SLP amends purchase agreement with Cemstone

The Spring Lake Park City Council approved a third amendment to its purchase agreement with Cemstone Products Company Oct. 21.

The purchase agreement, signed Aug. 21, transfers the property at 8502 Central Ave. NE from Cemstone, a company that manufactures concrete, to the city of Spring Lake Park for $585,000. The city will use the existing building to house public works and police department equipment.

After signing a purchase agreement with Cemstone Products Company in August, the City of Spring Lake Park has amended the agreement three times to extend the due diligence period with environmental concerns. The city will use the building at 8502 Central Ave. NE to store public works and police department equipment. Photo by Olivia Koester

After signing a purchase agreement with Cemstone Products Company in August, the City of Spring Lake Park has amended the agreement three times to extend the due diligence period with environmental concerns. The city will use the building at 8502 Central Ave. NE to store public works and police department equipment. Photo by Olivia Koester

All three amendments to the purchase agreement have extended Cemstone’s due diligence period. Initially, Cemstone had until Sept. 20 to satisfy any environmental concerns; it now has until Nov. 8.

The purchase agreement obligates Cemstone to remove a 10,000-gallon diesel tank on the north side of the building, among other requirements.

The underground storage tank was removed Aug. 19 and soil samples were tested for various chemicals.

Thatcher Engineering, Inc. collected the samples and found elevated levels of diesel range organics, ethyl benzene and xylenes, necessitating involvement by the Minnesota Pollution Control Agency.

The state agency needed to collect further soil samples as part of a limited site investigation, since findings indicated a potential spill, according to City Engineer Phil Gravel.

To accommodate the MPCA investigation, the council approved the first amendment to the purchase agreement Sept. 16, extending due diligence to Oct. 11.

If further cleanup or a remedial investigation is required, it could take months or even years, according to Gravel.

Because the MPCA was delayed in obtaining meters to measure vapors, soil sample results would not be available to Cemstone until Oct. 24, City Attorney Jeff Carson said at the Oct. 7 meeting. So, the council extended the due diligence deadline even further to Oct. 30.

“We cannot justify purchasing without assurances that it’s environmentally sound,” Carson said.

Cemstone still expects results Oct. 24, but in order to avoid scheduling a special meeting, the council extended the deadline to Nov. 8 to better coincide with their regularly scheduled meeting.

In need of more space

The city will use the former Cemstone building as a public works facility since the current space adjacent to city hall is insufficient to house all of the department’s equipment.

During the public hearing for the 2013-2017 capital improvement plan, in which the only proposed project is a new public works facility, City Administrator Dan Buchholtz outlined the need for more space.

Because vehicles and equipment cannot be housed indoors, the wear-and-tear incurs increased maintenance and replacement costs.

“When you’ve got property out in the open, you run into situations where hoses crack, wiring deteriorates, metal rusts, paint fades … it’s really a waste of time and money,” Buchholtz said during the public hearing.

Before signing the purchase agreement with Cemstone in August, the council discussed two options to acquire more space for public works – adding on to the current property or buying an existing building.

An addition to the current public works building would be limited to 6,000 square feet with zoning and wetland restrictions. That size would be inadequate to fully accommodate public works’ equipment. The construction of an addition would cost an estimated $773,000.

Purchasing and remodeling the former Cemstone building would cost an estimated $646,000, Buchholtz said at the hearing. Public works would gain 16,000 square feet at this site, ample room for the department.

With savings of $127,000 and the additional square footage, the council decided to purchase the Cemstone building.

“It meets our current and future storage needs for the public works and police departments,” Buchholtz said.

All present council members voted to allow Mayor Cindy Hansen and Buchholtz to sign a purchase agreement with Cemstone except Councilmember Bob Nelson, who voted “no.” Councilmember Jeanne Mason was not in attendance at the Aug. 19 hearing and meeting.

No community members offered comment on the capital improvement plan.

Paying for the building

The funds to pay for the Cemstone building will come from proceeds of a 10-year general obligation capital improvement bond.

The general and public utilities renewal and replacement funds will contribute equally to the annual debt service.

Local Government Aid from the state will pad the general fund, so there is no expected increase to the property tax levy, Buchholtz said.

“The financial impact upon the general taxpayer is expected to be negligible,” the capital improvement plan states.

The police and code enforcement departments will use the current public works facility, built in 1977, to store vehicles and equipment.

Public works will continue to use the north public works building as a sign shop and to store additional equipment.

Olivia Koester is at olivia.koester@ecm-inc.com

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