Fergus Falls, Minnesota Friday, December 22, 2006
More than just a dollar, city must maintain RTC
By Susan M.A. Larson
Taking over five Regional Treatment Center buildings will not be as simple as the city handing over a dollar to the state, City Administrator Mark Sievert said.
An agreement struck between the state and city will require the city to maintain, insure and secure the buildings and pay closing costs. The state will be on the hook for heat, electricity, more than $2 million dollars to the city for costs associated with the RTC incinerator, and up to $3 million set aside for demolition.
“This is the perfect solution for all of us,” Wayne Waslaski, planning director with the Minnesota Department of Administration, said. “After the chemical dependency unit is relocated, all state programs will be off the campus and those will just be surplus buildings the state no longer needs to run.”
Hawthorne Development, Fargo, is interested in the nurses cottage for multi-unit housing/condominiums. Jeff Schlossman Investments, Fargo, is interested in the buildings formerly occupied by the Department of Human Services, the Fergus Falls School District, Early Childhood Family Education and Catholic Charities for use as office buildings.The developers will have an appraisal done on the structures, which is necessary for them to take title.
“That is the first set of numbers they need,” Sievert said. “After that, they can determine if the numbers are going to work,”
A sale between the city and the developers could be complete by the first half of 2007, he said.
Under the agreement:
By Jan. 12, the city will purchase parcel A (the nurses cottage) and parcel B (the other four buildings on the east side of the campus) for $1 by way of quit-claim deed.
“A quit-claim deed is just a simple way to transfer a title to a property,” Sievert said.
Property will be sold as-is. Prior to the closing date, if any or all property is destroyed, the state will not be required to make repairs.
The city will pay all closing costs.
“When we get (the buildings) from the state, the city will pay closing costs, like any real estate transaction,” Sievert said. “I have no idea how much it’s going to be, but since we’re not getting an actual mortgage, it won’t be quite as costly. But there will be recorder’s fees and things like that.”
That money will be taken out of the general fund.
“Of course, we’re going to do all we can to minimize costs,” he said.
The city will insure the property.
“We’ve talked with our insurance carrier and added the five structures to the list of buildings already on the city policy. The additional premium will cost $2,900 a year.
Security will be the responsibility of the city.
That task will not create any additional cost for the city, Sievert said, as the Friends of the Kirkbride volunteers, city staff and law enforcement will take care of security. For the volunteers, a checklist is being developed that they will recieve when picking up a key to the buildings.
Heat will be paid by the state until April 30 and electricity until May 31.
“We shouldn’t need to heat (the buildings) after that,” Sievert said. “Evern if we’re still working on selling it.”
If the city does not provide written notice of intent to acquire all of the RTC property by May 25, the demolition process can begin, excluding the five structures already spoken for.
If parcels A and B are not developed, demolition will proceed.
“We don’t know exactly when they will be torn down,” Sievert said. “You just don’t take down the buildings the next day; it’s a big project.”
Also under the agreement, the city will receive $1,760,000 for bonds it has incurred related to the RTC incinerator project; $400,000 for demolition of the incinerator; $447,000 reimbursement the city used of its own money for improvements to the RTC incinerator; and demolition funds.
“Over the last three years, we’ve put a plan in place to find a reuse for the RTC and this was part of the process,” Waslaski said. “I think this is a good solution for all parties. It lays the groundwork for the next phase of plans for the Kirkbride itself.”