The City Commission agreed this morning to pay approximately $4.6 million to acquire four properties condemned as part of the south end redevelopment project.
"We're here today asking for authority to pay those amounts," said city attorney Bill Frost during a special meeting called to meet the July 1 deadline for acquisition of the properties. The appraisers' report on the properties was filed in court Thursday.
The $4.6 million is 125 percent of the total $3.7 million value of the four properties as determined by the appraisers. It also includes their fee. The city plans to write a check to the clerk of Riley County District Court today. The money is to come from reserve funds, until the city issues special obligation tax increment finance (TIF) bonds to pay back the money, probably within 10 to 15 days, said finance director Bernie Hayen.
By far the largest appraisal was $3,200,000 on the Manhattan Ice and Cold Storage property at 207 Yuma. Other individual property owners, occupants and appraised values were: Dean Conkwright, Bud's Auto Service, 301 Colorado, $265,000; Mr. and Mrs. Bernard Garibay, M-F Welding, 211 Colorado, $120,000; and Art Craft Printers, Little Apple Antiques, 339 Colorado, $133,000.
Commissioner Bob Strawn had earlier voted against issuing bonds to acquire the four properties, and he opposed the south end in general. But Strawn said this morning that he wasn't going to be an obstructionist. "I'm going to vote in favor of this," he said. "From my point of view, it's time to move on."
The city pays 25 percent more than the appraised value of properties in the south end because they fall within the sales tax and revenue (STAR) bond district.
Frost said the appraisers' determinations of value on the properties did not "significantly" differ from those arrived at by the city. He said they were "either very close to what Dial offered or slightly less."
The eminent domain process officially began for the city in April when it filed a petition in Riley County District Court seeking authority to condemn the four properties.
This action was necessary because the Kansas Legislature amended the state's eminent domain law in 2006, giving municipalities until July 1 to condemn property for economic development purposes and transfer it to a private entity, such as Dial Realty in the case of Manhattan.
Judge Paul Miller granted condemnation authority to the city May 9. He went on to appoint the three property appraisers — Loren Pepperd, Calvin Emig and Linn Parry — May 18.
They held hearings to determine the properties' worth June 21 and subsequently submitted award amounts to the court.
Pam Conkwright of Bud's Auto Service voiced frustration over how much money the court-ordered appraisers said her business is worth, saying the dollar amount is lower than the company's tax appraisal.
"It's awful hard for me to understand how they can they tax us on one level and tell us our property is worth less," Conkwright said.
Frost said the property owners can still formally challenge or appeal the award amounts determined by the appraisers and ask for a trial. The city, in turn, could appeal that court decision and seek a lesser amount.
Once the city has the title to the properties, property owners have 90 days to vacate the buildings, though Frost said the city probably would let the tenants stay longer.
Mayor Tom Phillips said he believed the use of eminent domain was necessary.
"I didn't like anything about it," commissioner Bruce Snead said about eminent domain, but he said the timeline the city was under to develop the south end warranted its use. He said downtown planning has and continues to "try the patience of the community."
Commissioner Mark Hatesohl said the south end wasn't going to benefit everybody right away, but he hoped it would over the long-haul. He regretted that "skyrocketing commercial real estate prices" had caused hardships for south end businesses looking to relocate.
Commissioner Jim Sherows said, "we're setting a very important foundation for the future in trying to move our community into the 21st Century."
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