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<br /> <br />Item Description <br />Authorization of Purchase Agreement with Tiller Corp. for <br />Purchase of Woodland Trails Addition <br /> <br />Item Number <br />7.1. <br /> <br />Prepared by <br />Bill Maertz, Parks and Recreation <br />Director <br />Reviewed by <br />Lori Johnson, City Administrator <br /> <br />City of Elk River <br />REQUEST FOR COUNCIL ACTION <br />Agenda Section Meeting Date <br />Administration June 19,2006 <br /> <br />Introduction <br />Authorization of purchase agreement with Tiller Corp. for purchase of Woodland Trails addition. <br /> <br />Discussion <br />In 2004, Council authorized staff to apply for state and federal grants to assist with purchase of 78 acres <br />of land adjacent to Woodland Trails Park. The land is owned by the Tiller Corp. The city was awarded <br />$1,200,000 in grants for this acquisition. An appraisal of the property prepared by Patchin, Messner and <br />Dodd puts a value of $1,950,000 on the property. <br /> <br />The details of the purchase agreement are as follows: $1,755,000 purchase price ($22,500 per acre). <br />$1,390,000 of the purchase price to be paid in cash at the time of closing. The city shall receive <br />reimbursement of $1,200,000 by the state after the title has been recorded. <br /> <br />The balance of the purchase price ($365,000) shall be recorded by the city in the form of park dedication <br />credits. The park dedication credits shall be indexed to the prime rate. Indexing the park dedication <br />credits to the prime rate was a condition requested by Tiller Corp. as a hedge against park dedication fee <br />increases. City of Elk River park dedication fees on residential property have increased one hundred <br />percent since 2001. <br /> <br />There is precedent for using park dedication credits for land purchases. In 1994, the city of Elk River <br />provided Shiely Company park dedication credit in exchange for the 80 acre Top of the W orId Park. <br /> <br />The city attorney and community development director have reviewed this agreement. <br /> <br />Financial Impact <br />$190,000 park dedication funds (part of the approved 2006 parks capital budget) <br />$365,000 park dedication credits indexed to prime rate (restricted to use within the mining district) <br /> <br />Attachments <br /> <br />· Purchase Agreement <br />· Summary Report of Appraisal <br /> <br />Co \Documents and Settings \ tallard\Local Settings \ Temporary Internet Files \ OLKF\ 7 2 Purchase Agreement Authorization (3).doc <br />