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HomeMy WebLinkAbout08.02.2004• • COUNCIL WORK SESSION August 2, 2004 4:50 p.m. Council Chambers Members present: Mayor Hurley, Kincaid, Cole, Greenwood, Clark, Schmitt, Gunderson, Welper. Moved by Welper, seconded by Kincaid that the Agenda, as proposed, by approved. Ayes: Seven. Motion carried. Noel Anderson, City Planner, reviewed the proposed Sale of Property Policy. The Sale of Property Guidelines were originally adopted to devise a method for the sale price of city -owned property. It was based on the same methodology of a return in taxes on land sold, similar to our minimum taxable value amounts required when the city sells lots in industrial parks. Thus, the five-year return and eight -year return allowances to be accounted toward the sale price. It was also written to take into account the city not only has buildable lands and parcels, but smaller and irregular shaped unbuildable parcels as well, which may take special consideration for their sale price and to whom they are sold (abutting property owners, etc.). The proposed policy would: 1. Change the Guidelines to a Policy. 2. State the order of how the asking price is determined. 3. State specific reasoning why a price can be reduced (easement or increase in taxable value through improvements). 4. Put a minimum amount for sales (70%) which do not include taxable value improvements/increases. The goal of the policy is to mathematically calculate a price, based on the assessed value or determine an asking price method, with specific percentage deductions for easements and taxable value improvements. The only undetermined percentage amount is the Commercial/Industrial unbuildable category for areas in rear (alleys) or of little to no value. This is due to commercial properties paying higher tax rates than residential, employing people and proposed use of land (i.e. parking lot, access, etc.). The following will be used when determining price: 1. A current appraisal price. 2. The current assessed value for that parcel. 3. The current price per square foot of abutting property. 4. The current price per square foot of adjacent property. 5. The applicant or city staff may replace an above -determined asking price with current information on the sale of abutting or adjacent land. Prices for residential buildable and unbuildable property may be modified because of the following information: payment of future taxes may be counted against the purchase price, located within an area which has not seen recent new housing construction, located within an easement; otherwise a minimum sale price of 70 percent of the determined price. Prices for commercial/industrial buildable and unbuildable property may be modified because of the following information: areas within TIF or Urban Renewal Districts or Industrial Parks, payment of future taxes may be counted against the purchase price, may multiply by 50 percent for area located within an easement, may multiply by 50-100 percent for area in rear or determined to have no value; otherwise a minimum sale price of 70 percent of the determined price. The following is for all properties: 1. Payment of future taxes may be counted against the purchase price. This shall be counted for five years. For CURA sites, it shall be extended to eight years. Council Work Session August 2, 2004 Page 2 2. Goal is to have construction begun within a year timeframe from sale. 3. Development costs may be counted against purchase price: survey costs, demolition costs for redevelopment, etc. 4. The council shall not sell unbuildable parcels of land, except to abutting property owners to try and create buildable parcels of land for future tax base development. 5. The offer amount and potential sale will also consider "Smart Growth" principles to allow land to be used for the highest and best purpose in terms of allowing businesses and uses to grow in the developed portions of the community. Councilperson Gunderson stated that his biggest concern with unbuildable parcels is that it may be unbuildable when the city sells it, but it could become buildable through some type of development. Mayor Hurley asked where the policy mentions "may multiply by 50 percent" that the words be changed to "may multiply by .05 or divide by 2." Councilperson Cole asked if the council adopts the policy would that insure us that no one would come before the council to purchase property for twenty-five cents when the property has an assessed value or $1,000. Mr. Anderson responded that citizens would still have the opportunity to come before the council. Mayor Hurley stated that most of the offers to buy should be reviewed by Planning and Zoning and if the selling price meets the determined price requirements, the offer to buy would be brought before the council. Councilperson Welper stated that the council represents the seller more than the buyer. A few years ago, the former administration held town meetings to come up with ideas to raise revenue, and here is a genuine way to do that. Councilperson Welper stated he feels it is extremely important the council treats everyone the same. Councilperson Cole stated that she would like to treat everyone the same, but some pieces of property the city should be happy to get rid of for $50 or $75. Councilperson Cole stated she supports adopting the policy, but with the understanding there will still be people who come before the council wanting to change the rules. Councilperson Kincaid stated he feels the council will have to look at each one of the requests to buy property on an individual basis. When the property has no value, he would be glad for that person to add it to their property so they can take care of it and the city would not have to maintain the property. Councilperson Schmitt stated even if the council approves the policy, the general public will still want to talk to the council about the property having no value. Councilperson Schmitt stated the council will still have about 30 percent of those wanting to buy city property come before the council saying the property is unbuildable. Mayor Hurley stated if the council backs away from the policy, they are telling the public the property is only as good as the person telling the best story, and that doesn't send a clear message. Councilperson Greenwood stated he would support the policy, but he would like to adopt a threshold or establish a filing fee. Councilperson Cole stated she would support the policy with the understanding that you cannot write a policy to cover all the incidents and the council will have to deal with some of those. Councilperson Kincaid agreed with Councilperson Cole. Councilpersons Welper and Gunderson approved the policy as written. Councilperson Schmitt agreed with the policy, but would like the goal to have construction begun within a year timeframe from sale be changed to a "pre -determined time." • • Council Work Session August 2, 2004 Page 3 • • Councilperson Clark stated he is opposed to the policy. Councilperson Clark stated he is concerned persons with unbuildable property will tell the city to go ahead and keep the land and then the property will become overgrown, or they will continue treating the property the same and the city will get nothing. Some land is not good to anyone but the property owners. Councilperson Clark stated he feels the current guidelines are appropriate for what the city needs to do. Councilperson Clark stated he agrees with the buildable section of the policy, but not the unbuildable section of the policy. The city needs to get rid of these little pieces of property at public hearings, which allows other citizens to submit a bid. Mayor Hurley stated the discussion is to send a signal to the citizens that we are trying to make a strike for fairness. Moved by Welper, seconded by Gunderson that the proposed Sale of Property Policy be forwarded to the full council. Ayes: Six. Nays: Clark. Motion carried. With no further business before the council, it was moved by Welper, seconded by Gunderson that the meeting be adjourned at 5:24 p.m. Ayes: Seven. Motion carried. Nancy Eckert City Clerk