8.1 SR 07-01-2013 City of
EW REQUEST FOR ACTION
River
TO ITEM NUMBER
Mayor and City Council 8.1
AGENDA SECTION MEETING DATE PREPARED BY
General Business July 1, 2013 Michael Hecker, Parks and Recreation
Director
ITEM DESCRIPTION REVIEWED By
Houlton Farm Property Letter of Intent Cal Portner, City Administrator
REVIEWED BY
ACTION REQUESTED
Approve by motion the letter of intent for the Houlton farm property.
BACKGROUND/DISCUSSION
At the May 13, 2013,work session, the City Council was informed of a proposal by The Conservation
Fund to acquire the Houlton farm property. Steve Hobbs,from The Conservation Fund, explained that
there is a high likelihood that property could be fully funded through grant funds distributed from the
Minnesota's Legacy Fund, the Minnesota DNR,The Minnesota Land Trust, and Friends of the
Mississippi. The Conservation Fund would serve as the technical advisor to acquire funding and pre-
purchase pending full repayment from grants. He indicated that the city would not be obligated to pay
any acquisition costs. A Letter of Intent outlining respective responsibilities is required by The
Conservation Fund in order to proceed. The attached letter was reviewed by the city attorney.
The Letter oflntentis not a contract between the city and the Conservation Fund. It outlines
responsibilities and requests that upon a successful property acquisition with grant funding, the grant
funds would reimburse The Conservation Fund for the real property cost. The city would be listed as a
responsible party because only public entities may receive these particular grants.
The letter only excludes the city from costs pertaining property acquisition. Ongoing park maintenance,
operations, security,insurance and infrastructure costs would still be the responsibility of the city,
including the farmstead home and outbuildings. Staff would continue to work with The Conservation
Fund and other partners to identify funding for trails, signage,parking,restoration and the planning /
maintenance of the property. Additional potential costs include restoring the 165 acres of farmland to
native grasslands. The transition to natives would occur over the course of several years.
The city building official inspected the farmhouse and outbuildings. The ranch-style house, constructed
in 1959, has an unfinished basement and is deemed in good condition. Minor modifications would need
to be made if the city were to use the house as a rental. All but two of the outbuildings/barns are in good
repair. Again, there may be limited funds available through the Legacy process for structures if used to
further the visitor experience. One barn in poor condition is potentially of historical significance might
be kept if restoration funding is available. The end result might be to demolish the buildings.
POWERED By
N:APublic Bodies\Agenda Packets\7-01-2013\Final\x8.1 sr letter of intent for Houlton.docx INAMIRE1
In May, the Council requested information regarding the potential city costs of ownership. City costs are
dependent upon the requirements associated with the grant funding. Potential costs include public access
to the Elk and Mississippi Rivers as well as parking and trails and security, similar to the plans for the
Bailey Point Nature Preserve. Grant opportunities through the Legacy Fund may exist to offset some
capital costs. The site is proposed as a Regional Park through the DNR Legacy Program,making grants
for restoration and maintenance available from a variety of sources with assistance from The
Conservation Fund and the Friends of the Mississippi River.
FINANCIAL IMPACT
The city will need to provide staff time and legal services for contracts and agreements (such as this Letter
of Intent) that may be required for the successful funding and closing of the acquisition. Staff will receive
assistance with the grant writing but it will still require additional staff time for the meetings and reports.
The maintenance of the property should be kept to a minimum,however low maintenance prairie
plantings, Buckthorn mitigation, capital improvements and maintenance need to be accounted for or
recognized before going forward.
ATTACHMENTS
• Attachment 1 Houlton property letter of intent
• Attachment 2 Houlton property site map
• Attachment 3 Houlton buildings
• Attachment 4 Houlton proposed trails map
N:APublic Bodies\Agenda Packets\7-01-2013\Final\x8.1 sr letter of intent for Houlton.docx
(Attachment 1 Letter of Intent)
July 1,2013
Richard Erdmann
Executive Vice President and General Counsel
The Conservation Fund
1655 North Fort Myer Drive, Suite 1300
Arlington, Virginia 22209
RE: Houlton Farm, Elk River, MN
Dear Mr. Erdmann;
We have discussed this project with Steve Hobbs and the City of Elk River (City) requests the
assistance of The Conservation Fund (the "Fund") to acquire and permanently protect the above
referenced property. We believe your help is critical as we assemble all of the necessary
resources to obtain ownership of this roughly 340-acre natural resource area(the "Property").
Protection of the Property is a high priority for the City and our partners as an important regional
park and natural area.
The City is requesting that the Fund provide professional guidance and technical assistance to the
City to facilitate the process of acquiring the Property. It is anticipated that the Fund will provide
transactional assistance in acquiring the property from the current willing seller and work with the
City to secure funding for the purchase. The City and the Fund understand that it may not be
possible to either secure sufficient funding or complete this acquisition.
The parties acknowledge that a great deal of time, effort, and risk is required of the Fund to
successfully complete this project, including securing funding, working with the seller, and
completing the necessary due diligence. It is also understood that the Fund may need to pre-
acquire the Property and hold it for a time, at some risk and cost to the Fund, in order to secure the
transaction for the City.
The City agrees to reimburse the Fund, only from grant funds and donations it receives with
the assistance of the Fund, for its costs related to the transaction including; actual expenses for
appraisal, legal, title review, survey, property taxes, environmental survey, staff time of the Fund,
in accordance with the billing rates attached hereto as Exhibit "A", (not to exceed $77,000),
closing costs and interest at 4.25% annually should we incur such expenses. These costs are only
payable to the Fund upon final acquisition of the Property by the City from the Fund. If the Fund
pre-acquires the Property, but, for any reason, the City is unable to complete its acquisition of the
property by May 15 2014, the Fund may sell the Property commercially as it deems appropriate to
recoup the resources it has invested without liability or obligation to the City.
The City will provide coordination and the resources of its realty staff and legal department and
cooperate on all contracts required for the successful funding and closing of this acquisition. The
Fund and the City shall work to verify that funds will be available to acquire the property and will
enter into apurchase and sale contract prior to the Fund's acquisition of the property from the
seller. The City agrees to cooperate to this end, to the extent consistent with the City's obligations
under law, including the Minnesota Data Practices Act and Minnesota Open Meeting Law.
The City appreciates the Fund's assistance, and looks forward to completing this important
project. Please indicate the Fund's concurrence with the provisions of this letter by signing
below and returning a copy to the City.
Thank you in advance for helping with this wonderful project.
By:
Title:
Date:
Concurrence:
The Conservation Fund
By:
Title:
Date:
CC: Steve Hobbs, Minnesota Project Director
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