ITEM TITLE:
#21-09 - Approval to Sell by Negotiation a 200 Acre Parcel of City Owned Land Within ASLS 79-116 to Valdez Property Co, LLC.
SUBMITTED BY: Paul Nylund - Senior Planner/GIS Technician
FISCAL NOTES:
Expenditure Required: N/A
Unencumbered Balance: N/A
Funding Source: N/A
RECOMMENDATION:
Before approving this resolution, City Council must determine whether or not a sale by auction or bid for this parcel is in the public’s best interest.
Staff does not recommend approval of a negotiated sale of this land at this time for the following reasons:
1. Staff recommends that land sales in this area are conducted via public sale by sealed bid or auction, unless further evidence is provided that a negotiated sale is in the public’s best interest. Council may, per VMC 4.04.040, establish development requirements for property sold via public auction or sealed bid.
2. The city is currently developing a much-needed Comprehensive Plan revision and its scope will include future land use in this area.
3. The proposed development is not in conformance with the current Comprehensive Plan and there is no master plan for the area. It is zoned Heavy Industrial, and the proposed residential and commercial development is not compatible use with the current zoning designation.
4. There is no platted access to this location. The area is currently accessed over a four-wheel-drive trail. Development of an access road will require large capital investment. The City of Valdez is in the process of selecting a contractor to complete a study to determine the best route for access to this area. The study is expected to be completed in the summer of 2021.
5. No development plan or feasibility study of the proposed development has been submitted.
At their regular public meeting on October 28th, 2020, the Planning and Zoning Commission did not approve a recommendation to Council in favor of selling this property. The vote was as follows: 2 yeas, 2 nays, 1 recused, 2 absent.
SUMMARY STATEMENT:
Valdez Property Co, LLC has submitted an application for purchase of 200 acres of city owned land (via negotiated sale) located in Townships 8 and 9S, Range 5W, Copper River Meridian. Also described as Tract B ASLS 79-116 (plat #2019-11).
In their application, Valdez Property Co, LLC stated that their intent is to develop residential and commercial property in conjunction with proposed adjacent development, while citing the need for housing in Valdez. The applicants stated that they intend to pay the fair market value for the property. The application refers to the 200 acres adjacent to the property under consideration, which were previously sold to another party. It is the applicant’s view that this was an endorsement of development in the area. The applicant also provided a detailed narrative and maps (attached).
Two sales of city property have occurred in this area over the last 13 years, and both were sold to Rydor Enterprises, LLC. The City of Valdez sold 100 acres to them in 2007, with their intent to develop a base area for a mountain recreation project. They purchased an additional 100 acres adjacent to the original purchase in 2019 in order to “expand both the residential and commercial possibilities of the mountain recreation facility.” The City of Valdez has advised Rydor Enterprises LLC that future applications for development in this area will have a better path forward following the adoption of a new Comprehensive Plan and subsequent modifications to Title 17 of the Valdez Municipal Code.
Requirements for Negotiated Sale
VMC 4.04.070 states that should the city council decide that the disposal of real property or any interest therein at public sale is not in the public interest, the city council may authorize the city manager to negotiate a sale of such real property or interest therein and shall prescribe the terms therefor. Such authority shall be provided by resolution, passed by not less than six affirmative votes of the city council.
Planning Considerations
While the recommendation made by staff is focused on the determination of whether or not the negotiated sale of this property is in the public interest, and a public sale is not, there are other aspects of this proposed land sale that should be considered before transferring public land into private hands.
First, the requested use is not compatible with the city’s current Comprehensive Plan. The forthcoming revised Comprehensive Plan will help determine future uses for this area and make recommendations for the prioritization of city resources.
The 2008 Valdez Comprehensive Plan, Section 2.5.1.1 - Residential Land Use states that “the city will encourage "in-filling" in residential areas presently served by existing utility services as a means to maximize its investment in, and use of, the existing utilities before it takes on any additional or unnecessary expenditures for such.”
The 2008 Valdez Comprehensive Plan, Section 2.5.1.2 - Commercial Land Use states that “the suggested commercial/business land use planning component suggests the major retail, office, governmental, and tourist accommodations continue to be limited to and concentrated in the Central Business District/ Boat Harbor area.”
Access Issues
Providing access to this area is an ongoing issue that should be addressed before further development proceeds. The access routes that have been proposed would require costly infrastructure improvements for either a bridge crossing the Valdez Glacier Stream or establishing a suitable roadway connection to the Richardson Highway. Since the City of Valdez is the primary owner of the surrounding property and the applicant has expressed desire to partner with the city on improvements, the potential for such obligations should be studied and considered alongside other Capital Improvement Projects.
The City is currently working to conduct an access study to determine the best route for access to this area, but has not made any commitments regarding the design or development of infrastructure to increase access to the private property in the area. There are areas of flood hazard within the area of this proposed land sale (see attached Floodplain Determination), and this should be taken into consideration when establishing access. Any development within the special flood hazard area (SFHA) will require hydrologic study.
If the City Council chooses to grant approval of negotiated sale of this property, this access issue should be addressed before the land is subdivided. The most recent subdivision of 100 acres of ASLS 79-116 required a waiver of the physical access requirement in order for the plat to be approved by the Planning & Zoning Commission. There is also concern that if we sell off more property before this right-of-way is formally established, it could limit the possible road placement options.
Zoning Considerations
ASLS 79-116 contains large tracts of city-owned land and supports a wide variety of uses, including outdoor recreation, shooting ranges, gravel extraction, and the city landfill. Most of the area is zoned as Heavy Industrial, and some of the existing and proposed uses are not permitted in this zoning district. The Comprehensive Plan revision will consider changes to future land uses for the area and provide guidelines for future rezoning. Any future development plans or area plans should be in conformance with the forthcoming Comprehensive Plan.
Conclusion
The approval of this resolution by Council rests heavily on whether or not it is determined that the disposal of this property via a public sale (auction or sealed bid) is not in the public interest. When looking at a negotiated sale, it is important to consider if the property would be useable or desirable to any other parties, and whether it is appropriate for the transaction to only be discussed between the City and the applicant.