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HomeMy WebLinkAboutRes2007-060 Sponsored by: Oates .... CITY OF SEWARD, ALASKA RESOLUTION 2007-060 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE CITY MANAGER TO PROCEED WITH THE ACQUISITION OF LAND (GRISWOLD PROPERTY), COMPRISING APPROXIMATELY 9.11 (+/-) ACRES OF THE SOUTHWEST CORNER OF THE UN SUBDIVIDED REMAINDER OF U.S.S. 1864, AS REFLECTED IN THE U.S.S. 1864 KPB REPLAT, PLAT NO. 2004-03, INCLUSIVE OF RIGHT-OF-WAYS OF APPROXIMATELY 1.11 (+/-) ACRES EXTENDING SOUTH FROM THE INTERSECTION OF OAK STREET AND HEMLOCK STREET AND SUCH ADDITIONAL RIGHT-OF-WAYS TO PROVIDE CONNECTING ACCESS TO THE 8 ACRE PORTION OF THE PROPERTY, AND APPROPRIATING FUNDS FOR THE FUTURE LONG TERM CARE SITE FOR A PURCHASE PRICE OF $830,000.00 - WHEREAS, the proposed acquisition is a crucial component necessary to move forward with the construction phase for the future Long Term Care Facility ("L TCF") in the City of Seward; and WHEREAS, in comparing alternative sites for the LTC, the Seward City Council has weighed the issues of safety, suitability, timing, and price, where the total cost of property acquisition, site preparation, on-site building and landscape design, road and utility design, and installation of paved roads, water, sewer, and electric utility infrastructure; and WHEREAS, time is ofthe essence in acquiring a site for the construction of the LTCF and the City has located land owned by Carol Griswold and Frank Griswold ("Sellers") who have agreed to sell to the City sufficient land for constructing the L TCF on the terms and conditions set forth in the accompanying Purchase and Sale Agreement ("Agreement"); and WHEREAS, considering all of the evaluation criteria including cost, the proposed eight acres of property located directly west ofthe Seward Middle School ("Griswold property") is equal or superior to all other sites in terms of safety (seismic, soils, proximity to flooding, road access), suitability (soils, sloping, views, access, neighboring properties), timing (6-9 months to construction) and overall price; and WHEREAS, the total estimated cost of preparing the Griswold property for construction is $2,395,000, including the following: 1) property acquisition = $830,000; 2) design costs = $525,000; 3) site work = $400,000; and utility installation (paved roads, water, sewer, electric) = $620,000, and this total package price is lower than any ofthe other site alternatives considered by the City; and - WHEREAS, the total cost ofthis property relative to all other properties considered by the City results in a minimum cost savings of$300,000, in addition to being equal or superior in terms of nearly all ofthe other evaluation criteria; and CITY OF SEWARD, ALASKA RESOLUTION 2007-060 ~ .....i WHEREAS, the total aforementioned costs are within the original project cost estimates and are expected to be repaid through the issuance of revenue bonds which were approved by the Seward City Council by Resolution 2006-28 on March 13, 2006, as amended in Resolution 2007-50 on May 14, 2007; and WHEREAS, considering the nature of this project and factors of time, cost, and development requisites, the land and right-of-ways described above and in the Agreement will best meet the City's needs; and WHEREAS, Seward City Code Section 7.05.120 permits the acquisition ofreal property by negotiation; and WHEREAS, the essential terms and conditions contained in the form of purchase and sale agreement (the "Purchase and Sale Agreement") have been available for public inspection for at least (10) days in the office ofthe City Clerk. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OF SEWARD, ALASKA that: ..... Section 1. The recitals are hereby incorporated by this reference as findings in support ofthis resolution. The City Council further finds it is in the best interest of the City of Seward ("City") to purchase, by negotiation, and develop private property including right-of -ways in an amount of approximately 9.11 acres as substantially described in the accompanying Purchase and Sale Agreement (the "Agreement") for the future site location of a Long Term Care Facility in the City, subject to capital financing and other conditional terms contained in the Agreement attached hereto. The City Council also finds that the essential terms and conditions in the Agreement and the method of acquisition are in the public interest. Section 2. The City Manager is hereby authorized to proceed with the acquisition ofland and right-of-ways (together, the "Property") described as comprising approximately 9.11 (+/-) acres of the southwest comer ofunsubdivided remainder of D.S.S. 1864, as reflected in the D.S.S. 1864 KPB Replat, Plat No. 2004-03, inclusive of right-of-ways of approximately 1.11 (+/-) acres extending south from the intersection of Oak Street and Hemlock Street and such additional right-of- ways to provide connecting access to the 8 acre portion of the Property (all more specifically described in the Agreement), with such Property to be surveyed and platted pursuant to the terms of the Agreement, and to execute the Agreement for a purchase price of$830,000.00 in substantially the form as presented at this meeting, and any other necessary legal documents to acquire fee simple title to the Property together with certain right-of-ways and to take all such action necessary under the Agreement to complete the purchase. Section 3. The City