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HomeMy WebLinkAbout176-02 RESOLUTIONNAME OF FILE: CROSS REFERENCE: Item # Date • Resolution No.176-02 Document • 1 11/19/02 Resolution # 176-02 2 11/15/02 Staff review form 3 11/19/02 Budget adjustment form 4 10/30/02 Offer and acceptance contract 5 10/17/02 Memo from Paul Libertini, Staff Engineer to Greg Boettcher, Public Works Director 6 10/03/02 Letter from Shake's Frozen Custard, Inc. to City of Fayetteville 7 06/10/02 Letter from Dan Coody, Mayor to Donald E. & Debra. Osborne 8 12/06/02 Memo from Heather Woodruff, City Clerk to Jill Goddard, Engineering NOTES: X Agenda Request Contract Review Grant Review 1 STAFF REVIEW FORM For the Fayetteville City Council Meeting of November 19, 2002 . FROM: Jill Goddard Name Engineering Division Public Works Department ACTION REQUIRED: Approve the Offer and Acceptance Contract for the acquisition of all of Parcel No. 765-12164-000 (Shake's Frozen Custard, 2050 W. 6th Street) for the relocation of the Sang Avenue intersection with Sixth Street and approve the attached budget adjustment. COST TO CITY: $528.000.00 Cost of this Request 4470-9470-5809-00 Account Number 00019-0030 Project Number $410.559.00 Category/Project Number $56.422.00. Funds Used to Date $354.137.00 Remaining Balance Hollywood Str — 6th & Sang Ave Inter. Category/Project Name Street Improvements Program Name Sales Tax Capital Improvements Fund BUDGET R O Budget an X Budgeted Item X Budget Adjustment Attached Administrative Services Director CONTRACT/GRA /LEASE REVIEW: GRANTING AGENCY: 7 'Ac etc./444/ ///i/aa q�AaaaQer �/ , I cco nein Cit Attorn adag Purchasing Officer Date Da i141o Date r<YVIAXL. Ithtor Internal Audit ADA Coordinator Date Date STAFF RECOMMENDATION: Approval of the Offer and Acceptance Contract and Budget Adjustment. Adminis 'ye Se 'ces Directo Mayor 0/01/ Date /1 -Li - Date Cross Reference New Item: _X_ Yes Prey. Ord/Res. #: No Orig. Contract Date: Orig. Contract Number FAYETTEVIALE THE CITY OF FAYETTEVILLE, ARKANSAS DEPARTMENTAL CORRESPONDENCE • DATE: October 30, 2002 TO: Fayetteville City Council THRU: Dan Coody, Mayor Kit Williams, City Attorney Greg Boettcher, Public Works Director Jim Beavers, City Engineer Paul Libertini, Staff Engine��. FROM: Jill Goddard, Land Agent SUBJECT: Hollywood Street — 61" Street & Sang Avenue Intersection Project No. 00019 Donald E. & Debra L. Osborne (Shake's Frozen Custard) The City has been acquiring right-of-way and easements for the relocation of Sang Avenue so that it aligns with Hollywood Avenue to the south and, subsequently, a traffic light can be installed at that intersection with Sixth Street. The original proposal was to acquire 5,675 square feet (0.13 acre) in right-of-way from Donald E. & Debra L. Osborne, owners of the Shake's Frozen Custard property at 2050 W. Sixth Street (their total parcel being 0.33 acre). The City was then to acquire the portion of Sang Avenue (7,981 square feet or 0.18 acre) to the west of Shake's Frozen Custard from Daybreak Properties, Inc. (the street was initially acquired only in easement, not deed). After this acquisition, that portion of Sang Avenue was to be vacated as a street (with utility easements retained) and ownership transferred to the Osbornes. As they would gain 7,981 square feet and only lose 5,675 square feet plus have new surfacing, curb and gutter, and parking striping, our original offer to them was for an even exchange (zero compensation). • However, Shake's corporate officers were not in favor of an even swap and they were extremely concerned about lost business not just during construction but as a result of no longer having ingress/egress off of Sixth Street. We estimated that severance damages could • run as high as $100,000.00. In addition to that, a counter offer of $35,000.00 has been received from Daybreak Properties for the portion of Sang Avenue to be vacated and transferred to Osbornes (original offer was $13,000.00). Shake's Frozen Custard has offered the City the opportunity to purchase their entire parcel for $240,000.00. It is staffs recommendation that this is the optimum solution in that we wou d avoid a settlement made by court action, we wouldn't have to pay severance damages, the contractor wouldn't have to