City lands more property

Published 7:53 am Wednesday, September 3, 2008

The city of Austin has succeeded in another property acquisition for the jail and justice center, purchasing a corner lot from Austin Medical Center through a package that includes cash, industrial property, relocation expenses and free utility upgrades.

Worth about $455,900, it will provide Austin Medical Center with $300,000 in cash, two acres of property for development at the Cook Farm Industrial site off Highway 218 North, $26,400 in rental assistance and an estimated $39,500 in utility infrastructure to the industrial property as development occurs.

The package remained unchanged from a proposal made earlier this month as city staff and consultant Yaggy Colby negotiated a settlement for an existing structure and parking lot on the corner of Second Avenue and Second Street Northeast.

The city council unanimously approved Tuesday, as needed, a land transfer for the Cook Farm site from the Port Authority to the city, thereby securing the agreement. The Port Authority authorized the transfer the week before.

With an option of first right-of-refusal for 2.19 acres immediately to the north, AMC will first build a 10,000-square-foot warehouse to hold office supplies, records and furniture, and may expand its office space at the two adjacent acres in the future.

The city has agreed to provide appropriate utilities, including roads, water and sewer, to the area for free, and Craig Hoium, community development director, added that staff will seek grants to cover the majority of costs, as they have in years past.

In the interim, the hospital will use a Mapleview facility for storage, Hoium said.

Though both voted yes, Dick Pacholl, 2nd Ward, and John Martin, 3rd Ward, qualified their affirmations with concerns about the purchase price. Pacholl pointed out that the package was worth $5,900 more than the property’s $450,000 appraisal.

Hoium and city attorney David Hoversten said the estimated value did not include assumed relocation costs, which can top $50,000 for commercial businesses, or the costs associated with comparable facilities, as required by law.

City engineer Jon Erichson added that the use of Cook Farm property in the deal also satisfied local goals to bring more business to the industrial site.

“People aren’t really breaking our doors down trying to pay that $45,000 an acre,” he said.

Martin said his concerns reflected an alleged statement by an AMC executive, who said the city may receive the downtown property at little to no cost.

“Why did we not pursue that then?” he asked, adding, “Because then we would be saving $450,000.”

With the close of this property, only three remain unsettled on the two affected blocks: Anytime Fitness on Fourth Avenue Northeast; Steve’s Pizza on Second Avenue Northeast; and an apartment and commercial building on the corner of Third Avenue and Second Street Northeast.

Hoium couldn’t provide an update on negotiations, only saying that he has been pleased at the pace of acquisitions so far.

The city is contracted to complete all site preparation for the $32 million jail and justice center, slated for construction next year. Staff officials have already sent notices to the all remaining properties to move the matter to court, which may result in seizure and new appraisals, if needed.

Hoium and Yaggy Colby consultants have said that negotiations will continue until hearings this fall.