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HomeMy WebLinkAboutSilverstone Well Site Well 23Memo To: Mayor Come & City Coundl From: Brad Watson, P.E. CC: File, Gary Smith, PE, City Cleric RECEIVED .9U~ 3 j. 2003 City Of Meridian City Clerk 0$ce Date` 7/31/03 Re: Discussion of Silverstone Corporate Center Well Site, Well No. 23 This issue was previously discussed at the April 22, 2003 Pre-Council Meeting. It was my understanding at the condusion of that discussion that Mayor and Coundl directed Ryan Anderson of Sundance Company to come bads with more infonmation and/or a d"rfferent proposal. Attached is a copy of a letter to Mayor Come that was faxed to me on July 23, 2003. I have no further information than that A copy of the April 22 meeting minutes is attached. We have approximately $45,500 left in the Well No. 23 budget as of June 30. Thank you for your consideration. ~~ • Page 1 07/23/2003 11:10 FA% 2083227307 I^ THE SUNDANCE COMPANY Your "8nildin,G Sire rn Ktry"5'o:,~rre I~ 0 O 1 The SUYl 9100 West Black~eGr.',eclse,"ID~,H3709° ~(~3~73d0~~ F:(268)32~7307 ",' ''1 ' ''. „,., .,.j To: Brad Watson Fax: (208) 898-9551 From' Ryan Anderson ~ Date: July 23, 2003 ~~ Well Sltd Pages: 2 including cover sheet Gc: ~ urgent Q For Review ^ Please Comment ^ Please Reply ^ Please Recycle Brad, I've attached the letter sent to the Mayol's office, There was a response date of July 30"', but I'd had hoped tD hear agreemerrk to the proposal before hand. As I've had no contact it is difficult to know the status of the new discounted proposed sale. I look fonnrarcl to hearing from you, and thank you for your efforts in this matter, Ryan .lUL 2 3 2063 f~ERlQI~~ CITE EHGi[~EER rat" •_:-')1)~..~1~ ~~,ti~ :I "I1,~ 07/23/2003 11:10 FAX 2083227307 THE SUNDANCE COMPANY (~J002 June 11, 2003 Honorable Mayor Robert D. Corrie City of Meridian 33 East Idaho Ave. Meridian, ID 83642 RE: SilverStone Corporate Center We115ite Deaz Mr. Mayor and Council Members: ~~~ ~~~, 2 3 2003 RlOI~N GiT9f ~[~lN,. Thank you for taking the time to meet with me regazding the well site at SilverStone Corporate Center. Alter discussing your request with the other partners, we've agreed to a further discounted price for the well site as incentive for a cash purchase. The ageed-upon value is $98,000.00. As this is a sizable discount, I think you will agree that if is a reasonable fr8;ure. One concern the partners share however, is the timing of the paytnent. As it has been almost two years since the complefion of the well site, Sundance feels that a due date of July 30, 204)3, is fair and reasonable. On a separate note, I'd like to take this chance to thank you for the help you have provided in making SilverStone a reality. As you are aware, we are constructing more than 100,000 SF of new office this year in Meridian. This is due to the cooperation between the City of Meridian and Sundance, and I want to express our thanks for your efforts. That is also one of the reasons that SuOdance has decided to expand SilverStone with the purchase of another 80 acres to the east. Upon completion of this new phase of SilverStone, we'll have brought more than a million and a half square feet of new businesses to Meridian. This will be an excellent accomplishment, and one of which we all can be proud. Again, thank you for your interest and time, and please contact me if there are any questions. l can be reached at 322-7300. Sincerely, Sundance Investments Limited Partnership Ryan Anderson Meridian Citv Pre-Council Meeting Auril 22 2003 Item 5. Well Lot Acquisition from Sundance Development in Silverstone Subdivision by Brad Watson: Cowie: I think Brad Watson on Silverstone's here right. Okay why don't we have them next and we'll get to chamber. Watson: Thank you Mr. Mayor, Council members. I think I used a lot of your time last week and we've got some additional information this week that should make this fairly short and sweet. Will is handing out a copy of the lease agreement for the well site to you. This goes back a little over a year and a half to when this was approved by City Council. ff we look at the bottom of page one and the top of page two it is very specific in that latecomer agreement for where this well site would be developed. Perhaps the only question tonight is it seemed that last week Council. had some questions about the cost that I had brought up. As you recall we have some correspondence back and forth intimating a per square foot price of five. dollars and I think at that point you had asked me to invite Ryan Anderson to come speak or answer some questions if you had any. There are a few legal questions here that probably need addressed but I can probably do that outside of this meeting, that talk about receipts of deeds and preliminary title reports and that sort of thing. So with that if you have any questions for me I'd be happy to answer those. Mr. Anderson is here as well. Bird: Mr. Mayor Cowie: Mr. Bird Bird: (Inaudible) reading through this but we still are at five dollars a square foot for the purchase price. Watson: Councilman Bird