07-0582R


RESOLUTION AUTHORIZING AMENDMENT TO AGREEMENT WITH MILTON M. SIEGEL COMPANY AND CLYDE INDUSTRIAL PARK, INC., FOR VACATION OF EASEMENTS.

BY COUNCILOR JOHNSON:

     RESOLVED, that the proper city officials are authorized to enter into an amendment to an agreement dated April 29, 1987, with Milton M. Siegel Company and with Clyde Industrial Park, Inc., as successor in interest to Milton M. Siegel Company, addressing various minor encroachments on the Michigan Street and 29th Avenue West rights-of-way by vacating portions of said streets, by terminating the agreement.


STATEMENT OF PURPOSE:  The purpose of this resolution is to authorize an amendment to an old agreement entered into in 1987 to vacate portions of the rights-of-way for West Michigan Street and 29th Avenue West related to structures on the Clyde Iron property.


Apparently, in 1987 when the owners of Milton M. Siegel Company were in the process of acquiring the Clyde Iron property, a survey disclosed the fact that several existing buildings encroached on existing easements and had done so for many years. As a condition of completing the transaction and potentially producing a redevelopment of the site, the potential buyer requested and received from the city a commitment, in the form of the agreement referenced above, to vacate the parts of those easements being encroached upon and to otherwise give comfort to the purchaser that they would be allow to redevelop the property.


For reasons unknown at this time, the commitments to vacate were never carried through and so the encroachments and the agreement pertaining thereto remain existent. This fact, in turn, was discovered by Clyde’s lender’s title company (Clyde being the successor in interest to Milton M. Siegel Company) and they have listed it as an exception to Clyde’s title to the property. Clyde, their lender and the lender’s title insurer would all be satisfied if the existing agreement were simply terminated and, since the agreement was apparently an accommodation to the property owner in the first place and since the property owner and its lender now want the agreement to go away so that they can proceed to close on the financing and construct the project, staff is recommending that we again agree to accommodate the (present) owner and terminate the agreement.


It is likely that the encroachment issue will need to be addressed in the future but it does not seem to be in the city’s interest to delay closing on the financing and construction of the DHSC project to solve this problem at this time.