hereby assumes Seller's road and utility development requirements as .... CITY OF SEWARD, ALASKA RESOLUTION 2007-060 ... described in Seward City Code Title 16 for the City's purchase of the Property. Section 4. Funds in the amount of $10,000.00 are hereby appropriated from the General Fund fund balance account 101-0000-3050 to the Seward Long Term Care Facility Project Land Account 670-6700-5910 as an earnest money payment to be made in accordance with the Agreement, and additional funding in the amount of$830,000.00 is hereby appropriated from capital financing proceeds, provided revenue bonds are approved and issued by the Alaska Municipal Bond Bank. Section 5. This resolution shall take effect (30) days following passage and posting. PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 25th day of June 2007. THE CITY OF SEWARD, ALASKA 7~~ Vanta Shafer, Mayo ... AYES: NOES: ABSENT: ABSTAIN: Dunham, Valdatta, Schafer, Bardarson, Thomas, Amberg, Shafer None None None ATTEST: f) , / / I \ ,--....:',' --------, "f/Y'L,)- . J Lewis ity Clerk, CMC \,\'"""," (City Seal) ~,'\~~ ~:'.~~~~""" ~ 6' ...o?-i'O,~';:.~O -==. .. ."v ~",f~..". :: ""l:.~ '0...... .. ......... ~ ...- :: ; 81.....1 \L : : ~ 0 \ .C/f'-. i 0 S ~..\""""- .:- ....... ^. . 4Ir ~ ~f~:..:~ ",,:.' 'fJ- ~ ... "., . 11'r" 1 "g.. ,~..:- .# "',..{,~~..'.7u.h". ~c-;,~ ...4ftI "": 1.: 0 F P...\..,,\..,... "II, ~ Hil"'\\ - Council Agenda Statement Meeting Date : June 25, 2007 From: Phillip Oates, City Manager Agenda Item: Purchase 9.11 (+/-) acres of the southwest corner of the unsubdivided remainder of U.S.S. 1864, as reflected in the U.S.S. 1864 KPB Replat, Plat No. 2004-03, inclusion of right-of-ways of approximately 1.11 (+/-) acres extending south from the intersection of Oak Street and Hemlock Street and such additional right-of-ways to provide connecting access to the 8 acre portion of the property, and appropriating funds for a Long Term Care Facility in Seward for a purchase price of $830,000.00 BACKGROUND & JUSTIFICATION In early 2005, the City of Seward began considering potential sites for a new long term care facility (LTCF) in Seward. At that time, it was understood that a requirement existed to collocate any new hospital with the LTCF. This required a site of approximately 12 to 14 acres. On July 13, 2005, the City Council approved Resolution 2005-65, authorizing the use of Lots 11A and 12A of the Fort Raymond Subdivision #1 as the site for the new LTCF. In November, 2005, the City Council authorized funding to proceed with an application for the Certificate of Need with the State of Alaska. On November 28, 2005, the City Council approved resolution 2005-131 establishing a contract with Architects Alaska as the LTCF design firm. Since healthcare facilities in Alaska cannot be constructed without the State’s prior approval, the City Council authorized Providence to hire a hospital consultant to gather all of the information necessary to submit an application with the State. This process took 10 months, followed by 5 months for review by the State, for a total of 15 months. The application process required proof of support for the LTCF from the community, as well as financial justification for the project. These requirements generated many meetings with the public, healthcare providers, staff, and residents of the current Wesley LTCF. The design for the project officially began on December 5, 2005. Detailed site analysis was conducted and included two extensive geotechnical analyses, wetlands studies, a phase 1 environmental assessment, and a flood hazard analysis. The results of these studies were finalized March 14, 2006. These studies revealed that fill in the amount of $1.5 million would be required to get the site adequately above the base flood plain elevation set by FEMA. In addition, the geotechnical analysis determined that the soils at the Fort Raymond site were prone to liquefaction in a seismic event to depths of 80’. After a preliminary foundation design was completed, it was determined that seismic mitigation costs would be appropriately $2 million. The combined cost to make the site buildable was estimated to be $3.5 million. These factors offset the advantages of using existing City land for construction of the facility. In a letter dated March 31, 2006, Afognak Construction & Excavating, Inc. offered approximately 27.5 acres for sale to the City in and near Forest Acres for a price of $871,500. RESOLUTION 2007- PAGE 2 of 3 The sale agreement presented at that meeting was subject to a geotechnical analysis, availability of bond funds, and other stated conditions that the LTCF could be built on the property. On July 12, 2006, this agreement was signed with Afognak Construction & Excavating, Inc. to purchase approximately 27.5 acres of land and meet certain conditions. The application to construct the LTCF was submitted to the State on September 21, 2006. Fourteen days after the application was submitted to the State of Alaska, the City submitted an application to the Alaska Municipal Bond Bank seeking bond financing. The Bond Bank could not take action on the City’s request until the State approved the Certificate of Need. The State Department of Health and Social Services administration originally anticipated State approval for the Certificate of Need application by November, 2006. However, approval took 5 months. Reasons for the delay included: 1) the magnitude of the project, 2) the fact