take special precautions to keep access to the business available at all times, we would save the cost of improvements to the property (estimated to be $50,000.00), we wouldn't have to purchase the portion of Sang Avenue ($35,000.00 given the counter-offer), and the remaining property not needed for right-of-way could be sold after construction (estimated to be $100,000.00 as it includes a building). Right-of-way and easements have already been acquired from the Kenneth W. Lazenby Revocable Trust ($53,100.00) and William A. Lazenby ($500.00). A traffic signal is needed at this intersection for both the school traffic to the north and fire station calls from the Hollywood Avenue station. The master street plan in conjunction with the proposed water park project would divert traffic to Hollywood Avenue and the new traffic signal at Sixth Street. Presented for your approval is a signed Offer and Acceptance Contract for $240,000.00 to acquire Parcel No. 765-12164-000 in its entirety. This action would also entail a budget adjustment (attached). If this purchase is not approved, we stand a good chance of being forced by the courts into buying the entire parcel anyway or essentially paying the equivalent in severance damages and then not having any remainder to sell to recoup costs. This purchase is the deciding point of whether this much-needed project is to be constructed or is to be removed from the C.I.P., keeping in mind that $53,600.00 has already been paid for right-of-way, plus $3000.00 in appraisal fees, for a total expenditure to date of $56,422.00. Air City of Fayetteville, Arkansas •Budget Adjustment Form Budget Year 2002 Department: Public Works Division: Engineering Program: Sales Tax Capital Improvements Date Requested 11/19/2002 Adjustment Number Project or Item Requested: $528,000 is requested in the Hollywood Street - 6th & Sang Ave Intersection capital project. Project or Item Deleted: $528,000 from the Mount Sequoyah W&S System Upgrade capital project. Justification of this Increase: The additional funds are needed to cover the cost of the right-of-way for the intersection and to replace some of the existing waterline. Justification of this Decrease: The project is currently on hold. Increase Expense (Decrease Revenue) Account Name Account Number Amount Project Number Street improvements 4470 9470 5809 00 528,000 00019 1 Decrease Expense (Increase Revenue) Account Name Account Number Amount Project Number Water line improvements 4470 9470 5808 00 528,000 01023 1 Approval Signatures Requested By / Date udget rage' Date Department Director Date Admmrs e Services Director //-/—vv Date 43 Date Budget Office Use Only Type: A B C ,1/43 E Date of Approval Posted to General Ledger Posted to Project Accounting Entered in Category Log Date Initial Date Initial Date Initial Date Initial • HWY 180 & SANG AVE./HOLLYWOOD AVE. INTERSECTION IMPROVEMENTS ESTIMATED PROJECT BUDGET Intersection Improvements: $483,000 Contingency 15%: $72,000 Intersection Subtotal: 18" Waterline, 300 feet: $30,000 8" Waterline, 450 feet: $45,000 Waterline Subtotal: Construction Testing: $5,000 Testing Subtotal: Right -of -Way: $303,000 R/W Subtotal: Project Grand Total: Existing Project Budget: Requested Budget Amendment: $555,000 $75,000 $5,000 $303,000 $938,000 -$410,000 $528,000 • • OFFER AND ACCEPTANCE CONTRACT 1. The City of Fayetteville, Arkansas, a municipal corporation, hereinafter referred to as the Buyer, offers to buy, subject to the terms and conditions set forth herein, the following described property: Parcel No. 765-12164-000 All of Block Numbered Two (2) in Westwood Addition, a replatto the City' of Fayetteville, Arkansas, as per plat on file in the office of the Circuit Clerk and Ex - Officio Recorder of Washington County, Arkansas, LESS AND EXCEPT that portion contained in the Right of Way of U.S. Highway Number 62, and being all of that part of the Northeast Quarter (NE%) of the Northwest Quarter (NW%) of Section Twenty (20), Township Sixteen (16) North, Range Thirty (30) West, lying North and West of U.S. Highway 62. (Also known as Shake's Frozen Custard at 2050 W. 6th Street, Fayetteville, AR.) 2. Purchase Price: Subject to the following conditions, the Buyer shall pay for the property at closing, the total and cash payment of $240,000.00. 