City Manager Paul Boyer's Memo to City Council on Pine Ridge, October 12, 2001

CITY COUNCIL MEMORANDUM
01-74

DATE: October 12, 2001

TO: Honorable Mayor and Members of City Council
FROM: Paul C. Boyer, Jr., City Manager
SUBJECT: DEVELOPMENT OF PINE RIDGE

Below is a chronology of the sale of land and actions taken by various city entities and staff as requested by motion at the October 8, 2001 City Council Meeting. Based on the request of Councilman Golden, the chronology begins with the purchase of the land in question from the Atomic Energy Commission in 1969.

The dates of actions and/or meetings that are bolded are those considered by either City Council or its appointed boards and commissions, which are open to the public pursuant to the Tennessee Open Meetings Law.

DATE	ACTION
September 15, 1969	City Council approves acquisition of Site X, 230.2 acres, from the Atomic Energy Commission for $52,000. Site X is the current Valley Industrial Park and Pine Ridge. The recorded plat referred to in the Deed of Trust is titled Excess Industrial Land, Site X.
April 18, 1977	After Public Hearing on March 28 and First Reading on April 4, City Council approves on second reading an ordinance rezoning the portion of Site X between Pine Ridge and Chestnut Ridge from Forestry, Agriculture, Industry and Research (F.A.I.R.) to IND-2, Industrial (IND-2) including the current Valley Industrial Park.
April 23, 1979	After Public Hearing on March 19 and First Reading on April 2, City Council approves on second reading an ordinance rezoning the portion of Site X at South Illinois Avenue and Scarboro Road from F.A.I.R. to O, Office to permit the development of an office park on the site.
October 15, 1979	City Council approves the granting of an option to Pine Ridge, LTD/LNDC for the purchase of 8.132 acres for the construction of the Pine Ridge Office Park. The option included the extension of water and sewer utilities to the site at city expense.
April 9, 1984	City Council approves a contract for the sale of 8.132 acres to Pine Ridge, LTD/LNDC at a total price of $48,792 or $6,000 per acre.
August 7, 1986	City voters approve charter amendment granting City Council the authority to delegate its city-owned land management and sales to the Industrial Development Board (IDB) or any other city board or officer.
October 6, 1986	Charter amendments approved in August 1986 become effective.
August 18, 1988	City Council approves a reorganization of the city's economic development activities including transferring through fee simple title all serviced industrial parcels then owned by the city to the IDB thereby allowing the IDB to manage and dispose of said parcels. This decision was made after considerable discussion of possible alternatives at regular City Council meetings on December 7, 1987, February 16, 1988, and July 11, 1988 and work sessions on January 25, May 2, May 9, June 27, and August 15, 1988.
November 30, 1988	IDB approves an agreement with City Council to accept title to the above referenced land.
December 12, 1988	City Council approves the agreement with IDB and the fee simple transfer of 14 parcels in the Bethel Valley Industrial Park, 3 parcels in the Clinch River Industrial Park, and 6 parcels in the Valley Industrial Park.
October 26, 1995	Planning Commission approves resubdivision of Parcel 709 (Pine Ridge) into Parcel 709 (71.33 acres), zoned F.A.I.R.; Parcel 709.01 (29.58 acres) and Parcel 709.02 (2.63 acres), both zoned IND-2.
November 17, 1995	IDB agrees to amend the above agreement to include Parcels 709.01 and 709.02 in the Valley Industrial Park.
December 11, 1995	City Council amends the IDB agreement to include Parcels 709.01 and 709.02 in the Valley Industrial Park. IDB sells Parcel 709.01 consisting of 29.58 acres to the Oak Ridge Research Institute and Parcel 709.02 consisting of 2.63 acres to Manufacturing Sciences.
January 5, 1996	IDB sells Parcel 709.01 to Oak Ridge Research Institute for $60,000 and Parcel 709.02 to Manufacturing Sciences for $5,500.
June 13, 1997	City Manager requests the Tennessee Department of Transportation (TDOT) grant access to Parcel 709.01 from the Boeing Access Road.
August 11, 1997	TDOT denies access request based on the possible negative effect of the access on the Boeing Access Road's capacity and safety on a fully controlled Industrial Access Road.
February 5, 1998	City Engineer informs developer of the steps necessary to obtain temporary access approval and a grading permit to allow the harvesting of timber and grading operations on Parcel 7.06. The southern portion of Parcel 7.06 was formerly designated Parcel 709.01.
