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Council continues to deliberate quarry sale

Thursday, October 23, 2014 by Elizabeth Pagano

The proposed sale of a northwest quarry continues to inspire debate among City Council members. At Tuesday’s work session, the revelation that proceeds from the sale would go to a struggling water utility complicated an already-nuanced discussion about the relative merits of the city’s options.

Today, Council will vote on whether or not to sell the nearly 215 acres of land at 15700 Anderson Mill Road to the city of Cedar Park for $4.1 million.

The last time the full Council considered the sale to Cedar Park for $4.1 million, a representative from the current tenant, Ranger Excavating, offered to buy the land for $5 million, on the spot, in a dramatic flourish. That offer sent the item back to Council’s Audit and Finance Committee for further scrutiny. The committee voted to proceed with the sale to Cedar Park.

Since then, the city’s Real Estate Office Director Lorraine Rizer has explained that before the public offer, offers to buy the land from Ranger were “always in the million-dollar range.”

The city bought the land in 1987 for the Austin Water Utility. Proceeds from the sale will go back to the water utility, raising yet another issue for some Council members.

Council Member Mike Martinez said that, while he appreciated the desire to be good neighbors with Cedar Park, he did not know how he could explain raising water rates and not opening up the bidding process, which could, potentially, get more money for the utility and reduce rate impacts. AWU is currently facing a budget shortfall and has proposed rate increases.

“I just want to explain that we did everything we could to scrub our water utility budget because of the $30 million shortfall that we were facing,” said Martinez. “Here we are with an opportunity to have a more positive impact on the bottom line of the water utility.”

Council Member Laura Morrison pointed out that the decision was not strictly financial.

“Obviously, we are all concerned with our ratepayers and the cost to the utility. I think that, from my point of view, it’s not clear at all that there would be a difference of $900,000,” said Morrison, who added that it was “very hard to put a dollar amount” on the benefit of selling it to Cedar Park.

“I continue to believe that it would be appropriate to go forward with the sale to Cedar Park, especially if we can take into account environmental issues,” said Morrison. “In terms of being able to serve the public interest and the interests of the region, I think it makes sense.”

“We have to make these decisions, left and right, all the time, for what is in the public interest,” she continued. “I do think it’s a fair question.”

Council Member Bill Spelman noted that the $5 million offer was, “at most, a rhetorical statement,” because the city could not accept the offer without opening the bidding process on the property.

Spelman hypothesized that Ranger could now bid “$4.1001 million” if allowed to bid on the process.

“We’re certainly not guaranteeing the city $900,000,” Spelman said. “All we would do was guarantee the city one dollar more than the next-highest bidder.”

“I’ll vote to sell it to Cedar Park if they do that to us,” said Martinez.

If Council members vote to open the bidding process, the city has the option of taking the highest bid, or rejecting all bids. It could still sell to Cedar Park. Rizer pointed out that it was hard for governmental entities to engage in closed bidding processes. It would be possible to engage in a bidding process, then approach the city with a new valuation, however.

Attorney Dowe Gullatt, who was representing Ranger Excavating, said its offer was genuine.

Gullatt said the offer was “pretty clear” and that Ranger had been interested in the property for a number of years. He said the company had never made a formal offer in the past and pointed out that the $1 million figure was determined in a three-year-old independent appraisal and based on the value of the “residual rock on the property.”

Gullatt added that he was told that Ranger could not make an offer, because there was not a bidding process.

Cedar Park City Manager Brenda Eivens said that purchase of the quarry had been a topic of discussion throughout the 19 years she has worked for Cedar Park. That discussion focused on establishing a timeline for stopping the quarry operations, which the city sees as incompatible with nearby development.

Eivens explained that Cedar Park had been working for “many months” on the purchase. She said that its city council was prepared to enact the contract and was waiting on the go-ahead from Austin.

“Our long-term plan is obviously to have some development that is compatible with the growth that has happened in the region,” said Eivens, who pointed out that the road that runs through the quarry is a major artery in the region and could use improvements. She said that although the city was prepared to make an investment in those improvements, the impact of heavy truck traffic on the road was a concern.

Eivens said the city was contemplating mixed-use development and parkland on the site.

Austin Water Utility Assistant Director David Juarez said he was looking at it as getting $4.1 million that AWU did not currently have and agreed with the Real Estate Office recommendation to move forward with the sale to Cedar Park. AWU does not have a formal recommendation about the sale.

“Certainly, we would like to see something more than $4.1 million,” said Juarez. “At this point, we just need to be sure that the sale occurs. We did program that amount into our forecast, so it’s incumbent upon us to make some decision on the sale of this property.”

Though Council Member Kathie Tovo said that she, too, was concerned with getting the most money for AWU, she noted the last-minute purchase offer from Ranger was “so, so out of whack” with prior offers. In light of that, Tovo called the extra $900,000 from Ranger a “hope based on an unfounded assumption.”

 

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