3. Contingent Earnest Money Deposit: The Buyer will tender a check for $4,800.00 to Donald E. Osborne and Debra L. Osborne, husband and wife, hereinafter referred to as the Seller, as earnest money, which shall apply on the purchase price. 4. This offer of purchase is contingent upon approval of the City Council of the City of Fayetteville, Arkansas, and, if they do not so approve, the earnest money deposit will be returned to the Buyer by the Seller. If title requirements are not fulfilled or the Seller fails to fulfill any obligations under this contract, the earnest money shall be promptly refunded to the Buyer. If the Buyer fails to fulfill his obligations under this contract or after all conditions have been met, the Buyer fails to close this transaction, the earnest money may, at the option of the Seller, become liquidated damages to the Seller. Alternatively, the Seller may assert legal or equitable rights which it may have because of breach of this contract. A Vendor Form is attached hereto on which the Seller must provide to the Buyer a Tax Identification Number (corporation) or Social Security Number so that the eamest money check can be written and mailed to the Seller within two weeks of the Seller's acceptance of this contract. 5. Conveyance will be made to the Buyer by general Warranty Deed, except it shall be subject to recorded instruments and easements, if any, which do not materially affect the value of the property. Such conveyance shall include mineral rights owned by the Seller. 6. The Seller shall furnish a policy of title insurance in the amount of the purchase price from a title insurance company as selected by the Buyer. The cost of such title insurance policy shall be equally shared by the Seller and the Buyer. Seller agrees to allow Buyer, if Buyer so desires, at Buyer's expense, to survey the property. Seller agrees to cure any title problems which may result from any differences between the recorded legal descriptions of the property and the survey description. Said title problems, if any, must be solved prior to closing to the satisfaction of the Buyer. 8. Taxes and special assessments due on or before closing shall be paid by the Seller. Insurance, general taxes, ad valorem taxes, special assessments and rental payments shall be prorated as of closing. OFFER AND ACCEPTANCE CONTRACT- Page ONTRACTPage 2 of 4 9. The closing date is designated to be thirty ( 30 ) days after approval of this contract by the Fayetteville City Council. If the last date of such closing falls on a weekend or holiday, it will be held the following working day. The closing agent will be a mutually agreed upon closing firm with Washington County, Arkansas. 10. Possession of the property shall be delivered to the Buyer on the date of closing. 11. Seller hereby grants permission for the Buyer or its employees or designates to enter the above described property and improvements for the purpose of inspection and/or surveying. 12. All fixtures, improvements and attached equipment are included in the purchase price. 13. Risk of loss or damage to the property by fire or other casualty occurring up to the time of closing is assumed by the Seller. 14. Seller shall disclose to Buyer any and all environmental hazards of which Seller has actual knowledge. Upon acceptance of all conditions and terms of this Offer and Acceptance, Buyer and Seller shall share equally the costs of any and all testing for the existence of environmental hazards. Should the existence of environmental hazards be known or determined, Seller shall cure such, at Seller's expense, or in the alternative, at Buyer's discretion, Buyer may cure such environmental hazard, and Seller shall indemnify Buyer for all costs associated with said cure. 15. This agreement shall be governed by the laws of the State of Arkansas. 16. This agreement, when executed by both the Buyer and the Seller shall contain the entire understanding and agreement of the parties with respect to the matters referred to herein and shall supersede all price or contemporaneous agreements, representations and understanding with respect to such matters, and no oral representations or statements shall be considered a part hereof. 