Preston council, EDA meet to discuss
possible land acquisition, site cleanup
Wednesday, September 25, 2013 4:28 AM
As scheduled at its Sept. 16 regular meeting, the Preston City Council held a joint meeting with the Preston Economic Development Authority (EDA) on Monday, Sept. 23, to discuss the city's actions toward the dilapidated Preston Oil Products, Inc., property and Leslie Hellickson estate.
The Preston City Council and EDA met on Monday evening and the conversation centered on acquiring the Preston Oil Products, Inc., property, shown here, at the corner of St. Paul and Mill streets. Two adjacent parcels are also a part of the Leslie Hellickson estate. The city discussed how best to minimize its liability should the site prove to be contaminated. ANTON ADAMEK/REPUBLICAN-LEADER
The city had previously expressed interest in having the property demolished and cleaned up, which would include possible removal of several underground fuel tanks. The EDA has also been interested in the properties located at the corner of St. Paul Street and Mill Street for future redevelopment purposes. The property is made up of three parcels of which the city had previously only pursued two, those without the underground tanks. In the Sept. 23 meeting, EDA Director Cathy Enerson explained that the three parcels would remain together.
Further, clarified information on cost and cleanup was shared during the recent joint meeting. City attorney Dwight Luhmann also noted that the city had already negotiated an option which would eliminate its liability and potential taxpayers' dollars if the council chose to exercise it. The option had been purchased for one dollar.
What the city does with the option presented at the council meeting is predicated on whether or not a Minnesota Pollution Control Agency Petroleum Remediation Program grant is awarded to pay for the cost of removing the fuel tanks.
If the grant is not awarded, the city will be required to pay at least $19,000 and up to $21,200 for the tank removal. However, that cost will also go toward the purchase of the properties, which the city would then own and be able to redevelop.
The option, Luhmann explained, also takes away the city's liability if the area is discovered to be contaminated from leaked fuel. Since the city wouldn't own the property until after the removal of the tanks, any risk of contamination could be left to the state and not assumed by the city.
The grant is only available for sites with tanks that have been abandoned before 1988. The city has been unable, through compiled records, to find when the POP was abandoned. Council members Robert Maust and David Collett were specifically concerned about the possibility the city would have to spend at least $19,000 to remove the tanks if the city enters the option with the Hellicksons, who might not receive the petrol grant concerned.
Collett pointed out that if the tanks were removed and paid for by the state, the property value and subsequent sale price to the city would increase.
Both Enerson and Luhmann replied that the cost to the city would remain very similar in either situation. If the state paid for the tank removal, the property price would go up. If the state didn't pay for the tank removal, the property price would stay where it currently is, at roughly $4,500 for the three parcels.
The potentially $25,701 price tag results also from implementing a Response Action Plan, 10 percent of which the state will cost-share with the city. The city had budgeted $29,000 for the tank removal, contaminate testing and purchase of the properties.
Enerson said approximately 10 percent of all similar properties with fuel tanks have further contamination issues to be dealt with. However, the city would still have the option of leaving the property to the state and not being liable for any contamination abatement costs.
Maust asked why the city just couldn't purchase the property outright for cheaper and then see if they qualify for the grant themselves.
Enerson and Luhmann reiterated that the issue at hand was eliminating the city's liability with the property and that exercising the option would allow them that freedom. It is thought that there are four tanks located underground.
Mayor Kurt Reicks stressed the property has been an eyesore for too long and the city needs to act.
Maust asked why the city couldn't leave the property to go back to the state for unfiled taxes.
Enerson said other examples show the property could end up sitting there for another decade without any cleanup taking place. She also pointed out that if contamination has taken place already, it poses a threat to public drinking water.
Maust suggested the city leave the property cleanup and tank removal to the owners.
EDA committee member Jo Szuch said the city would then run the risk of the owners choosing to sell the property to someone else.
Luhmann stated he thought the city put value in getting the tanks removed.
Maust suggested the city pay the $12,380 to demolish everything above ground in order to make the property look more presentable prior to finding out if the owners will get the petrol grant.
Enerson said further digging might worsen a contamination problem if not directly addressed.
Reicks agreed saying the property and possible contamination would be exposed more to runoff.
After more back and forth discussion and even more reiteration of the issue at hand, councilman Charles Sparks made a motion to buy the three parcels for $4,500. The council approved the motion.
Sparks followed that up by making a new motion to enter into the dollar option with the Hellicksons that would include the $19,000 for tank removal and purchase price at $2,200 should the owners not receive the petrol grant. The motion passed three to one with Maust voting against the motion.
City administrator Joe Hoffman stated he felt the current unknown variable of the petrol grant had caused a lot of confusion in the meeting.
The joint meeting of the EDA and Preston City Council ended and the EDA continued with their meeting after a nearly two-hour discussion on the POP site.