December 14, 1998	City Council approves a permanent access easement agreement with Dr. Nathaniel Revis, the owner of Parcel 7.06, from the south side of State Route 62 (Kerr Hollow Road, now Illinois Avenue) across city-owned Parcel 709.00 to permit access to the northern portion of Parcel 7.06. The agreement is subject to a number of conditions outlined therein including a detailed plan, access approval by the city and the state, acquisition of a grading permit, a detailed design of the access road, and a land disturbance bond of $2,000 per acre of land disturbance.
January 11, 1999	Scientific and Technical Resources, Inc. (STr) requests access to Kerr Hollow Road as outlined in the above referenced agreement.
January 15, 1999	STr requests purchase of Parcel 709.00 at the price of $2,000 per acre.
January 19, 1999	The Traffic Safety Advisory Board (TSAB) recommends denial of STr's access request by a vote of 4-1 with one dissension. TSAB was of the opinion that such an access would cause degradation of the service level of the five-lane section of Kerr Hollow Road.
February 1, 1999	City Council approves STr's access request subject to TDOT's approval, approval of roadway construction drawings, and the fact that the access will only serve the northern portion of Parcel 7.06.
February 26, 1999	City Manager responds to STr's January 15, 1999 request to purchase Parcel 709.00 requesting additional information concerning access to the property and intended use, and further requests a sketch plan showing proposed buildings and other uses.
March 5, 1999	City Engineer writes the developer outlining the steps necessary to complete access easement drawings and those items that must be received prior to the issuance of a grading permit for the clearing of trees from Parcel 7.06. The items included detailed construction drawings, including a geotechnical report and storm water management plan, in addition to items mentioned above.
March 11, 1999	STr replies to the City Manager's February 6 request stating the intention to build six buildings of approximately 42,000 square feet. It also points out that only 60% of the land requested is developable, the additional development will have minimal influence on traffic generation thereby requiring no additional roads or accesses. The response also includes a schematic plan titled Proposed Data Storage and Retrieval Park dated March 10, 1999.
March 24, 1999	STr responds to additional questions by staff concerning traffic generation of the March 10 schematic plan and the proposed use as it relates to the Declaration of Restrictions for the Valley Industrial Park. STr states that the new proposal would generate 150 car trips and 10 to 15 truck trips per day. STr further notes that the purpose of the development is data retrieval and storage with 51% of the activity in data processing, 19% in data retrieval, and 30% in storage.
March 26, 1999	Staff Attorney states that this use complies with the uses permitted by the zoning (F.A.I.R.) and that the restrictive covenants for the Valley Industrial Park permit processing activities.
April 15, 1999	Development Facilitator recommends to City Manager that Parcel 709.00 be transferred to the IDB for sale to STr.
June 30, 1999	Development Facilitator recommends to City Manager that Parcel 709.00 be transferred to the IDB for sale to STr with the condition that any option agreement not extend beyond 24 months, the city establish the sales price, and that STr be encouraged to explore an additional access to the site. He further reports that the informal appraisal value of the property is between $2,000 and $2,500 per acre.
July 21, 1999	Staff Attorney provides information to City Manager outlining the possible land sales methods. These include auction, sealed bid, or transfer to the IDB under the 1988 contract.
August 2, 1999	Based on the recommendation of the City Manager, City Council approves the transfer of Parcel 709.00 to the IDB with the understanding that the property would ultimately be sold to STr. While the City Manager expressed reservations about the process, he recommended it based on this method being a well-established practice in Oak Ridge.
August 16, 1999	IDB accepts STr's offer of $2,000 per acre for Parcel 709.00 with a two-year option subject to a confirming appraisal. Ten percent of the appraised value due on execution of the option, and five percent due to continue into the second year should it be necessary. STr was granted a right-of-first refusal should the IDB receive an alternate offer.
August 26, 1999	Planning Commission unanimously approves STr's request for purchase and proposed use of Parcel 709.00 as consistent with the city's Comprehensive Plan.
September 20, 1999	IDB again discusses the sale of Parcel 709.00 to STr. No action taken as appraisal not yet received.
September 22, 1999	TFW Appraisal Service establishes a value of $2,500 per acre or $178,000 for Parcel 709.00.
October 25, 1999	IDB offers Parcel 709.00 to STr at a price of $2,250 per acre, a compromise between STr's offer of $2,000 per acre and the appraised value of $2,500 per acre.