17. This contract expires, if not accepted by the Seller on or before the 8th day of November 2002. 18. NOTICE: BUYER ASSERTS AND SELLER HEREBY ACKNOWLEDGES THAT THIS OFFER IS EXPRESSLY CONTINGENT UPON THE APPROVAL OF THIS OFFER OF PURCHASE BY THE CITY COUNCIL OF FAYETTEVILLE AND THAT THE FAILURE OF THE COUNCIL TO SO APPROVE WILL MAKE ALL PORTIONS OF THIS OFFER NULL AND VOID, INCLUDING, BUT NOT LIMITED TO, THE RETURN TO BUYER OF THE $ 4.800.00 EARNEST MONEY DEPOSIT. OFFER AND ACCEPTANCE CONTRACT Page 3 of 4 SELLER: • Donald E. Osborne Debra L. Osbome AGENT OR WITNESS: BUYER - City of Fayetteville, Arkansas, A municipal corporation i a oody, Mayor (SEAL) Date: Date: Date: Date: /6744 Date: l0 -30 -O2._ "OFFER AND ACCEPTANCE CONTRACT Page 4 of 5 ACKNOWLEDGMENT • STATE OF ) ) COUNTY OF ) ss. BE IT REMEMBERED, that on this date, before the undersigned, a duly commissioned and acting Notary Public within and for said County and State, personally appeared Donald E. Osborne and Debra L. Osborne, husband and wife, to me well known as the persons who executed the foregoing document, and who stated and acknowledged that they had so signed, executed and delivered said instrument for the consideration, uses and purposes therein mentioned and set forth. WITNESS my hand and seal on this day of 2002. Notary Public MY COMMISSION EXPIRES: STATE OF ARKANSAS COUNTY OF WASHINGTON ACKNOWLEDGMENT ) ) ) • ss Cmc s� (2-obe BE IT REMEMBERED, that on this date, before the undersigned, a duly com issioned and acting Notary Public within and for said County and State, personally appeared Dan Coody and riff, to me well known as the persons who executed the foregoing document, and who stated and acknowledged that they are the Mayor and } " City Clerk of the City of Fayetteville, Arkansas, a municipal corporation, and are duly authorized in their respective capacities to execute the foregoing instrument for and in the name and behalf of said municipal corporation, and further stated and acknowledged that they had so signed, executed and delivered said instrument for the consideration, uses and purposes therein mentioned and set forth. WITNESS my hand and seal on this C)tta day of C..G-roe/CfL 2002. 6/e—ijace,L. MY COMMISSION EXPIRES: o -s m'IDN@aa 6 P ;snit aici nmow Aquani a m _a masmp@Awa o o #+ 9L� @� 2 £ R S81/868 luau:Lassa gpi a+a m m_ 3111\13Ay DNVS FAYETTEVALE THE CITY OF FAYETTEVILLE, ARKANSAS PLEA, RETURN TO: CITY OF FAYETTEVILLE 113 W. MOUNTAIN FAYETTEVILLE, AR 72701 (479) 444-3407 FAX: (479) 575-8202 VENDOR FORM Vendor# (For Office Use Only) According to the Federal Income Tax Law, the City is required to obtain _the information listed below from all Individuals and companies with whom we do business Failure to comply may subject you and/or your company to certain penalties, as well as withholding tax. Please complete the following: Sole Propnetorship Corporation Partnership Tax-exempt organization under Section 501(a) Foreign Govemment X Individual Other (please explain) Tax Identification Number: Federal employer identification number OR Social Security number (for individual or sole propnetors) I certify that the above information is true and correct. Donald E & Debra L. Osborne Name of Individual or Business 1102 S. Rangeline Address Joplin, MO 64801 City, State; Zip Code Signature Date N/A Title Please mail or FAX this completed form to the City of Fayetteville at the above address or FAX number. 113 WEST MOUNTAIN 72701 479-621-7700 FAX 479.5758257 FAYET NEVIItE THE CITY OF FAYETTEVILLE. ARKANSAS DEPARTMENTAL CORRESPONDENCE To: Greg Boettcher, Public Works Director Thru: Jim Beavers, City Engineer From: Paul Libertini, Staff Engined 41 Date: October 17, 2002 Re: Acquisition of Shake's Property Sang/Hollywood & 6w Street Intersection Jim Beavers, Jill Goddard and Paul Libertini met with John Harrell and Corey Osborne of Shake's Frozen Custard on October 37a to discuss their concerns over the proposed construction project and the City's • offer letter. The bottom line is that Shake's wants the City to buy their entire parcel at the appraised value of $240,000 because of their concerns over direct access and potential loss of 20% of their business. For comparison, I have constructed the attached spreadsheet showing a comparable project and 4 