[ Council Communication ]

Council Communication

Title:	Lithia Springs Property
Dept:	Administration
Date:	February 18, 2003
Submitted By:	Brian Almquist, Interim City Administrator

Synopsis:	Late last year, staff was directed to provide additional information to determine whether there are any impediments to offering all or part of the Lithia Springs property for sale. The specific requests were to: 1. Look into the terms of the lease with the Ashland Park & Recreation Commission and the sublease with the Ashland Gun Club, to determine whether either lease can be canceled before its expiration in 2009 without legal problems; 2. Determine how much of the property would need to be retained to protect the wells comprising Lithia Springs and other historic structures; and, 3. Investigate the environmental effects, if any, of lead accumulation on the property leased to the Ashland Gun Club.
Background:	The Lithia Springs property was acquired around 1914 when the people of Ashland passed a $225,000 bond issue to pipe the water to town. Initially, it was piped to Lithia Park, the railroad station, Carnegie Library, the Plaza, and several hotels. About this same time, a local firm received permission to bottle the Lithia water and sold it as "table water" as far north as Portland. During the 1950s, another company manufactured dry ice from the excess CO2, and sold it to fruit and produce shippers on the west coast. There are a number of wells scattered around the property, since after many years of pumping the Lithia water turns fresh and a new well must be drilled. Beginning in 1936, the City Council leased the land to the Ashland Park Commission for recreational use. Over the years several activities have occurred there including archery, go-carts, motocross, and more recently, by the Ashland Gun Club. The current lease between the City and the Parks & Recreation Commission, and a sublease to the Ashland Gun Club, runs through 2009, and both have no provision for cancellation at an earlier date. The following is in response to the three questions asked of staff by the City Council: 1. Legal Barriers: The Ashland Parks & Recreation Commission has subleased the property to the Ashland Gun Club through May 30, 2009 in order to allow the club to amortize the substantial improvements they have made to the site including concrete bunkers, targets, target shields, a club building, parking lot, etc. If the lease were terminated prior to that date, I would expect that the Gun Club could demand a capital reimbursement, plus damages, for the remainder of the 15-year lease. 2. Protection of the Wells: This question is more complex, in that wells have been drilled on various parts of the property. Any encroachment by new homes would probably require septic tanks and drain fields, in addition to new fresh water wells for water supply. Either would threaten both water quality and quantity of the Lithia source. There is also a question of what effect sales of part of the land would have on the historic values on the property. Native Americans are known to have camped near the springs which were thought to have medicinal properties, before the arrival of the settlers around 1850. 3. Lead Accumulations: A number of years ago, the Gun Club installed concrete bunkers so that the lead accumulation would be contained and reclaimed. As a result, I do not believe this a problem with the site. In order to be absolutely certain, we would need to employ an environmental consultant to do a complete site analysis. I believe the results would not show lead contamination, and would be very costly.
Recommendation:	It is recommended that due to the legal barriers, Lithia water quality issues, and the historic nature of the property, that this property be retained in public ownership for the foreseeable future.
Fiscal.Impact:	Should the City Council decide to sell the property, staff is unable to access the possible claim for damages resulting from an early termination of the lease with the Ashland Gun Club. In addition, it is estimated the cost of an environmental consultant would be about $3,000.

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