5.0. SR 05-24-2004MEMOEANDUM
Item 5.
TO:
FROM:
DATE:
SUBJECT:
Mayor and City Council
Pat Klaers, City Ad/f~rator
May 24, 2004
Koehler Property
Mary Koehler submitted a letter requesting $185,000 for their property located at 1221 5m Street.
The estimated market value of the property is $178,000 (as indicated by the sales comparison
approach). This figure comes from the appraisal the city authorized and which was completed by
Jerry Smith of White Dove Appraisals.
I do not like having the city pay more than what the appraisal indicates is a fair market price but, in
this case, I recommend we accept the offer from Mrs. Koehler. With the adjacent Bailey property,
the city paid the amount identified in the appraisal. However, each situation is different and in 2001
with the acquisition of the Bailey property we also were involved in a life estate situation and the
garage is still being used as storage by Mrs. Bailey.
In this situation with the Koehler property, I believe we should move quickly in order to allow the
Koehlers to take advantage of the current low interest rates. If the city does not move quickly, I am
concerned that the Koehlers may decide to not sell and stay in their home for a number of years.
Acquisition of this property at some time in the future would be more expensive than the offer
currently on the table. If the Koehlers do not sell for a few years, it would be difficult for the city to
make long-term library expansion plans.
Obtaining this property will assist the city when the time comes to attempt to acquire the Peterson
property that is directly west of the library building. By obtaining this property, we will not be
"required" to obtain the Peterson property for the future expansion of the library and accordingly,
we will be in a much better negotiating position. Design options can be laid out so that if we never
acquire the Peterson property, we could plan for one (or two?) expansions at the library utilizing the
Koehler and Bailey properties as parking and some of the current parking lot for a building
expansion. Overall for the long-term benefit of the library, I think it is in our best interest to acquire
both the Koehler property now and the Peterson property in the future.
Recommendation
It is recommended that the city accept the offer from Mrs. Koehler to purchase the property at
1221 5th Street for $185,000.
S:~Council~Pat~ 2004~ Koehler0524.doc
Mr. & Mrs. Koehler
1221 Fifth Street
Elk River, MN 55330
May 16,2004
Patrick Klaers
City Administrator
City of Elk River
12065 Orono Parkway
Elk River, MN 55330
Dear Pat Klaers:
Thank you for your letter dated May 11, 2004. I have been looking at houses in the area
for replacement of my home and property. After looking at comparable properties in the
area, I am finding that we will need $185,000 for my home and property. I believe that
re-negotiations at this price would be fair to both my family and to the City of Elk River.
Could this be brought to the next board meeting for discussion?
Feel free to contact me at my home phone number, 441-1599. Thank you.
Sincerely,