that is correct. That is the Sundance Company's understanding and evidently at some point in time, February of 2002, there evidently was another conversation at a pre construction meeting talking about that and this memo was cc'd to me at the time too. So. Bird: Is Ryan or the Sundance Company wiling to discount a little for cash? Has anybody talked to Ryan or Roger - (End of side one) Watson: -- to them at all about that and Ryan is definitely here if you would like to address that to him. Meridian City Pre-Council Meeting April 22, 2003 Page 2 of 2 Anderson: Good evening. Cowie: Name and address please. Anderson: Ryan Anderson with the Sundance Company. I live at 1453 Shellbrook Drive here in Meridian. In answer to Mr. Birds question. We can certainly take a look at it. We have done a discounted price and we came up with the five dollars. At this point we feel that the price is fair and better as an example we are going through several purchases now and they have been running between seven and a half dollars and about twelve dollars. Our ACHD agreements with them are also about the seven dollars for the same area. Bird: But I think Ryan our biggest concern on the Council is we don't like these latecomer development agreements. They are a nightmare for our bookkeeping and I for one would just like to get a purchase price and if you know - if you can discount some for cash up front we certainly appreciate it and get the thing taken care of and forget about the latecomer agreement. Anderson: We talked with Bruce about. He wanted to know if there were a couple of other options that certainly direct reimbursements certainly in our best interest as well. Bird: And I think just in the best interest of the city not to get into a latecomer fee on a well lot myself personally. That's my - Anderson: Okay. Nary: Mr. Mayor. Cowie: Mr. Nary. Nary: And is that five dollars per square foot, is that the pre development cost? Anderson: That was the number we came up when we went through both the lease agreement and speaking with Bruce and Brad coming up with a number that was fair to all parties and discounted to the city to give that much more (inaudible) deal accomplished and complete. De Weerd: Mr. Mayor. Cowie: Yes. Mrs. de Weerd. De Weerd: 1 guess I go back to what do we traditionally do? You know why are we finding ourselves. I know we do this with the sewer but not with the water. Is this one of the few that the lot hasn't been donated as part of the development. Meridian City Pre-Council Meeting April 22, 2003 Page 3 of 3 Corrie: Brad. Watson: Mr. Mayor and Council member De Weerd. It's the only one that has never been donated and when this project came to town there were numerous and buried conversations about a variety of things and I'm sure this was one of them. They needed the well there to provide fire flow to their buildings. But directly answering your question this is the only one that has never been donated. But we approved the lease so. De Weerd: Well the lease is something different than a purchase. Watson: If I may explain that a little bit. The process that we go through before the plat is actually recorded we can't acquire title to that lot but we need to begin drilling and constructing the well prior to recording of the plat so we put together these lease agreements to get us by until the time we could legally acquire title to that property and that's the purpose of all these leases that you see. De Weerd: And okay, well I guess the lesson learned here is we can't help out the developer in advance anymore until we know what the price we are going to be charged and I guess my question and maybe that's why you were asked to be here is why we are paying above raw land prices on the lot, five dollars a square foot that's a lot of money. Anderson: It actually is a discounted rate for that corner De Weerd: But we are not going to operate a business. You know this is to serve your development this is to provide city services out there. When I look at paying those kinds of prices it would be if we were an enterprise trying to make money and what we are doing is trying to provide a service so you can market your development and we can give it good service. And so I just think this is something different. It's certainly setting a precedence at I hope other developers don't follow in the footsteps of this because it will cost our citizens and our community huge amounts and I guess I'm just looking at the bottom line as I'm sure you are doing but this is something that is serving your development and I don't know where five dollars a square foot is a fair price for providing service to your development. Corrie: What does this five dollars a square foot, what does it come out too. Bird: 105,000. Corrie: 105,000. This may sound like a stupid question but what if we don't buy it? And we don't continue to lease. Bird: How can you have a well without buying it? Meridian City Pre-Council Meeting April 22, 2003 Page 4 of 4 Corrie: Well I mean why should we pay for their water. De Weerd: We have to. Bird: When we annexed