|
Item 1.E.
|
| City Council Regular | |
| Date: | 10/25/2021 |
| Title: | Sale of Airport Land to NorthWestern Energy |
| Presented by: | Kevin Ploehn, Director of Aviation and Transit |
| Department: | Airport |
| Presentation: | No |
RECOMMENDATION
Staff recommends the City Council approve the sale of the 14.7 acres of Airport land to NorthWestern Energy (NWE) for use as a substation location for the price of $223,000, authorizing the Mayor to sign an Agreement to Buy and Sell the property and to execute all final closing documents at a future date. Sale is contingent on approval from the Federal Aviation Administration (FAA) releasing the land for disposal, as well as releasing the associated Grant Assurances that run with the land.
BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)
The Airport's property extends about a third of the way down Airport Road toward the Billings Heights on the south side of the roadway and abuts the existing NWE Rimrock Substation. The Airport's property was purchased with FAA funding assistance to provide runway approach protection. NWE has contacted the Airport about purchasing approximately 14.7 acres on the very east end of this area to rebuild and expand the Rimrock Substation to accommodate a new planned 230 kV power feed coming into the Billings area. Additionally, NWE needs to replace the existing 60-year-old substation, which will stabilize and expand the electrical power needs for the Billings area well into the future. In discussions with the FAA, it was determined that the FAA would consider releasing the land for disposal because the construction of a substation on this property would still meet the intent of protecting the approach to the Airport, mainly because it is almost always unoccupied.
After numerous discussions between staff, NWE, and City Council, NWE has agreed to include the following items in a Post-Closing Agreement, which is attached as part of the Agreement to Buy and Sell:
After numerous discussions between staff, NWE, and City Council, NWE has agreed to include the following items in a Post-Closing Agreement, which is attached as part of the Agreement to Buy and Sell:
- Provide a 10 foot high, textured, and colored wall around the substation area with the color and texture to be approved by the City.
- Provide a 5 foot berm on the highway side of the substation.
- Work with City on acceptable landscaping on the east and north perimeter wall areas.
- Deed to the City, 2.2 acres from COS 190, which is located directly south of the existing Rimrock Substation.
- When the substation construction is complete, pave and stripe a portion of the deeded 2.2 acres for a parking area, to include 20 stalls and a new paved approach to Black Otter Trail.
- Provide a zero dollar Right of First Refusal to re-acquire the land should NWE no longer need it.
- Provide a Perpetual Air Rights Easement over the area.
ALTERNATIVES
City Council may:
- Approve the contingent sale and transfer of the Airport land to NWE based on the terms contained in the Agreement to Buy and Sell, the attached Warranty Deed, and Post-Closing Agreement all contingent on the FAA providing a release of the property for disposal and a release of the AIP grant assurances on said parcel; or
- Not approve the sale and transfer of the Airport land to NWE and provide staff and NWE with direction on how to proceed to accomplish the sale, and delay the approval of the land sale to a future date pending the implementation of Council's direction.
FISCAL EFFECTS
The appraised value and price for the land is $223,000. With the sale of the land, the $223,000 will be provided to the Airport where 90% will be returned to the FAA and the Airport will keep 10% or $22,300. The $200,700 sent to the FAA will go into the Airport's grant account and will be available to use as grant funds for Airport development in the future, most likely the Airport's Terminal Expansion project.