MINUTES OF THE BOARD OF COMMISSIONERS' SPECIAL MEETING

LANSING BOARD OF WATER AND LIGHT

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Tuesday, May 14, 2002

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The Board of Commissioners met in Special Session in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan.

Chairperson Callen called the meeting to order at 5:40 p.m.  He announced that the purpose of the special meeting was to consider the sale of Board of Water and Light-owned property at 312 North Grand Avenue.

The Secretary declared a quorum present.

PUBLIC COMMENTS

THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW, OR AT THE END OF THE MEETING.

No persons spoke.

Sale of Property at Grand Avenue

and Shiawassee Street

General Manager Pandy submitted a proposal for the sale of the Board of Water and Light property north of the Ottawa Power Station.  The property is situated on the corner of Grand Avenue and Shiawassee Street.  The sale of this property has been prompted by the pending sale of a parcel known as the “Triangle Property” at the corner of Kalamazoo and Grand Avenue owned by the City of Lansing.  Developer Joel Ferguson has negotiated a deal with the State of Michigan to build a large office building to house the Michigan State Police and the Michigan Department of Military Affairs at the Triangle site.  As a condition to selling the Triangle property to Mr. Ferguson, the City required that he also build a new residential development downtown.  The Board of Water site at 312 North Grand includes approximately 3.5 acres of land bordered by Shiawassee Street, Grand Avenue and the Grand River.  A fact sheet summarizing the transaction was reviewed.

General Manager Pandy  handed out a letter addressed to Patrick Reid, Attorney, River Street Triangle, L.L.C., dated May 14, 2002 that outlines four revisions to the proposed Agreement to Sell between the Board of Water and Light and River Street Triangle, L.L.C. (Triangle).

Developer Joel Ferguson and Attorney Patrick Reid addressed the Board on one remaining issue to be negotiated relative to utility services referenced in Section 304 of the Agreement.  Mr. Ferguson stated that he could not commit to purchase chilled water utility services for the Triangle property located on the corner of Kalamazoo Street and Grand Avenue.  He told the Board that the decision to take chilled water services should be left to the third party, which is the State of Michigan who will be leasing the property.   He stated that he has agreed to take electric, water, steam and chilled water utility services for the property reserved for the high rise residential housing to be located at 312 North Grand Avenue.

In response to Mr. Ferguson’s position on the issue, Mr. Pandy reported that the State of Michigan has decided in other situations involving State buildings to not be in the utility business.  He added that BWL rates are competitive and it would be a good deal for the State.  Following discussion, the Board considered the following resolution:

Sale of Real Estate at 312 North Grand Avenue

(Resolution 2002-5-1)

RESOLVED, That the parcel legally described as follows is no longer needed for the operation of the Board of Water and Light:

Parcel “A” (Phase I Site)

A part of the parcel surveyed and described in L. 5, PP. 608-610 of Ingham County Certified Survey Maps, said part of said surveyed parcel being particularly described as follows: Beginning at the southeast corner of the intersection of N. Grand Avenue and E. Shiawassee Street, said Point of Beginning now marked by a chiseled “x” in the concrete sidewalk; thence along the south line of E. Shiawassee Street (82.5 ft. wide) S 89°58’00” E 221.35 ft.; thence along a line that is 25 ft., more or less, westerly of and parallel to the concrete retaining wall on the west side of the Grand River the following four (4) courses: S 45°00’36” E 56.87 ft.; S 07°00’36” E 173.29 ft.; S 17°19’58” E 75.72 ft.; S 01°08’14” E 11.78 ft.; thence along the centerline of a common party wall and it’s extension N 89°58’00” W 305.60 ft. to a point on the east line of N. Grand Avenue (82.5 ft. wide); thence along the east line of N. Grand Avenue N 00°01’02” E 296.21 ft. to the Point of Beginning (a chiseled “x” in the concrete sidewalk), being on part of Block 66 of the Original Plat of Lansing, L. 2, PP. 36-38 of Ingham County Deeds, and containing 81,363 sq. ft. or 1.8678 acres of land, more or less, and subject to easements and restrictions.

Parcel “B” (Phase II Site)