it and stuff we stayed in our ordinance that we will furnish water and sewer out to them. I think that this has went on a little different then 90 percent of it has Mayor but I don't think you can go back or do this. This project is certainly bringing a lot more, money into us then the cost of this well lot. Corrie: Are we going to do this for Winston? Bird: I would hope not but you know I don't know how you guys are but I might get beat up once but I'm not going to get beat up the second time. I'll pay more attention. And we were in quite a hustle here and in respect to these developers they've always been very, very fair to the City of Meridian. I question the five dollars too but I'm not out there, it's not my money out there being spent. You know until we take our money out of our wallets and walk down and start something through here then we don't know what the real costs are and I've never done it so I don't know. I just would like to get this solved. I don't like the latecomer agreement. I'd like to get it purchased and walk on and say we got a black eye on this one but won't get us again. Won't get this guy again. Nary: Mr. Mayor. Corrie: Mr. Nary. Nary: Yeah I think unfortunately you know this is something we can't really ring the bell from a year and a half ago you know. That should have been the discussion a year and a half ago when probably what wasn't said was we are not annexing that property unless we have a well site because we are not going to be able to do it. We have to provide the water necessary for that type of development without a well site there and if they don't want to give it to us then they'll have to wait until we can afford to do it. And we can't make them give us this property but certainly not being able to develop at that time based on our needs really should have been the discussion maybe that was I don't know. I don't know what was really discussed at that time but that's probably what should have been done but I think we are kind of stuck I think the decision is whether or not that five dollars is appropriate but again I'm like councilman Bird. I don't know it sounds like there was that level of discussion with Public Works and that five dollars was found to be a reasonable amount of money, is that fair Brad (inaudible)? Watson: Mayor, Council members. Councilman Nary there is a memo to us I don't think there is anything written ever coming from us. Evidently there was a conversation at a precon that I don't recollect. Meridian City Pre-Council Meeting April 22, 2003 Page 5 of 5 Nary: Pre development costs to me sounds like what you pay for that's what pre development sounds like to me. Whatever you pay for it is what we would pay for it but 1 don't know if that was five dollars a square foot or not but that's what that means to me. That may not be what it means to everybody else up here but if I had read this then that's the way I would've read it is whatever you pay for it not. So there wouldn't really be a need to negotiate that. You tell us what you paid for it and we pay for it. But I don't think we do this much because I think we have that discussion up front now whether or not we are going to expend the city's funds to get water service there at this time and if you want it there faster your going to have to help pay for the cost and I think that's the discussion we had with Mr. Moore with their development. Bird: I think Mr. Moore and Mr. Anderson have worked out an agreement between their two properties and water and stuff if I remember right. Nary: But it sounds like we kind of put our own stuff behind the eight ball. So its not really something the developer really needs to (inaudible) of but I guess that's the only issue to me is whether that is a reasonable price and the way I read that that's what that meant to me. Now I don't know if it means that to anybody else. And I don't know what that five dollars is, is that what you paid for it? Anderson: Well the five dollars is pretty close between our development costs and the land purchase price. Yes. Nary: What do you mean its pretty close to the development costs and the land purchase price? Anderson: The land purchase price its over the 80 acres and it was done in three different parcels. So we've got that cost (inaudible) develop it and bring it to the point where it's usable. Nary: But this is for pre development so that cost isn't a factor. So the only cost is what it costs you to buy this piece? So what this piece costs you was what at least the way I would interpret this to me. So it doesn't matter what the development costs is. It only matters what you paid for it, is what it appears to be contemplated by this agreement. And is it five dollars a square foot? Bird: Mr. Mayor. Corrie: Mr. Bird. Bird: I think what Mr. Andersons trying to say is they probably before they ever get a penny out when they buy those 80 acres or 120 or whatever they bought out there. They probably got pretty close to a million dollars sitting out there of their own money in development. Getting roads in getting curb and