Staff recommends City Council hold a public hearing and conditionally approve the vacation of a portion of 12th Avenue North and North Side Addition 3rd Filing, Block 9 alley.

The Sisters of Charity of Leavenworth Health System, Inc. (SCL Health - Montana) is proposing to construct a replacement hospital.  The new hospital will be located between 11th Avenue North and Poly Drive along North 27th Street.  In order to construct the hospital in this location, SCL Health -  Montana is requesting that the City vacate 12th Avenue North between North 27th Street and North Broadway and the alley within Block 9, North Side Addition 3rd Filing.  SCL Health - Montana has submitted a traffic impact study (TIS) showing how the impacts of the new hospital will be mitigated along with the vacation and closure of a portion of 12th Avenue North.  Staff has reviewed the traffic study and determined that there would be minimal impacts to the surrounding streets and intersections due to the closure of 12th Avenue North that cannot be mitigated.  Mitigation requirements will be determined by the City at the time of site development.  There are existing water, sanitary sewer, and storm drain utilities located in 12th Avenue North and within the Northside Addition, 3rd Filing Block 9 alley.  All of these utilities will be re-located by SCL Health - Montana prior to constructing the new hospital.  Attached is the resolution to vacate, that includes a map showing the right-of-way to be vacated.  Attached are comments from the Fire Department, Police Department, and the Transit Department.

This application was presented to the Public Works Board on July 27, 2022 by SCL Health - Montana.  The Public Works board reviewed and submitted a letter of recommendation of approval to the City Council attached herein.

The total area proposed to be vacated is 35,225 square feet.  Mike Walker with NAI Business Properties performed a cost analysis, including comparable sales, in accordance with Administrative Order #56 Section 2 (attached) to determine the value of the right-of-way proposed to be vacated.  Mr. Walker estimated the value of the property to be $29.76 per square foot.  The total value of the property is $1,048,296.00.  The opinion of cost is attached.  

SCL Health - Montana requests that the City Council conditionally vacate this right-of-way.  SCL Health - Montana requests that payment for the right-of-way and the recording of the resolution be delayed until the time of building permit application.  SCL Health - Montana's intent is to submit for a building permit within one to two years of this Council action.  If approved, staff recommends the conditional approval expire 5 years from the date of conditional approval. Until such time as the payment is received and the resolution is recorded, 12th Avenue North and the Block 9 alley will remain open and public.  The expiration of conditional approval allows the City to continue ownership and use of the right-of-way should a hospital not be constructed.  

City Council may:

• Conditionally approve the rights-of-way vacation; or,
• Not approve the rights-of-way vacation.  If not approved, SCL Health - Montana will have to re-design the proposed replacement hospital.  

The total value of the property, as established by NAI Business Properties, is $1,048,296.00.  SCL Health - Montana would be responsible for payment to the City prior to recording the resolution.