A part of the parcel surveyed and described in L. 5, PP. 608-610 of Ingham County Certified Survey Maps, said part of said surveyed parcel being particularly described as follows: Beginning at a point on the centerline of vacated E. Ionia Street at a point that is 67.07 ft. easterly of the east line of N. Grand Avenue (82.50 ft. wide); thence along the centerline of vacated E. Ionia Street Due East 22.02 ft. (said street vacation evidenced by the document recorded in L. 1378, P. 805 of Ingham County deeds); thence N 50°05’10” E 157.52 ft. to a survey iron with i.d. cap #30897; thence N 00°30’33” E 39.82 ft. to a survey iron with i.d. cap #30897; thence easterly on the extension of a common party wall that is west of this location S 89°58’00” E 95.24 ft.; thence along a line that is 25 ft., more or less, westerly of and parallel to the concrete retaining wall on the west side of the Grand River S 01°08’14” E 292.13 ft.; thence along a line 30.00 ft. northerly of and parallel to the brick Ottawa Station northerly wall N 89°58’55” W 244.01 ft. to a point that is 30.00 ft. easterly of the east side of the architectural facade of the City of Lansing’s “North Grand Avenue Parking Ramp”; thence along a line 30.00 ft. easterly of and parallel to the east side of the parking ramp facade N 00°05’02” W 151.16 ft. to the Point of Beginning, being on parts of Blocks 66 & 98 and vacated E. Ionia Street in the Original Plat of Lansing, L. 2, PP. 36-38 of Ingham County, Michigan Deeds, containing 56,445 sq. ft. or 1.2958 acres of land, more or less, and subject to easements and restrictions, and including an access easement area connecting Parcel “B” with N. Grand Avenue described as follows: Beginning at the intersection of the east line of N. Grand Avenue (82.50 ft. wide) with the centerline of vacated E. Ionia Street; thence along the centerline of vacated E. Ionia Street Due East 67.07 ft.; thence S 00°05’02” E 31.69 ft. along the west line of the Parcel “B”; thence Due West 67.10 ft. to a point on the east line of N. Grand Avenue; thence along the east line of N. Grand Avenue N 00°01’35” W 31.69 ft. to the Point of Beginning of the access easement area.

FURTHER RESOLVED, That the General Manager and Corporate Secretary be authorized to enter into an agreement in substantially such form with River Street Triangle, L.L.C. for the sale of real estate including and adjacent to 312 N. Grand Avenue bounded by Grand Avenue, Shiawassee Street, and the Grand River, based on its independently appraised value.

FURTHER RESOLVED, That the proceeds from the sale of this parcel shall remain with the funds and accounts of the Board of Water and Light.

FURTHER RESOLVED, That the sale is subject to and contingent upon the approval of Lansing City Council.

Staff Comments:  The property sale is subject to and contingent upon the approval of the Lansing City Council.  The Board of Water and Light will retain its ownership of a 25-foot wide strip of land adjacent to and along the bank of the Grand River.  The developer plans to build residential housing on the subject property.

Moved by Commissioner Callen, seconded by Commissioner Royal, that the resolution be approved including the following revisions to the proposed “Agreement to Sell Between the Board of Water and Light and River Street Triangle, L.L.C. Regarding Sale of the Property Located in the Corner of Shiawassee Street and Grand Avenue:”

·           The BWL proposes to sell the property for $1,997,070, based on the reduced square footage to be conveyed.

·           The BWL agrees to grant River Street Triangle, L.L.C. an access easement as shown on the attached drawing.

·           The requirement for the River Street Triangle, L.L.C. to take the BWL chilled water service will be deleted from the proposed Agreement.

·           Section 301 of the proposed Agreement shall read substantially as follows:

The purchaser grants to the Seller the right to repurchase a portion of the Phase II Site in such amount as necessary to facilitate the development of Seller’s Ottawa Station located adjacent to the Phase II Site, as long as such sale does not significantly adversely impact the Purchaser’s development of the Phase I Site and the remaining portion of the Phase II Site.  The Seller’s cost to repurchase the necessary portion of the Phase II Site will be the square foot cost ($14.40) paid by Purchaser for the Property.

Discussion:  After lengthy discussion, Commissioner Duncan stated for the record that she is prepared to support the motion because she believes that what the Board is conveying is the BWL property and not the “Triangle” property.  For this reason, she does not believe she is in a direct conflict of interest situation by virtue of her responsibilities and employment with the State of Michigan.  She also stated that because BWL rates are competitive, the BWL should be able to sell its chilled water service to the State.

Commissioner Wonch stated that she does not think the Board has the ability to require the developer to commit the State of Michigan to purchase the BWL chilled water services.  She also concurred with Commissioner Duncan’s statement on the BWL’s ability to sell its chilled water services by virtue of its competitive rate.

Commissioner Royal stated that she views the difference of including electric, water and steam as more understandable because those are not, at this point, on a competitive market.  The BWL chilled water service is the one element that is competitive, and it makes sense that the Board cannot control that decision for the State of Michigan. 

Action:  Carried unanimously.

EXCUSED ABSENCE

On motion by Commissioner Royal and seconded by Commissioner Duncan, that the absences of Commissioners Christian, Creamer and Marin be excused.

Carried unanimously.

PUBLIC COMMENTS

THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.

No persons spoke.

ADJOURNMENT

There being no objection, the meeting adjourned by unanimous consent at 6:30 p.m.

/s/ Mary E. Sova, Secretary
Filed with Lansing City Clerk
May 17, 2002