ with the Seaway Port authority of Duluth to purchase certain property, generally depicted on the map appended to said agreement, for $0.50 per square foot plus the cost of environmental investigation in an amount not to exceed $30,000 to be allocated from Fund 0522-500-5510.


STATEMENT OF PURPOSE:  This resolution authorizes the city to agree to purchase certain property from the Seaway Port authority for use in conjunction with the new Garfield Avenue service center.

The property in question is presently owned by the Union Pacific Railroad company. The railroad is willing to sell this parcel (approximately 1.05 acres, 45.343 square feet) along with other property it owns adjacent to the parcel in question as part of a single transaction. SPAD has a use for some of the remainder and a private property owner in the area wants the rest of it; therefore, there are buyers for all the land.

The reason the city needs the property is for storage related to the Garfield Avenue facility. Cost will not exceed $30,000 (land - $22,670 and related environmental investigation - $7,330).

SPAD has agreed to act as both a buyer, for the property it will keep, and as a broker for the remainder of the property and has been able to negotiate a very reasonable price for the land. However, the railroad is not willing to accept any kind of liability for the land after it sells it, and SPAD is unwilling to accept liability related to land it is simply passing through to other buyers.

Therefore, the city will have the opportunity, prior to the purchase of the property from the railroad to have environmental investigation performed on the property. SPAD will not close on the property until environmental investigation is complete. But once SPAD does close on the property, the city will agree to buy the portion shown on Exhibit B and assume all liability with regard to it.