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