November 2, 1999	The option agreement between IDB and STr is executed.
May 30, 2000	City Engineer provides comments on STr's grading plan for Parcels 7.06 and 709.00. This initial submission was for comment only with the plans returned to the engineer along with the comments.
June 20, 2000	City Council rescinds the access granted across city property on February 1, 1999 and grants permanent access to South Illinois Avenue (formerly Kerr Hollow Road) in anticipation of STr's purchase of Parcel 709.00. Approval is contingent on the purchase of Parcel 709.00 prior to any land disturbance, TDOT approval, the submission by STr of an acceptable traffic impact study when the development generates traffic volume approaching 1,000 trips per day, and the funding by STr of any recommended traffic control measures before any additional development on the parcel is approved. As TSAB had recommended against this access at its January 19, 1999 meeting, no additional review by TSAB was sought.
June 19, 2000	STr purchases Parcel 709.00 from the IDB based on the option agreement executed on November 2, 1999.
October 13, 2000	City Engineer comments on grading plan for tree cutting operation.
November 21, 2000	City Engineer issues grading permit to STr for logging 80 acres with $85 fee based on drawings approved on November 7, 2000. The permit is for construction of logging roads and removal of trees. It does not permit stump removal or earth grading not necessary for logging roads.
March 27, 2001	After a series of meetings and plan reviews, City Engineer issues grading permit for a fee of $1,305 with a site disturbance bond of $160,000 posted. The permit allows logging, clearing and grubbing, and grading of the site in accordance with the plans submitted by STr. A city engineering inspector has been on site on the vast majority of working days since this date.
May 24, 2001	Grading permit is reissued due to a change in STr's contractor. STr was warned that the site was not in compliance with the erosion control measures required by the March 27 permit, and that failure to comply within three working days would result in legal action by the city.
June 12, 2001	Fire Department conducts a meeting with STr and Perkin-Elmer to discuss the possible effects of controlled burning of vegetative waste on Perkin-Elmer's operation. Perkin-Elmer agreed that the burning could take place provided the burning was restricted to the south side of the ridge and that an air curtain destructor be employed to both hasten and completely dispose of waste material. The burning permit was issued by the Fire Department within 2 days.
June 29, 2001	STr submits a revised grading plan.
July 5, 2001	City Engineer reviews and requests revisions to the revised grading plan.
July 16, 2001	Boeing complains about power outage the previous weekend caused by grading contractor pushing a tree into a power line on Parcel 709.00 that feeds the Boeing facility.
July 23, 2001	City Engineer approves revised grading plan submitted July 10 by STr.
July 29, 2001	2.37 inches of rain between midnight and 6 p.m. coupled with 0.91 inches between 6 and 7 p.m. (a 2-year storm event) results in a major breakdown in erosion control measures depositing mud and debris on South Illinois Avenue. A review of this incident revealed the STr did not have a required land disturbance permit from the Tennessee Department of Environment and Conservation (TDEC). However, TDEC's review of the site and the incident did not result in any state penalties or fines.
August 15, 2001	City Engineer issues a report on his findings concerning the July 29 event.
August 20, 2001	City Engineer's report is reviewed with City Council with a recommendation from City Manager that no action either in terms of this project or in terms of additional development regulations be taken at this time. City Council adopts a motion requesting that the Environmental Quality Advisory Board (EQAB) and the Planning Commission review the need for hillside development standards and make a recommendation to City Council.
August 20, 2001	TDEC notifies STr that its NPDES land disturbance permit is approved effective August 20.
August 24, 2001	City invoices STr $2,990.93 for the cost of cleanup operations on public property resulting from the July 29 incident.
September 25, 2001	STr submits a conceptual site plan for staff review.
September 25, 2001	Staff rejects plan as providing inadequate information for review. The list of deficiencies is long and covers roadways, utilities, and storm water management. Comments are provided to STr to allow modification of the plan thereby supporting staff review.
September 27, 2001	Fire Department issues a blasting permit after STr and its contractor, Tennessee Blasting Services, LLC, file the documents required by state and local law showing proper license and insurance.