options for the project at hand. The Sunbridge Drive and College Avenue Intersection is similar to this project in that it closed an existing intersection (Villa Blvd.) with College Avenue and constructed a new intersection to line up with the extension of Sunbridge Drive. In 1998, this project acquired 3 parcels for a total of $346K which included buying 2 existing buildings for $88K and paying severance damages of $24K. The 4 options are listed below with the total cost being the total project cost of land acquisition for 7 properties. Option 1: Partial Take of Shake's Property — This includes purchasing the old Sang Ave. easement from Daybreak Industries for $35,000 and constructing Shake's a new driveway and parking area for $50,000. Total cost = $143,200 Option 2: Partial Take of Shake's Property w/ Severance Damages — $100,000 was added for severance damages for the Shake's property assuming they force the City to a court settlement. Total cost = $243,000 Option 3: Buy Whole Parcel of Shake's Property — The attached Shake's letter offers to sell the entire parcel for the appraised value of $240,000. Total Cost = $298,200 Option 4: Buy Whole Parcel & Sell Remnant of Shake's Property— A conservative estimate to sell the remaining parcel including the building is $100,000. Total Cost = $198,200 i As it stands now, the City's offer to Shake's is for $0 (zero dollars) based on the current certified appraisal. This amount is based on the fact that although the City wants to acquire 5,675 square feet from Shake's, they are purchasing 7,979 square feet of property from Daybreak Industries which will be transferred to Shake's, and then the City will construct a new driveway and parking area on this property for Shake's. In the after situation, Shake's access will be restricted to Old Farmington Road, but in the present situation they have direct access from 6's Street and Old Farmington Road. Although, I personally feel that the proposed site plan for Shake's offers good access through the new signalized intersection, Shake's does not agree. In Option 2,.I have factored in $100,000 as severance damages based on the belief that Shake's will never settle for an "even trade". Option 4 shows the City acquiring the entire parcel and then turning around and selling the remainder which would bring the total R/W cost down to approx. $200K which is very reasonable comparing this amount to the $346K paid for the 1998 Sunbridge/College Project. Even if the City sold the remainder just for the land value of $70K (8,700 sq. ft. x $8/sq. ft.), the total project land acquisition cost would be $230K, which is still reasonable. Based upon the fact that I believe the City will not be able to acquire the Shake's property for the cost shown in Option 1, I recommend that it would be in the City's best interest to move forward to accept Shake's offer, as shown in Option 4. This would alleviate a long drawn out, expensive acquisition phase with attomey involvement, allow the project to move forward now, allow the City to have more flexibility in constructing the sidewalk away from the back of curb, allow more room for City utilities and provide more room to work in during construction. Attachments: Spreadsheet Shake's Letter 10/3/2002 0 P T 1 0 N 1 0 P T 1 0 N 2 0 P .T 1 0 N 3 0 P 1 T 0 N 4 1,„d;,,...PARTLtLTAKE'OF SHCtCE'SPROPERTFNO, 2.:; , ?-.Sunbridge DriveS:-Callege Aredue ImerseciionReu/ignmenf-'1998. ' -:.L.' k ?- R/W Pmn. Esmt. Temp. Esmt. RNV Perm. ant Temp. Esmt Severance Severance Cost/ft' Tract No. Property Ovmer (id) (ft2) (B') RAV Pam. Esmt. T.C.E Buildings Landscape Damages Total of R/W 1 Cutty 15,794 1 4,117 5128,600 540,000 53,335 546,000 511,000 523,500 5201435 512.54 2 Fayetteville Parma, 9,088 5 3,092 574,000 53,190 542.000 50 5119,190 512.76 3 U ofA Foundation 4,596 2 4,130 523,000 4,115 52.100 S0 SO 325.100 55.00 3 Totals 29,478 0 11.339 5225,600 .50 58.625 588,000 50 523,500 5345,725 511.44 550,000 550.0610 58.81 1,„d;,,...PARTLtLTAKE'OF SHCtCE'SPROPERTFNO, BEyERANCEDANLACES3;3s ?