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CONTRACT K-2021-15: A CONTRACT BY AND BETWEEN THE NORMAN UTILITIES AUTHORITY, NORMAN MUNICIPAL AUTHORITY, CITY OF NORMAN, AND HIDALGO TRADING, L.L.C., IN THE AMOUNT OF $388,500 FOR THE PURCHASE OF REAL PROPERTY LOCATED AT 333 BRATCHER-MINER ROAD PLUS CLOSING COSTS TO BE DETERMINED PRIOR TO CLOSING FOR THE WATER RECLAMATION FACILITY AND SANITATION FACILITIES AND GRANT OF EASEMENT E-2021-1 TO HIDALGO TRADING, L.L.C.
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BACKGROUND: The City/Norman Utilities Authority (NUA) currently owns the majority of the area along Bratcher-Miner Road, generally south of Highway 9 between Chautauqua Avenue and Jenkins Avenue for various City operations and functions. For the Utilities Department, operations and facilities in this area include:
- Water Reclamation Facility (WRF) - West of Jenkins and North of Bratcher-Miner Road;
- Transfer Station - East of Chautauqua and North of Bratcher-Miner Road; and
- Compost Facility - South of Bratcher-Miner Road between Chautauqua Avenue and Jenkins Avenue.
Future facilities within this general area will be the Household Hazardous Waste Facility located on the Transfer Station Site and also future advanced treatment processes at the WRF as required to implement water reuse.
DISCUSSION: The property owned by Hidalgo Trading, LLC, located at 333 Bratcher-Miner Road, is approximately 20.62 acres of land located adjacent to several Utilities Department facilities. With planned future facilities and the potential need for the existing facilities to expand to meet future growth, this property is ideally situated.
The property was advertised for sale in late 2019 and City/NUA staff approached the owner regarding the potential purchase of the property. The City/NUA hired Artman Appraisal Company to complete an appraisal report to determine the fair market value for the property. The appraisal report was completed and issued on March 5, 2020. The valuation of the 20.62 acres was determined to be $404,000.
During negotiations, the current owner requested the capability to contract with a 3rd party for the potential future installation of the cell tower facility. As such, a portion of the 20.62 acres was identified for the conveyance of an easement to Hidalgo Trading, LLC, for right of way and access to construct and maintain a cell tower, or sublet for that purpose, the property for with a cell phone tower up to 120 feet in height. However, this action does not authorize the installation or waive compliance with any other City ordinances requirements regarding cell towers. The portion identified for the easement totals approximately 0.79 acres. Utilizing the cost per acre value determined within the appraisal report as a valuation for the easement, the modified fair market value of the property and proposed purchase price is $388,500.
Funding for the purchase will be from Water Reclamation Facility (WRF) funds for 30 percent and Sanitation Fund will fund the remaining 70 percent. From the WRF Fund, funding will be from the WRF: Land Purchase (account Org 32999911 - Object 46001; project WW0170) in the amount of $116,550. This account has an available balance of $340,000. From the Sanitation Fund, funding will be from the Compost Land Purchase (account - Org 33999975 - Object 46001; Project SA0020) in the amount of $271,950. This account has an available balance of $350,000.
RECOMMENDATION No. 1: Staff recommends NUA/Council approval of the Purchase Agreement (and Easement included in its Schedule B) with Hidalgo Trading, LLC, for the property located at 333 Bratcher-Miner Road, in the amount of $388,500 plus closing costs to be determined prior to closing.
RECOMMENDATION No. 2: Staff recommends that the NUA/Council authorize the NUA General Manager/City Manager to execute all closing documents, including the Easement included in Schedule B to the Purchase Agreement, for the purchase of the property located at 333 Bratcher-Miner Road.