MEMORANDUM Comfort Lake-Forest Lake Watershed District 1 To: Board of Managers Date: December 5, 2018 From: Mike Kinney Subject: McCullough Property Background/Discussion I recently received a phone call from Robert (Bob) McCullough who owns two parcels of land just south of the Bixby Park project site in Forest Lake. These parcels are zoned commercial but are almost entirely wetland. The westerly parcel has several billboards on it pursuant to a lease that generates an unknown amount of revenue. The anticipated 2109 property taxes for the westerly parcel that has a boundary with I- 35 is $18,772 and for the easterly one is $986. Mr. McCullough has expressed interest in a scenario in which he would convey the parcels for an amount of roughly $750,000 while donating the remainder of the value, with the associated tax benefits. Mr. McCullough communicated that the property value is roughly $4.1 million and that he’d like to structure the donation, or the tax benefit, over 10 years. Furthermore, he would like to retain some interest in the billboard revenue for some period into the future. I advised Mr. McCullough that the Board of Managers would be required to review such a matter through the process laid out in in section 4.6.9 Land Acquisition and Management of the District’s Watershed Management Plan (WMP). He recognized that there would likely be a process and simply wanted to start the discussion. At first glance, considering the water resources and upland activities of the surrounding area, these parcels would seem to be of interest. It is important to note, though, that without some additional agreement, easement or acquisition of other similar property that is within the same hydrologic realm as these two parcels, the ability to complete any kind of restoration or to construct a project becomes unlikely. Also, of course, the District does not presently have a basis to value the property in question and we do not yet have a basis to determine whether the District’s and Mr. McCullough’s expectations may be similar. Mr. McCullough raised a similar proposition to the District in about 2012, but the matter did not proceed further. In addition to the parcel map of the properties, I have also included the two pages of the District’s Watershed Management Plan that refer to the process the Board is to reference when considering any land acquisitions. Recommended Action Staff recommends that the Board obtain a scope from EOR for a preliminary feasibility review of the parcels. Proposed Motion: Manager ____________ moves to direct staff to work with EOR to develop a scope for a preliminary feasibility review of the parcels. Seconded by Manager ____________.
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MEMORANDUM Comfort Lake-Forest Lake Watershed District
I recently received a phone call from Robert (Bob) McCullough who owns two parcels of land just south of the Bixby Park project site in Forest Lake. These parcels are zoned commercial but are almost entirely wetland. The westerly parcel has several billboards on it pursuant to a lease that generates an unknown amount of revenue. The anticipated 2109 property taxes for the westerly parcel that has a boundary with I-35 is $18,772 and for the easterly one is $986. Mr. McCullough has expressed interest in a scenario in which he would convey the parcels for an amount of roughly $750,000 while donating the remainder of the value, with the associated tax benefits. Mr. McCullough communicated that the property value is roughly $4.1 million and that he’d like to structure the donation, or the tax benefit, over 10 years. Furthermore, he would like to retain some interest in the billboard revenue for some period into the future. I advised Mr. McCullough that the Board of Managers would be required to review such a matter through the process laid out in in section 4.6.9 Land Acquisition and Management of the District’s Watershed Management Plan (WMP). He recognized that there would likely be a process and simply wanted to start the discussion. At first glance, considering the water resources and upland activities of the surrounding area, these parcels would seem to be of interest. It is important to note, though, that without some additional agreement, easement or acquisition of other similar property that is within the same hydrologic realm as these two parcels, the ability to complete any kind of restoration or to construct a project becomes unlikely. Also, of course, the District does not presently have a basis to value the property in question and we do not yet have a basis to determine whether the District’s and Mr. McCullough’s expectations may be similar. Mr. McCullough raised a similar proposition to the District in about 2012, but the matter did not proceed further. In addition to the parcel map of the properties, I have also included the two pages of the District’s Watershed Management Plan that refer to the process the Board is to reference when considering any land acquisitions. Recommended Action
Staff recommends that the Board obtain a scope from EOR for a preliminary feasibility review of the parcels. Proposed Motion: Manager ____________ moves to direct staff to work with EOR to develop a scope for a preliminary feasibility review of the parcels. Seconded by Manager ____________.
MEMORANDUM Comfort Lake-Forest Lake Watershed District
assessment) and the costs associated with the acquisition. Before committing funds
to acquire a fee or easement interest, the Board of Managers will consider the
following:
The potential suitability of the property for a capital project or other project identified in the Plan.
The potential for the land rights to facilitate the District’s pursuit of water quality, flood management or other water resource goals identified in the Plan, with respect to specific waterbodies or more generally.
The market value of the rights to be acquired, by means of appraisal or other valuation as the Board of Managers determines appropriate for the transaction.
The water resource value of the acquisition.
Consistency of the District’s acquisition with the city’s or township’s land use classification and plans and potential for collaboration on use of the property.
2012-2021 Comfort Lake-Forest Lake Watershed Management Plan (amended January 2018)
66b
The extent to which the water resource purposes of the acquisition may be achieved without the District’s spending public funds, due to physical, regulatory or similar constraints on use of the property.
Ongoing property management costs.
The District’s ability to dispose of its property interests if its potential use for a capital or other project fails to materialize.
This category also encompasses the District’s management of its fee and easement
interests. At the time the District acquires such an interest, it will prepare a plan
for natural resource management as well as general property management for
public safety and risk protection purposes. Resource management may involve
very little action or may involve demolition of existing structures, vegetation
management or other actions to maintain or enhance both the financial and the
natural resource value of the property. Spending for any action constituting a
capital project would occur only pursuant to the process requirements of Minnesota
Statutes chapter 103B and other applicable requirements.
Progress Evaluation Metric
Success in using this program will be judged by a qualitative assessment of how
the District has used it for cost-effective support of its capital and other projects
and in collaboration with its cities and towns in pursuit of complementary public
goals. Each year, the District administrator will report to the Board of Managers
on the implementation of management plans; carrying costs; and recommendations
for potential project siting, continued holding or disposition of District properties.
Potential Partners
Partners may include cites and townships within the District as well as
Washington and Chisago Counties.
Potential Funding Sources
The District expects to fund activities under this program area through its annual
ad valorem levy on the basis of annual budgeting of funds for potential
acquisitions. Collaboration with other units of government may supply funds and
if necessary the Board of Managers may consider financing acquisitions through