- Sang/Hollywood & 6th St (Hwy 180) Intersection Realignment- 2002 Pam. Esmt. Temp. Esmt RNV Perm. ant Temp. Esmt Severance Severance CosVm Severance Property Owner Coapt' Tn,ct No. Property Owner (B') (ft') (ft') RAV Penn. Ent- T.C.E. Buildings landscape Damages Total of R/W 1 Lazenby Trust 7,981 540,000 4,148 540,000 511,000 52,100 553.100 511.000 5 553,100 56.39 5 William Lazenby 513 513 5500 5500 5500 5500 2 5500 02414 2 Fay. Public Schools •2414 4,115 SO S0 SO S0 50 3 SO 5,675 3 Osborne (Shaka) 5,675 519 978 SO S0 SO 3150,000 326.43 550,000 550.0610 58.81 4 Daybreak Properties 7,979 SO 535,000 535.000 54.39 6 535.000 54.39 6 KSK Inv. (Taco Bell) 381 51.900 51.900 51.900 54.99 7 51.900 $4.99 7 McDonald, 777 52.700 32,700 52,700 53.47 52,700 $2,700 53.47 4630 Totals 22,793 4,634 5,639 579,600 SO 52.600 SO 311,000 550,000 5143.200 56.17 • Donated R/W NOT Included in Calculations NOTES: 550K shown under Severance Damages Is NOT damages, but cost to build Shakes new parkin` area ..--.4..:,'.`,PART41ETAItTAOFSHAICE'5PRQPERT.:1'31T.SEF.ERANCEDA"llAGES`Ceca&r'`7`i `-0.:,3 Sang/Hollywood & 6th St (Hwy 180) Intersection Realignment - 2002 lywood & 6th St (Hwy 180 Intersection Realignment- 2002 RAV Pam. Esmt. Temp. Esmt Temp. Esmt. Severance Severance CosVm Tract No. Property Owner (0') (ft1) (ft') RAV Perm. Esmt T.C.E. Buildings landscape Damages Total of R/W 1 Lazenby Trust 7,981 7,981 4,148 $40,000 540,000 52,100 32,100 511,000 311,000 553.100 56.39 5 Wiliam Lazenby William Lazenby 513 513 5500 5500 5500 5500 2 Fay. Public Schools 02414 4,115 4,115 SO 50 SO S0 50 3 Osbome(Shakes) 5,675 519 978 f0 SO SO 5150,000 3150,000 326.43 4 Daybreak Properties 7,979 0 535,000 SO 535.000 54.39 6 KSK Inv. (Taco Bell) 381 381 51,900 51.900 51.900 54.99 7 McDonald, 777 McDonalds 777 52,700 52.700 52,700 53.47 52,700 Totals 22,193 4630 5,639 379,600 50 52.600 50 511,000 5150.000 3243.200 510.56 • Donated R/W NOT Included in Calculations t.�"n 'clItli:N'BOLE-PARCF"L. .•SHAKE'S'PROPERTI'•i- < 2 .:-._•..-''..... .... _ A�'i..•..A./6t. c Sang/Hollywood & 6th St (Hwy 180) Intersection Realignment -2002 lywood & 6th St (Hwy 180 Intersection Realignment- 2002 RAV Pawn. Esmt. Temp. Esmt Temp. Esmt. Severance Severance Cosdft Tract No. Property Owner (ft') (01) (ft') RAV Perm. Esmt. T.C.E. Building, Landscape Damages Tata! of R/W 1 Lazenby Trost 7,981 7,981 4,148 540,000 540,000 32,100 32,100 511,000 311,000 553,100 56.39 5 William Lazenby William Lazenby 513 513 5500 5500 5500 5500 2 Fey. Public Schools •2414 4,115 4,115 SO SO SO SO 50 3 Osborne (Shakes) 14,375 14.375 5240,000 540,000 . 5240,000 516.70 4 Daybreak Propel/es 0 0 50 SO SO 50 6 KSK Inv (Taco Bell) 381 381 51,900 51.900 31,900 54.99 7 McDonalds 777 McDonalds 777 5,700 52.700 52,700 53.47 52,700 Totals 23,314 4,115 4,661 5284.600 30 32,600 SO 511,000 S0 3298,200 512.57 .'...1 .BUY .w HOLE, PARCEL'-:S141I1'E'S:PROP.ERT,Y.nSELL'RE:4N IN7{;;8le,'?• Sang/Ho lywood & 6th St (Hwy 180 Intersection Realignment- 2002 RAV Penn. Esmt. Temp. Esmt. Severance Cos✓ft' Tract No. Property Owner (IE) (ft') (ft') RAV Perm. Esme T.C.E. Buildings Landscape Damages Total of R/W 1 Lazenby Trutt 7,981 4,148 540,000 32,100 311,000 553.100 56.39 5 William Lazenby 513 5500 5500 2 Fay. Public Schools •2414 4,115 50 SO 50 3 Osborne (Shakes) 14.375 540,000 . 5240,000 316.70 4 Daybreak Properties 0 SO 50 6 KSK Inv. (Taco Bell) 381 51.900 51.900 $499 7 McDonalds 777 52.700 52,700 53.47 Sell Shakes Remnant -8.700 -5100,000 -5100,000 51149 Totals 14,814 4,115 4,661 5184,600 SO 52,600 50 511,000 SO 5198.200 513.20 City of Fayetteville 113 West Mountain Fayetteville, AR 72701 October 3, 2002 • • /Lakes Frozen Custa'cd (Mc. 244 WEST DICKSON FAYET1EVILLE, AR 72701 Paul Libertini, PE Jim Beavers, City Engineer PHONE' (479) 587-9115 E-MAIL: WWW.SHAKESFROZENCUSTARD.COM We appreciate your efforts to improve traffic patterns in the city and particularly appreciate your and Jill's efforts to try to work with us on the access issue, but we have grave concerns regarding how your proposal will effect our business. Although it may appear to be an even swap as far as land area and parking spaces go, we believe your proposal would devastate our business. We have serious concerns, including but not limited to traffic flow, and the ability to have our product delivered by semi -trailer. Furthermore we are extremely concerned about being taken from three access points down to one and having no direct access off of 6th Street (the people coming off 6th