Title
Purchase of Timber Rights at Deerhaven Generating Station (B)
Staff recommends that the timber rights for the City of Gainesville property adjacent to the Deerhaven Generating Station be purchased from Plum Creek Timberlands L. P.
Explanation
Several pieces of property adjacent to the Deerhaven Generating Station were acquired between 2001 and 2003. The property was annexed into the Gainesville City limits in 2007. Parcel A was purchased in 2001 and is 1153 acres. Two parcels were purchased in 2002 adding 1124 acres to the site. In 2003 a 40.8 acre piece was purchased and 10 acres were exchanged with the Florida Department of Transportation in 2005.
The property that was purchased from Plum Creek Timberlands L. P. in 2001 and 2002 did not include the timber rights. A lease for hunting, that has been restricted to bows only since annexation into Gainesville, also exists with the timber ownership. In the summer of 2006 staff recommended the purchase of the timber rights be included in the FY 2007 budget, primarily due to pending litigation with the Property Appraiser regarding the taxable status of portions of the site. Since the economics favored paying the taxes rather than purchasing the timber rights, the City Commission chose not to the purchase the timber rights at that time.
Subsequently, staff is now processing the amendment to incorporate the parcels into the City of Gainesville Comprehensive Plan in March. The balance of the Deerhaven site is zoned Public Facilities and Conservation; staff believes that these are also the appropriate designations for the newer purchases in order to maintain flexibility for all uses consistent with future power plant operations. Timber operations, while allowed in Alachua County Agricultural land use and zoning categories, are not allowed within either of those designations. The basis used by the court to establish the ad valorem tax liability, was the use of the land by a private entity. . The purchase will remove any future tax liability and also address access, security and ongoing operations at the Deerhaven site.
The formula for the calculation of the value of the timber rights is prescribed in the original contract. In a report prepared by Natural Resource Planning Services, Inc. in May, 2006, the timber was valued at that time at $1,703,056 which is a $758.26 per acre price for 2246 acres. It is anticipated that this report was prepared recently enough to provide an accurate estimate of cost. A complete review of timber stands will be necessary to complete the purchase.
Recommendations
The City Commission: authorize the General Manager or her designee to negotiate and execute a contract for the purchase of timber rights from Plum Creek Timberlands L. P.
Fiscal Note
It is possible that staff will be able to structure a payment plan for the timber rights such that minimal payments will be due until the FY09 budget. If that is not the case, there is occasionally a cumulative under spend in capital projects across the utility such that funds for this purchase will be available in FY08.
Drafter
Prepared by Karen Alford., Interim AGM for Energy Supply
Submitted by Karen S. Johnson, General Manager