HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 03/01/2005 - FIRST READING OF ORDINANCE NO. 034, 2005, AUTHORIZ ITEM NUMBER: 17
AGENDA ITEM SUMMARY DATE: March 1, 2005
FORT COLLINS CITY COUNCIL STAFF: John Armstrong
Kathy Valdez
SUBJECT
First Reading of Ordinance No. 034, 2005,Authorizing the Lease of City-Owned Property at 3829
East Prospect Road, Fort Collins, Colorado, to Frontline Bioenergy.
RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading. The Natural Resources Advisory
Board reviewed Frontline BioEnergy's request at its meeting of February 2, 2005, and the Board
unanimously recommends that Council adopt the Ordinance.
FINANCIAL IMPACT
Frontline Bioenergy has obtained a grant for research and development,and the City of Fort Collins
Utilities, in support of its research, will pay the annual lease in the amount of$20,337 for the first
year, $20,947 for the second year and $21,575 for the third year for leasing the above-mentioned
shop/office area, an area for a temporary shelter, and parking. If Frontline requests to lease
additional space in the optional lease areas described in the lease,it will pay the City for the leasing
of that additional area at a rate of$200 per hundred square feet.
EXECUTIVE SUMMARY
Vacant buildings suitable for industrial uses are located on the Resource Recovery Farm property
(RRF), which was transferred from Utilities to the Natural Areas program for use as open space in
2003. Frontline BioEnergy, which is working to develop innovative technology and integrate
systems that convert biological waste materials (biomass) into useful energy products such as
hydrogen through thermal or microbial processes, is interested in using certain of the buildings at
RRF. Frontline BioEnergy offers proven research methods,design and manufacturing expertise,and
system integration. In furtherance of the City Council adopted policy of encouraging development
of and implementing hydrogen-related projects in Fort Collins, and funds have been budgeted for
Utilities' use for hydrogen fuels projects. Utilities has proposed to use a portion of those funds to
assist Frontline BioEnergy in acquiring this lease space from the Natural Areas program for the start-
up of its operations.
The lease would include the following: both levels of the office,consisting of 2,106.88 square feet,
2,450.09 square foot section of the shop, and an outside area on which the tenant would construct
a temporary open front pole shed, together with a small amount of parking area.
March 1, 2005 -2- Item No. 17
BACKGROUND
The RRF was acquired by the Natural Resources Department in 2003,following direction from City
Council to preserve the property as open space, viewshed, and community separator. The RRF
consists of several residential structures; industrial facilities formerly used as part of the City
wastewater treatment process;and surrounding agricultural land. Currently,none of these facilities
are in use.
Frontline is proposing to use a portion of the RRF to conduct pioneering research in the conversion
of biomass (specifically chipped tree branches from the City Forestry Program) to hydrogen.
Frontline will use a gasifier(also referred to as an anaerobic digester)to decompose the wood chips,
resulting in a gas that includes hydrogen.
Frontline also has developed proprietary approaches and configurations and are pursuing licensing
agreements to obtain further intellectual property in the following areas:
• Proprietary configuration forbiomass gasification which promises significant
reduction in production cost of hydrogen;
• Proprietary methods of tar reduction in biomass gasification,lowering system
cost;
• Proprietary reactor design for lower cost natural gas processing; and
• System integration technology and technology licensing that will dramatically
reduce costs in new anaerobic digesters while improving the efficiency of
existing anaerobic digesters.
Biomass is a"renewable fuel"meaning that it is a sustainable resource whose energy is derived from
the sun (photosynthesis). The technology has the potential to convert other types of biomass to
usable energy,including other plant materials that are either agricultural waste products (nut shells,
rice hulls, grape stakes, orchard prunings,wheat straw and corn stover); urban residues (urban tree
pruning waste,grass clippings,pallets,construction wood waste,and municipal refuse);energy crops
that are grown specifically for use in an energy application (rapid growing poplar, aspen, and
miscanthus);or a variety of wet organic materials found in municipal waste water,confined animal
production,animal rendering plants,breweries and ethanol plants. The lease specifies that Frontline
will have the option to lease additional space in the shop and composting buildings should the need
arise within the lease period.
The City will receive numerous benefits from its support of this project. The lease stipulates that
the City will be a preferred consumer of hydrogen resulting from the project,should usable supplies
be produced. Frontline will support efforts to educate the public about biofuels research and usage.