Street will have to turn off 6th Street and then immediately turn against traffic very near a light to get to our store.) Our business is unique in that 82% is drive -up and access points for vehicles are critical to our success. We frankly question how the appraised value goes up as the access goes down and particularly how the property we would give up with good 6th Street access is worth $8 a sq. ft and what we would get with no access to 6th Street and only one entrance point is worth $10 a sq: ft. Be that as it may, we are proposing to sell our store to the city for your appraised value of $240,000. We believe this to be the best alternative for the city. Let me elaborate as to how this is beneficial to the city and to Shake's. Our understanding is that between the land (the to be vacated Sang) and work to restore our parking you would have about $55 - 60,000 in cost. You have, quite frankly, the ability to "condemn" our property but that includes the responsibility to make us "whole. With so much of our business coming from drive -up and the access problem of one awkward access we believe on a very conservative basis we would lose 20% of our business; but could be much higher. Last year sales were $337,594 and our marginal (last dollar) profit is about 35% This would reflect a loss of $23,631.58 a year or i • • $354,473.70 over 15 years (conservative since the 'useful life' of the budding far exceeds 15 years). - This figure is not discounted for present value but also includes no assumptions for natural growth in sales. In numerical form: $337,594 X .20 67,518 X .35 = $23,631.58 X15 years $354,473.70 Using this calculation the city's cost would be the $354,473.70 plus the cost of buying Sang and reworking the property (about $55,000 or a total cost of $409,473.70) This doesn't include the effect of disruption of business during construction. In addition to the monetary positive for the city, this proposed transaction would also make the city's construction job easier, make it where the adjacent street wouldn't have to be purchased and certainly saves Shake's a great deal of interruption. We understand the city has budgetary constraints, but we believe this to be in the city's best long-term interest. Also, frankly it saves us the disruption of business during construction and the ongoing loss of business that would be caused by the loss of access. Please understand, we are wilting to forego the cost of a move and what we believe to be an overly conservative appraisal to work with the city to resolve this issue. What we believe to be our very reasonable offer is extended for 30 days (expiring 11-03-02) to help get this situation resolved. Again, our offer is for $240,000 (your appraised value) if accepted by 11-03-02. We would ask that the transaction be closed by 1-03-02. We believe this to be a reasonable amount for both sides and would avoid a conflict over the loss of future business. Thank you for your consideration. Sincerely, John Harrell orey Osborne . FAYETTEVItLE NM - THE CITY OF FAYETTEVILLE, ARKANSAS • June 10, 2002 Donald E. & Debra L. Osborne 1102 S Rangeline Joplin, MO 64801 RE: Project No. 00019 Hollywood Street -- Sixth & Sang Avenue Intersection Offer Letter Dear Mr. and Mrs. Osborne: The City of Fayetteville is planning the construction of a new intersection of Sang Avenue at Sixth Street (U.S. Hwy. 62). Acquisition of part of Parcel No. 765-12164-000 located at the current southeast corner of Sang Avenue and Old Farmington Road is necessary for these improvements (see attached drawing). Also necessary for this project is a small permanent water/sewer and drainage easement in the northwest corner of the property and a 10 foot wide temporary construction and grading easement west of the right-of-way acquisition area. The temporary construction easement will terminate upon completion and acceptance of the project by the City. The City of Fayetteville is in negotiations to acquire and subsequently vacate the 50 foot wide portion of Sang Avenue immediately west of your property. It is then proposed to deed this area back to you in exchange for the nght-of-way acquisition. This vacated portion of the street would then become your primary parking area. You will no longer have access directly