MINUTES FOR THE STUDY SESSION
ASHLAND CITY COUNCIL
Tuesday, May 4, 2005 at 1:45 p.m.
Council Chambers, 1175 East Main Street
CALL TO ORDER:
Mayor Morrison called the Study Session to order at 1:45 p.m. in the Civic Center Council Chambers.
Councilor Amarotico, Jackson and Silbiger were present. Councilor Hartzell and Hardesty were absent.
City Administrator Gino Grimaldi removed himself from the meeting due to direct conflict of interest.
1. Status of Planning for Reconstruction of Fire Station No. 2
Fire Chief Keith Woodley explained the variables that go into locating a sight for the fire station, which include: response times, safety in terms of egress and ingress and compatibility in terms of zoning regulations.
Mr. Woodley noted the two response areas for the City of Ashland and stated that the dividing line between those areas is Mountain Avenue, however it was noted that it is beneficial to have a slight overlap between the two. He stated that a suitable site for the fire station would be on the Ashland Street corridor between Walker and Tolman Creek Road.
Mr. Woodley clarified for Council that the current response times are four minutes for emergency medical services and five minutes for fire.
Rick Harris of Coldwell Banker Pro West Real Estate stated that they looked at thirteen different sites within the corridor and evaluated them on a number of criteria. After the initial evaluation, properties were tested to determine response times, which narrowed the list of possible locations down to seven. Mr. Harris explained that the seven property owners were contacted to determine if they would be interested in selling their property. He noted that this was done blindly without the owner knowing who the buyer would be in order to determine general interest without bias. Only one of the seven property owners was interested in selling, and this property is currently listed on the market, but it is at a much higher than market price. One of the other property owners was not interested in selling, but raised possibility of a ground lease.
Mr. Harris explained that a ground lease works much like a commercial lease, in that you have a series of conditions between the two parties, a value for the underlying ground is identified and a price is negotiated per square foot. It was noted that a typical ground leases are on a 25-35 year basis, with the possibility of extension. Mr. Harris stated that the purchase price for an acre of property along the identified corridor ranges from $850,000 - $1,100,000, and explained that a ground lease price would range from $.05 - $.08 per square foot per month which works out to $2,100 - $3,032 per month. Amortized over time, the City would get roughly 25 to 30 years worth of use compared to an outright purchase at today's rates.
Mr. Harris stated that according to the Fire Chief, the usable life of a fire station is approximately 30 years. He also cited several examples of other government entities that have leased sites.
Mr. Woodley stated that the issue of funding had been addressed in the memo provided by the Finance Director. He also clarified that the City's Capital Improvement Plan forecasted a November 2006 bond election, however the documents generated for this meeting proposed a November 2005 election. Mr. Woodley noted that if the Council decided to move forward with Staff's recommendation, they would need to have a decision made by September 1st, 2005 in order to have this issue placed on the 2005 ballot.
Mr. Woodley commented on the $450,000 that had been set aside as seed money for the new fire station, and explained that this money was used for the construction of Fire Station #1. He stated that the bond levy for the first station was passed back in November of 1999; however the construction was not completed until August of 2003. Due to inflation and a somewhat protracted legal process over acquisition of the Blue Mountain property, the final cost for Fire Station #1 came in higher than anticipated. As a result, they are essentially starting from scratch with the new station.
Mr. Woodley clarified that the new fire station would have four bay stations and would accommodate the acquisition of additional ambulances.
Mr. Harris clarified his role and stated that he was hired by the City and only represents the City. He stated he has no financial interest in any of the properties and stated that his job was to represent the City's interest and identify viable sites, and, if contracted to do so, negotiate on behalf of the City.
Opinion was expressed that the City should be cautious and it was questioned what would happen if the fire station needed to sit at this location for 50 years. Mr. Harris clarified that usually a lease starts with an initial 25 year term and includes the option for two, five year extension, which brings it up to 35 years. He added that when he approached the property owner, he had indicated that it was likely that lease would be requested to be for 50 years, and the property owner was open to this idea. He noted that the initial term might remain the same, but the length of the extensions are completely negotiable. Mr. Harris clarified that the reason they have brought this possibility forward, is that it is one of the few options available at this time.
Mr. Woodley noted the property where the fire station is currently located could be of interest to the Parks Department of they could certainly put it on the market.
City Attorney Mike Franell clarified that they could pass a bond levy for the construction of the fire station itself, but as far as the lease of the ground, that would need to be handled through an operational levy.
ADJOURNED: Meeting adjourned at 2:08 p.m.
Barbara Christensen, City Recorder