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Cambridge buys RTC property, contingent upon City Attorney's review

Posted Online: 11/19/02

By Rachel Weddig

Cambridge City Council members voted unanimously to enter into a contract to purchase the former Regional Treatment Center for future development. The purchase price is $634,200.

During the council meeting, Monday, Nov. 18, City Administrator Gordon Heitke, explained the state set a purchasing deadline of Nov. 26 for the city.

"If we would decide to enter into a contract for a deed . . . it would be prudent to have some form of a motion saying the mayor and city administrator could enter into a contract for a deed, with contingencies from the city attorney," Heitke said. "This general motion should satisfy their deadline."

City Attorney Charlie LeFevere indicated he needs more time to study the contract before any final signatures are signed. Therefore, in the motion, council members directed city staff to enter into a contract to purchase the RTC property, contingent upon the city attorney's review and contingencies.

During previous council meetings and work sessions, the city has looked at several different options to fund the property, such as tax increment financing and tax abatement general obligation bonds.

The largest expense for the city will be the demolition and removal of the old brick buildings which contain a lot of asbestos. Ashley Engineering has estimated the cost to remove asbestos on the RTC property at $283,000.

During an earlier Economic Development Authority meeting, council members directed city staff to apply for federal EPA Brownfields Cleanup Grant funds to remove the asbestos, which was contingent upon the council's decision to purchase the property.

Through the grant, the city many receive up to $200,000 in grant funds for the program, with the city providing a 20 percent match of the total project cost, $56,600.

Also, during a work session prior to the city council meeting, Heitke made it clear the city has been studying and analyzing the costs to purchase the property, without receiving any grants.

"We haven't considered any grants in our financial analysis," Heitke said. "If they come in that's even better, but we didn't consider them in our financial considerations."

Heitke also noted if the city does buy the RTC property, the state won't put any restrictions on the land.

"If the city does this, they [the state of Minnesota} will be comfortable; they feel comfortable that we will do what is in the best interest of the city," Heitke said. "If a private developer buys it, they will make sure the buildings won't sit there for a long period of time."

With the purchase of the RTC property which is approximately 88 acres, the city is purchasing all the eight different sections of the property.

In the city's long range plan for the property, they are looking at developing a community center and senior living units.

Robert Nelson, who has lived in Cambridge since 1989, spoke to the council in support of purchasing the RTC property.

"I highly support the purchase of the RTC property; we need the development," Nelson said. "This is something you can't get again inside city limits. We need it for the community center. We know the demolition costs can be excessive, but it doesn't have to be done all at once."

Area six of the RTC property is 4.6 acres and is located in the southwest portion of the redevelopment. Currently, the Oakview building, a 50,916 square foot building, exists on the site.

During the work session, council members said Isanti County has expressed an interest in purchasing this property, but nothing has been finalized. The land value of the property is $250,000.

"We don't have any formal action on this and probably won't until we have made a purchase agreement," Heitke said. "The building is certainly a value to them. We expect they would want to rehabilitate the building and use it for public offices."

The city has to provide with their contract for deed a down payment of $63,420, with the balance of $570,780 to be paid in five equal annual installments with a two percent interest rate on the unpaid balance. Payments would begin June 1, 2004.

In other action the council:

-- approved the preliminary and final plat for Royal Court Condominiums.

-- approved an amendment to the city's ordinance to allow for the sale of Sunday liquor.

-- heard testimony from many residents regarding the proposed 2003 street improvements and the assessments from the 2002 street improvements.