Tuesday, July 5, 2011
INDEPENDENCE -- The city of Independence has offered $875,000 to buy 62.5 acres of farmland it has slated for a sports field complex at the northeastern edge of town.
The move was prompted by a recent bankruptcy declaration by the property owners, Olsen Agriculture, and unclear expectations on an original land acquisition proposal between the two sides, said City Manager David Clyne.
City Council unanimously voted to seek a deal with the company last week, offering $500,000 due at closing and $375,000 payable over five years.
Olsen Agriculture agreed to essential terms, but a purchase hinges on federal court approval.
"The Olsen family has shown a lot of class on how they dealt with this to help them meet their and our needs," Clyne said.
Olsen Agriculture filed for Chapter 11 bankruptcy on June 1.
Independence has worked with the firm since 2007 on an agreement that entailed the city making a portion of the company's 62.5 acres suitable for them to commercially develop.
In exchange, Independence would have received 50 acres of farmland off Highway 51 to establish soccer and baseball fields and a new boat launch along the Willamette River.
The National Guard has visited the site during the past few summers and donated labor, with soldiers grading and redistributing dirt for the project. The Guard just wrapped up their final stint there last week.
An outright purchase was necessary, as the original agreement for the land swap was unclear in areas for both parties, Clyne said. He declined to discuss specific details, though offered that some objectives could have been cost prohibitive for the city.
The bankruptcy proceedings also played a role, he said.
Independence has spent $500,000 on the project to date. In-kind labor from the Guard, meanwhile, probably amounts to seven figures. And the city was due to receive state funds for a new boat ramp.
"When you go into bankruptcy, assets get put into a big pool," Clyne said. "Everybody with an interest looks for their share.
"To us, it made no sense to walk away from it at this time, given how much money and goodwill all sides have put in. We're committed to the project."
A land purchase might seem curious considering the city's own finances. Independence has been grappling with budget issues during the last two years and recently eliminated 20 percent of its staffing.
But a deal wouldn't worsen the city's economic health, per se, Clyne said. Independence had earmarked transportation system development charges (SDCs) to pay for paving of the upper portion of the land and road improvements that may included sidewalks, planters and gutters.
"We're cutting back on the road work for this deal and will use the balance to pay for the property," Clyne said. "We were already obligated to use this money."
The city would also seek to sell the upper 12.5 acres.
"We expect to recoup the majority of our investment through a resale of that," Clyne said.
Clyne said the city will be able to work on the project at its own pace and on certain components as funding allows. Seeding for the soccer fields will probably happen this fall.