Riverstone Health has petitioned to vacate a portion of the alley within Block 163 of Billings Original Townsite.  The alley is located between South 26th Street and South 27th Street and 2nd Avenue South and 3rd and Avenue South.  Riverstone Health is proposing to construct a new building over the alley.  There is a sanitary sewer line in the alley which only serves Riverstone Health and could be turned into a private service.  Riverstone is working with the private utilities on easements or relocation.  The right of way area proposed to be vacated is 3,000 square feet.

The Council may:

• After holding a public hearing, approve the vacation of the above-mentioned right-of-way at no cost; or
• After holding a public hearing, approve the vacation of the above-mentioned right-of-way at a cost of $10,650; or
• After holding a public hearing, approve the vacation of the above-mentioned right-of-way at a cost of $15,000; or
• After holding a public hearing, do not approve the vacation of the right of way.

The petitioners have submitted a letter establishing fair market value at $3.55/sf for a total value of $10,650.  The methodology is detailed in the letter.  In 2011, the City sold Riverstone Health four (4) lots that are in the vicinity of this alley vacation.  Sealed bids were submitted by three parties at that time and the City Council approved selling the 14,000 sq ft of land to RiverStone for $70,000, or $5/sq ft.  Applying that price to this property equals a total value of $15,000.  The petitioner is requesting that the land be donated at no cost for reasons outlined in the letter.

Staff recommends that the City Council conduct a public hearing and approve vacating  the alley within block 163 of Billings Original Townsite for the cost of $15,000.