gutters and all that kind of stuff and that's part of your development cost. But you have to put Meridian City Pre-Council Meeting April 22, 2003 Page 6 of 6 in the price of the land. He's telling us that it is going about seven and a half to eight dollars a square foot now - Anderson: That is correct. Bird: -and that's probably the going rate around that area. So I actually I'm like you Mr. Nary I don't like the five dollars either but that was something that should've been discussed a year and a half ago and when you don't kick the guy in the teeth then its our fault. Nary: Mr. Mayor Corrie: Mr. Nary Nary: And I agree. I agree with what you are saying. All I'm saying is in reading this agreement it says the lessee, which is the city, agrees to cancel the lease complete a latecomer fee agreement and what we are saying is we don't want to do that we just want to buy it, to include the pre development cost of the lot. That is not to pay for the road and not to pay for the infrastructure or any of those things. So it really is to pay for what that cost of the ground was for this piece and you can certainly tell how much you paid for the whole piece so you can tell how much the ground for this piece was and that's where I don't know and what you are saying is you negotiated this five dollars. And I think like Council member De Weerd said is I'm not saying we should pay you but I'm saying need to know it's the right price and its fair and to me there isn't need to be a big negotiation for that. You know how much you paid for it that's how much we are supposed to pay you is what you paid for it not what it cost you to do anything else. So that's all I'm asking is, is that what you paid for it is five dollars a square foot and I recognize you bought 80 acres at once but you can certainly figure out the square foot price whether or not how big a piece you bought. Anderson: But you need to take in account which portion of that land gets which portion of the costs of the property. If its over eight acres the back corner is definitely less valuable then the front corner which is what you guys have got. So you've also got to take that into account and how to come up with the (inaudible) is why we've got the five dollar cost that we went through with Bruce and Brad when we talked about it originally about a year and a half ago. Nary: Maybe that's the discussion that needs to be had if we ever have this again because I don't agree with that. I think that means to me and again I wasn't here but that means to me what it costs you to buy that ground. Not what it's worth to me in the front or the back or the middle or the side or whatever. Its what it costs you to buy that ground because the taxpayers are providing you with services at a give and take here. You are getting something also for it and you can't use that ground for anything else because it-has got a well on it now. So its not like you have developable ground now so that's what 1 think this was Meridian City Pre-Council Meeting April 22, 2003 Page 7 of 7 supposed to mean to me is what you pay for it not where it is or any of those other things so that's really a pretty simple number and again I'm not hearing that. That's my problem in saying okay to pay it is I'm not comfortable with that five dollars matches with what we agreed to. De Weerd: Mr. Mayor. Corrie: Mrs. de Weerd. De Weerd: I guess we've learned a lesson on this and this development is certainly a wondertul asset to our community. So don't get me wrong on being particular about this. You definitely are an asset to our community and we appreciate you being there. This is unusual we have never done it before and I see that we need to have a lesson learned. We tried and I know our staff tried to expedite the process and unfortunately I think when we start expediting processes we see some of these things can fall through the cracks and that's something we need to team a lesson on but my point is I would hope that you can be fair in what you are asking. A municipality that is providing a service that you certainly benefit your development and certainly we are supposed to provide that but we don't like to see a profit made or cost covered at the expense of our tax payers (inaudible). And that's what we are trying to do is to be fair to all of them. Corrie: I think Ryan, one of the questions was can you do a something with cash out front on the whole thing. You. need some time to talk to the people and see if they can. If they can that's great if they won't we will do what we have to do. So you can go back and find out if we can do anything with the cash up front and just pay it off (inaudible) less. If you say no then that's just going to be the way it has to be. Anderson: Okay. Corrie: So if you could do that, if that agrees with Council. That was Mr. Birds thought that might be able to help. So if you could want to do that and we can put you back on and tell us what it is and we'll go from there. Anderson: Okay. We can certainly do that. Corrie: Thank you for your time. Appreciate it. Anderson: Thank you.