off of Highway 62; however, new pavement, curb and gutter improvements, and a new traffic flow design are all being worked in as a part of this project (see attached drawing). Because of the benefits to your property, the signed documentation is being requested without compensation. This is based upon the certified appraisal report on your property as prepared by Mark Risk of the Real Estate Consultants, dated December 21, 2000, and updated April 10, 2002 The front page of the appraisal report is enclosed. Included is a general map of the subject area, as well as a drawing of your specific property depicting the anticipated areas required for acquisition and the temporary easement. 113 WEST MOUNTAIN 72701 479-6214700 FAX 479-675-8257 i • • Donald E & Debra L. Osborne Page 2 of 2, Offer Letter Should you elect to accept this offer, the Warranty Deed, Water/Sewer and Drainage Easement and the Temporary Construction and Grading Easement contained herein should be executed by all parties with current ownership interest in the particular property. The documents should be notanzed and returned to the City of Fayetteville. A City Land Agent will be pleased to witness and notarize the execution of the documents if you will advise our office accordingly. Reduced copies of the WarrantyDeed, Water/Sewerand Drainage Easement and Temporary Construction and Grading Easement are included for your records. We can provide copies of the recorded documents upon your request and at the appropriate time. A City Land Agent will be glad to meet with you at your convenience and discuss all phases of this project and the associated easements. Please contact Jill Goddard at (479) 444-3407, Holly Jones at 444-3414, or Paul Libertini, Project Engineer, can be reached at 444-3419. Sincerely, Dan Coody Mayor. DCfjsg Enclosures PROJECT COUNTY PARCEL # LOCATION FEE OWNER ADDRESS • • I TPDATET1 JtPPRAISAI, REPORT ECM CITY OF FAVF.TITVIIJ.F Limited Restricted Appraisal Report Hollywood Street – 6th & Sang Avenue Intersection Washington 765-12164-000 2050 W. 6th St., Fayetteville, AR Donald E. & Debra L. Osborne 1102 S. Rangeliue, Joplin, MO 64801 ESTATE APPRAISED Fee Simple AREA OF WHOLE .33 acres AREA OF RESIDUAL .38 acres AREA OF PERMANENT R -O -W ACQUISITION 5,675 sq.ft. or .13 Ac. (Descriptions attached) Water/Sewer and Drainage Easement 519 sq.ft. or .012 ac. Temporary Construction and Grading Easement 978 sq.ft. or .022 ac. ESTIMATED FAIR MARKET VALUE OF THE PROPERTY: Before Land Improvements Total After Land Improvements Total 5116,000 $132,000 $1'19 00Q $245,000 S76IJ)04 FAIR MARKET VALUE OF PERMANENT R -O -W ACQUISITION As of 10`h day ofApril 2002 ALLOCATION OF F.M.V. OF TOTAL ACQUISITION R -O -W 5,675 SF ® 58.00/SF Drainage Esmt. 519 SF @ $8.00/SF T.C.E.• 978 SF (:) $8.00/SF x .10 x 1 Trees None Improvements: Concrete Parking Area 5,675 SF Q $2.50/S.F. Total RAW, D.E., T.C.E., & Improvements Less Benefits: New Parking Area and Land 7,979 SF © S10.00/SF = $79,790 Total Compensation = S45,400 =$ 4,152 = 5 782 =S14,188 ATTACHMENTS: Certificate of Appraiser _X— Photographs X Site Improvement, H&B Use Narrative __X_ Legal Descriptions Markct Data and Cost Approach _X— Survey Tax Assessment Card • times Say Say Say SO $ 45,400 S 4,200 S 800 $ 0 Say 514,204 $ 64,600 (5_79,8(10) ($ 15,200) Say S 0\etgt tingrtxrrrni m E\ -y-Risk GAA, #CGO$17,j STATE \� 45 i . t t= Cr•RTIFED S0 z GENERAL ) _ No. CGD=0wat2 / Water/Sewer and Drainage Easement value is based upon fee simple land value. Temporary Construction Easement (T.C.E.) value is based upon the fee simple land value multiplied the Current Yield on 1 Year CDs for a 1 year period plus a premium for inconvenience. FAYETTEVI&E THE CITY OF FAYETTEVILLE, ARKANSAS DEPARTMENTAL CORRESPONDENCE To: Jill Goddard, Engineering From: Heather Woodruff, City Clerk Date: December 6, 2002 Attached is a copy of Resolution No. 176-02 approving an offer and acceptance contract between the City of Fayetteville and Donald and Debra Osborne for the purchase of land located at 2050 West Sixth Street in the amount of $240,000.00 for the Hollywood Avenue and Sixth Street intersection improvement project. The original resolution will be microfilmed and filed with the City Clerk. cc: Nancy Smith, Internal Auditor