that the proposed facility would be the first Green House facility in the state and therefore required additional review time, and 3) the outcome of the October elections. Specifically, the staff of DHSS requested that the Commissioner hire an outside third-party consultant to thoroughly review the City’s application, which caused delay in receiving approval. The City received approval from the State for its Certificate of Need on February 22, 2007. On the following day, the City staff submitted a request to the Alaska Municipal Bond Bank, asking them to take action on the City’s application for revenue bonds. The Bond Bank typically meets quarterly, but to accommodate the City’s loan application, the board met on April 9, 2007. At that meeting, the City’s application for bond financing was approved. Ultimately, the Certificate of Need process took a total of 15 months, and the bond process took an additional 7 weeks. City staff had little control over the timeline, since the Certificate of Need approval rested with the State. Two other factors had an impact on purchasing the property from Afognak Construction & Excavating, Inc. The first was the October 2006 flooding that significantly damaged the Japp Creek levy adjacent to the proposed LTCF site. The second was the expiration of the purchase and sale agreement in January 2007 (180 days from July 12, 2006). As a result of the flood, building the LTCF on the Forest Acres site now required repairing and certification by FEMA of the Japp Creek Levy or repairing the Japp Creek Levy, elevating the LTCF site above the flood plain, and redesigning plans for utility connections to the site. Certification of the levee by federal authorities would have been a difficult, time consuming, and uncertain process. Elevating the site and redesigning the utility infrastructure would add considerable time and expense to the project. As a result of these developments, the City Council directed the City Manager to develop and compare alternative LTCF sites with the site near Forest Acres. Other factors became know at that time that had an impact on a comparison of possible sites for the facility. Clarification was given by the State that a LTCF did not require collocation with a hospital. The size of the site could therefore be reduced to approximately 8 acres. In addition, it was determined that the bond issue was not site specific. As a result of a consideration of all of these factors, three alternative sites were compared to the site near Forest Acres. RESOLUTION 2007- PAGE 3 of 3 In comparing alternative sites for the LTCF, the City Manager considered the issues of safety, suitability, time, and cost. The cost considerations included the total costs of property acquisition, site preparation, on-site building, landscape design, road and utility design, and installation of paved roads, water, sewer, and electric infrastructure. The time required to complete the project was another factor impacting cost because the existing facility began to lose revenue in January 2007 because of the age of the facility. As a result of a comprehensive comparison, property owned by Carol Griswold and Frank Griswold was assessed as the most desirable location for the LTCF. Their property, located directly west of the Seward Middle School, was superior to all other sites in terms of safety (seismic, proximity to flooding, road access), suitability (soils, slope, access, neighboring properties), time (6-9 months to construction) and overall price. Considering the nature of this project and the factors of safety, suitability, time, and total cost, the Carol Griswold and Frank Griswold property and right-of-way will best meet the City's needs. CONSISTENCY CHECKLIST: Where applicable, this Resolution is consistent with the Seward City Code, Charter, Comprehensive Plans, Land Use Plans, Strategic Plan and City Council Rules of Procedures. FISCAL NOTE The total estimated cost of preparing the Griswold property for construction is $2,395,000, including the following: 1) property acquisition = $830,000; 2) design costs = $525,000; 3) site work = $400,000; and utility installation (paved roads, water, sewer, electric) = $620,000. The total cost of the property, relative to the other properties considered by the City, results in a minimum cost savings of $300,000. In addition, the site is equal or superior in terms of nearly all evaluation criteria. The total aforementioned costs are within the original project cost estimates and are expected to be repaid through the issuance of revenue bonds which were approved by the Seward City Council by Resolution 2006-28 on March 13, 2006, as amended in Resolution 2007- 50 on May 14, 2007. Purchase of this private property is contingent on the positive outcome of remaining site analyses, as well as obtaining capital financing from the Alaska Municipal Bond Bank. Approved by Finance: ___________________________________ RECOMMENDATION City Council approve the purchase of 9.11 (+/-) acres of the southwest corner of the unsubdivided remainder of U.S.S. 1864, as reflected in the U.S.S. 1864 KPB Replat, Plat No. 2004-03, inclusion of right-of-ways of approximately 1.11 (+/-) acres extending south from the intersection of Oak Street and Hemlock Street and such additional right-of-ways to provide connecting access to the 8 acre portion of the property, and appropriating funds for a LTCF in Seward for a purchase price of $830,000.00.