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Item No. 23 <br />memorandum <br />TO: City Council <br />John Godwin, City Manager <br />FROM: Gene Anderson, Finance Director <br />SUBJECT: SALE OF CITY PROPERTY <br />DATE: January 22, 2016 <br />BACKGROUND: The City Council directed the City staff to auction off City property located <br />at 811 Bonham Street (old Police building) and 616 W. Washington (old Health Department <br />building). The Health Department building is jointly owned by the City and County. The County <br />is agreeable to the sale of the property. Rene Bates Auctioneers was contacted about the <br />information necessary to auction the property. <br />STATUS OF ISSUE: City staff has produced the required contracts for sale, provided an aerial <br />map, and has obtained updated surveys from Chaney Engineering showing all easements and <br />improvements on the property. The legal descriptions may need to be updated based on the <br />recent survey. Deeds for the properties have also been located. <br />Serious asbestos problems exist in both buildings. In the interest of full disclosure to potential <br />bidders, the extent of the asbestos contamination and related costs to abate and /or demolish the <br />buildings needed to be determined. Both buildings have had abatement inspections, and the staff <br />has received estimates on the cost of abatement and demolition. <br />While I have confidence that the demolition estimates are reasonably accurate, I am less <br />confident in the abatement estimates because abatement firms don't want to invest a lot of time <br />and expense in providing a tight estimate unless they know the City is serious about having the <br />work done. So, the abatement amounts are probably high. If the City formally went out for bids <br />with the intent of having the work performed, I believe the bids would come in lower than the <br />estimates provided to us. The estimates provided to us were as follows: <br />Heath Department Building- $68,000 for abatement and $25,000 to $30,000 for demolition. <br />Police Building- $225,000 for abatement and $75,000 to $100,000 for demolition. <br />Even with formal bids, I would expect abatement to cost at least $48,500 for the Health <br />Department and $160,000 for the Police Building. The City staff requests direction from the City <br />Council on this matter. <br />BUDGET: Money has not been budgeted for these projects. <br />RECOMMENDATION: Direction sought from City Council <br />