Item 3: Exchange of Real Property Interests on Franklin Boulevard

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Action: Exchange of Real Property Interests on Franklin Boulevard Meeting Date: October 23, 2006 Agenda Item Number: 3 Department: Public Works Staff Contact: Mark Schoening www.eugene-or.gov Contact Telephone Number: 682-5243 ISSUE STATEMENT The City Council is requested to approve an exchange of an approximate 0.29 acre City-owned property fronting on Franklin Boulevard for an approximate 0.56 acre exclusive easement across a portion of the adjacent property owned by Tedron Properties (site of the new Holiday Inn Express) which contains a segment of the Millrace. In addition, Tedron Properties will pay the City $143,300 at the time of closing of escrow. BACKGROUND This proposed exchange was presented to the council as a Consent Calendar item at the September 25, 2006, City Council meeting. The item was pulled from the Consent Calendar and then tabled with the council requesting additional information pertaining to a number of issues, including whether or not the Oregon Department of Transportation (ODOT) would grant an access permit to the City-owned property, how this exchange may meet the needs of a future bike/pedestrian path in this area, and whether the easement will convey the necessary rights to provide such public access and development of the easement corridor. The City property proposed for exchange is mostly at-grade with Franklin Boulevard and has been vested in City ownership since 1926. The City also owns a larger tract of land at a lower elevation near the Willamette River and the Millrace, which will be retained in City ownership. A map is attached to illustrate the proposed areas of exchange. This segment of Franklin Boulevard is under ODOT jurisdiction and is a limited access highway. As such, ODOT has stated it will not permit an access from Franklin to serve the City lot. Access would be required through the adjacent ownership, resulting in the highest and best use of the City property to be assemblage with the adjacent property. A market value appraisal was completed by an independent appraisal firm which concluded a cash difference in value of the two properties of $35,000. The appraiser appraised the City parcel based upon what someone other than the adjacent owner would be willing to pay for the property. ODOT informed the appraiser an additional access onto Franklin/Highway 99 would not be permitted to serve the City parcel. As such, the appraised value of the City parcel was substantially discounted because the access to Franklin Boulevard is restricted by ODOT. However, in further negotiations, the adjacent owners acknowledged there was additional value in the City parcel when assembled with their property as compared to the stand alone appraised value. This is primarily because the adjacent ownership has existing access onto both Franklin Boulevard and Garden Avenue which can serve the City parcel upon assemblage. Since the September 25 City Council meeting, staff has further researched the restricted L:\CMO\2006 Council Agendas\M061023\S0610233.doc