| ITEM #: 9. DATE: 06/24/2024 AI #:2107 |
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CITY COUNCIL ACTION REPORT
| SUBJECT: | ACQUISITION OF RIGHT-OF-WAY FOR SARIVAL AVENUE IMPROVEMENTS |
| STAFF PRESENTER(S): | Kimberly Romero, Real Estate Coordinator |
SUMMARY
Approving agreements for a pass-through transaction that allows the City to acquire right-of-way from ADOT for the construction improvements to Sarival Avenue needed to provide Liberty Utilities (Litchfield Park Water & Sewer) Corporation (“Liberty”) access to the wastewater treatment facility Liberty is constructing.
STRATEGIC PLAN ALIGNMENT
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RECOMMENDATION
ADOPT RESOLUTION NO. 2024-2411 APPROVING AGREEMENTS RELATED TO THE CITY’S ACQUISITION OF RIGHT-OF-WAY FROM ADOT, PROVIDING CONDITIONS FOR THE EXECUTION OF THE AGREEMENTS, PROVIDING FOR AUTHORIZATION, DIRECTION, AND AN EFFECTIVE DATE . (Kimberly Romero, Real Estate Coordinator)
FISCAL IMPACT
There is no fiscal impact to the City as this is a pass-through agreement with Liberty Utilities (Litchfield Park Water & Sewer) Corporation (“Liberty") funding all of the costs of the City’s acquisition of right-of-way needed for the construction of improvements to provide access from Sarival Road to the wastewater treatment facility Liberty is constructing. There are indirect fiscal impacts to the City in that the completion of the wastewater treatment facility will generate sales tax revenues associated with the construction project and will facilitate development within Liberty’s service area, thereby generating additional sales tax revenues associated with such development.
BACKGROUND AND PREVIOUS ACTIONS
Liberty Utilities (Litchfield Park Water & Sewer) Corporation (formerly known as Litchfield Park Service Company) (“Liberty”) is a public service corporation authorized by the Arizona Corporation Commission ("Commission") to provide water and wastewater services within Liberty’s Certificate of Convenience and Necessity (“CC&N”) as approved by the Commission in the vicinity of Goodyear’s corporate boundaries. Liberty is in the process of developing wastewater treatment facilities on property it owns as legally described in the Special Warranty Deed recorded in the official records of the Maricopa County Recorder as Instrument 2004-0873634, and on property that is currently owned by its affiliated company, Liberty Utilities (Sub) Corp. as legally described in the Special Warranty Deed recorded in the official records of Maricopa County Recorder as Instrument 2009-0869166 (collectively the “Liberty Property”).
The Liberty Property is generally located south of McDowell Road, north of I-10 and the controlled access road, and West of N. Sarival Avenue. Because of an existing canal that separates the Liberty Property from McDowell Road, and because the Liberty Property cannot be accessed from the adjacent controlled access road, the only access to the Liberty Property is from N. Sarival Avenue, across property owned by the State of Arizona through the Arizona Department of Transportation (the “ADOT Property”). Accessing the Liberty Property from N. Sarival Avenue requires the construction of certain road improvements along the west side of N. Sarival Avenue within approximately 1312 square feet of the ADOT Property (the “Right-of-Way”) and an access easement over the ADOT Property.
Liberty has acquired an access easement over the ADOT Property but has not acquired the Right-of-Way. Because the road improvements are needed solely to support the development of the Liberty Property, Liberty is responsible for acquiring the property needed for the improvements. But, because of the rules for disposing of state-owned property, Liberty’s acquisition of the Right-of-Way is not feasible. ADOT does, however, have the ability to sell the Right-of-Way to the City for the cost ADOT paid to acquire the Right-of-Way, because the property is needed for a public purpose. Liberty has asked the City to acquire the Right-of-Way subject to Liberty paying all costs associated with the transaction, including all closing costs.
The Liberty Property is generally located south of McDowell Road, north of I-10 and the controlled access road, and West of N. Sarival Avenue. Because of an existing canal that separates the Liberty Property from McDowell Road, and because the Liberty Property cannot be accessed from the adjacent controlled access road, the only access to the Liberty Property is from N. Sarival Avenue, across property owned by the State of Arizona through the Arizona Department of Transportation (the “ADOT Property”). Accessing the Liberty Property from N. Sarival Avenue requires the construction of certain road improvements along the west side of N. Sarival Avenue within approximately 1312 square feet of the ADOT Property (the “Right-of-Way”) and an access easement over the ADOT Property.
Liberty has acquired an access easement over the ADOT Property but has not acquired the Right-of-Way. Because the road improvements are needed solely to support the development of the Liberty Property, Liberty is responsible for acquiring the property needed for the improvements. But, because of the rules for disposing of state-owned property, Liberty’s acquisition of the Right-of-Way is not feasible. ADOT does, however, have the ability to sell the Right-of-Way to the City for the cost ADOT paid to acquire the Right-of-Way, because the property is needed for a public purpose. Liberty has asked the City to acquire the Right-of-Way subject to Liberty paying all costs associated with the transaction, including all closing costs.
STAFF ANALYSIS
The proposed transaction is a pass-through agreement whereby Liberty provides the funds for the City’s acquisition of the Right-of-Way for the improvements to Sarival Avenue required for Liberty to access the wastewater treatment facility Liberty is constructing. It involves an agreement with Liberty, which obligates Liberty to provide the city with the funds (the purchase prices and all closing costs) needed to consummate the acquisition, and an agreement with ADOT, pursuant to which the City will acquire the Right-of-Way from ADOT. Under the terms of the Liberty agreement, the City will not enter into the purchase agreement with ADOT until it receives the purchase price and the estimated closing costs. If the funding is not received by the City within thirty (30) days of the effective date of the Liberty agreement, the agreement automatically terminates that the City will not enter into the purchase agreement with ADOT. To ensure the City receives all closing costs, the Liberty agreement requires Liberty to pay the difference between the actual funding costs and the estimated costs, or the City will withhold the certificates of occupancy that Liberty needs to operate its wastewater treatment facility.
Staff supports this transaction as there is no fiscal impact to the City and allows for Liberty to access and operate the wastewater treatment facility Liberty is constructing.
Staff supports this transaction as there is no fiscal impact to the City and allows for Liberty to access and operate the wastewater treatment facility Liberty is constructing.