GENERAL COMMENTS

Since 1969, over thirty public meetings concerning the acquisition and planning of the development of the site have been held. All meetings where decisions were made concerning sale to STr were open to the public.
Sections 6-911 and 6-912 of the Zoning Ordinance assign responsibility for the approval of site plans. In zones UB-2, B-1, O-2 and MH-1 approval is vested in the Planning Commission. In all other zones it is vested in the City Manager. Through Administrative Policy and Procedure D-300 this authority has been delegated to the staff Development Review Committee. The current zoning of the subject property is F.A.I.R. for which the City Manager has site plan approval authority.
The members of the Development Review Committee have spent countless hours over the last 2 years meeting with STr and its various development partners concerning the various regulatory issues surrounding this project. STr has been required to comply with all applicable laws, ordinances, regulations, and administrative procedures that the city has in place at the present time.
As City Council may recall, staff has been repeatedly criticized for over-regulating and delaying development projects. Over the past four years, the members of the Development Review Committee have worked diligently at streamlining both the committee's and their respective department's review processes. Quality has not been sacrificed, but unnecessary delays have been mitigated.
Until submission of the conceptual site plan on September 25, 2001, all drawings submitted by STr depicting buildings on the site have been considered conceptual only. It is reasonable to expect that a project of this scope will be revised as clearing and grading provide new information for STr's development team to consider.
STr is conducting its current operations with an approved grading permit. Section 9-407 of the city's Erosion Control and Storm Water Management Ordinance provides that a grading permit is issued after a grading plan is reviewed and approved by the City Manager or his designee. An approved site plan is not required for the issuance of a grading permit.
City Council has requested that EQAB and the Planning Commission investigate hillside development standards and make a recommendation to City Council. This work is ongoing.
Review of the economic viability of a development project is only conducted when the city is requested to participate financially in a project. Development review is generally restricted to the appropriateness of the land use and compliance with various codes and technical specifications.

OPTIONS

The options for consideration by City Council are few and have been appropriately described by Mr. Bill Schramm. They are:

Allow the project to continue at its current pace. While there is considerable concern over the current aesthetics of the project, it has been thoroughly reviewed for regulatory compliance and will continue to be so reviewed. This review will include a requirement for STr to meet the city's landscaping standards of 20% of the first two acres and 15% of the remaining acreage.
Stop further development. There is no cause under the city's development laws and regulations to issue a stop work order. Stopping development of a privately owned parcel without cause constitutes a taking that could expose the city to significant financial loss. STr paid in excess of $160,000 for the property and has invested approximately $1.3 million in site work to date.
Repurchase the property. STr has emphatically stated that it will not sell the property back to the city at any price thereby eliminating this option.
Condemn the property and take back ownership through eminent domain. In Legal Memorandum 01-71 (attached), the City Attorney advises that it is impossible to justify a public purpose for the taking of this privately owned parcel. Such action would result in a court action in which the city would not prevail.

RECOMMENDATION

It is the recommendation of the City Manager and the staff that the project be allowed to continue based on the normal site development process. Such development will favorably impact the city's tax base, its employment base, and improve the appearance of the site from its current state.

A notebook containing all the supporting documentation will be placed in the City Council mailroom in the next few days so that a review of source documents will be possible without a voluminous copying project.

If you have any questions concerning this issue please contact me at 425-3550; Tim Ward, Code Enforcement Administrator, at 425-3532; Steve Byrd, City Engineer, at 425-1875; or Ken Krushenski, City Attorney, at 425-3530.

_____________________________________

Paul C. Boyer, Jr.

Attachments

Copy:
City Attorney
Assistant City Manager
All Department Directors
Government and Public Affairs Coordinator
City Clerk
City Engineer
Code Enforcement Administrator
Nathaniel Revis
Warren Gooch
Bill Schramm