Should full production of hydrogen occur,the project has the potential to positively affect the City's
solid waste diversion rate by providing an additional option to landfilling yard waste (and other
organics). Finally, the project has the potential to establish Fort Collins as a leader in hydrogen
research and production.
ORDINANCE NO. 034, 2005
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AUTHORIZING THE LEASE OF CITY-OWNED PROPERTY AT
3829 EAST PROSPECT ROAD,FORT COLLINS, COLORADO,
TO FRONTLINE BIOENERGY
WHEREAS,the City of Fort Collins,Colorado(the"City") is the owner of property known
as the "Resource Recovery Farm," located at 3829 East Prospect Road, Fort Collins, Latimer
County, Colorado (the "Property")more particularly described on Exhibit"A" attached hereto and
incorporated herein by this reference; and
WHEREAS,this Property was previously used by the City's Wastewater Utility for its land
disposal "sludge farm" project, but the Property has since been transferred to the Natural Areas
program for use as open space in accordance with Ordinance No. 098, 2003; and
WHEREAS, Frontline Bioenergy has proposed to lease certain buildings and areas on the
Property for use in the development of biomass-based hydrogen fuels and related processes,and has
worked with City staff to identify the particular portions of the buildings and the Property that are
most suitable for its initially intended activities,together with certain additional areas that Frontline
Bioenergy may be able to use in the future for its operations (collectively referred to as the"Leased
Premises")and shown on Exhibit`B"attached hereto and incorporated herein by this reference;and
WHEREAS, leasing the Leased Premises to Frontline Bioenergy will be a benefit to the
community by contributing to the City's local economic vitality, as well as national and global
sustainability; and
WHEREAS, on February 18, 1997, the City Council,by Resolution 1997-025, adopted the
Community Visions and Goals 2015, City Structure Plan, and City Plan Principles and Policies as
elements of the Comprehensive Plan of the City, also known as "City Plan", which supports
improving air quality, reducing motor vehicle emissions, encouraging and facilitating increased
energy efficiency and use of renewable resources, and cooperation among independent community
organizations; and
WHEREAS,on April 1, 1997,the City Council adopted Resolution 1997-051 providing that
as a user of energy,the City shall regularly evaluate the latest technologies utilizing alternative fuels
for transportation and, to the greatest extent practicable, apply such technologies to the operation
of City vehicles in order to provide energy efficient transportation; and
WHEREAS, Resolution 1997-051 also provides that as community leader, the City should
also regularly evaluate means by which City-wide demand and usage of fossil fuels can be reduced
and should attempt to develop means by which it can further such goals, through the City's role as
educator, promoter and regulator; and
WHEREAS, on November 16, 1999, the City Council adopted Resolution 1999-137
establishing a policy to take cost-effective actions that benefit the community to reduce local
greenhouse gas emissions; and
WHEREAS,the City anticipates that increased use of hydrogen will provide benefits to the
citizens of Fort Collins such as improved air quality, reduced greenhouse gas emissions, reduced
dependence on imported oil,and retention of the proceeds from energy consumption in the local and
state economy; and
WHEREAS,the City is in a unique position to attract hydrogen-related projects and funding,
due to the potential for region partnerships, development of the Mason Street Corridor, a favorable
testing environment for technologies with high altitude and extreme weather variation, and access
to local sources of hydrogen; and
WHEREAS,on March 19,2002,the City Council adopted Resolution 2002-027,establishing
a policy to implement hydrogen-related projects within the City, and directing the City Manager to
explore partnerships that would facilitate the creation of hydrogen projects; and
WHEREAS, the City's Utilities have budgeted and planned for certain funds to be used to
promote the development of hydrogen fuels projects in Fort Collins, because of the significant
benefits to the ratepayers of the electric utility that are expected to result from the development of
the capability to locally produce alternative and renewable fuels and from the potential for local
distributed power generation; and
WHEREAS, the proposed use by Frontline Bioenergy of the Leased Premises will provide
significant assistance to Frontline Bioenergy in its development of the project described herein;and
WHEREAS, development of a successful bioenergy facility could lead to the diversion of
a substantial volume of biomass from the Latimer County Landfill in the future,consistent with the
City's solid waste management objectives; and
WHEREAS, City staff has negotiated a lease agreement with Frontline Bioenergy that
provides for use of the Leased Premises for up to three years and providing for certain protections
and requirements to protect the City's interests, a copy of which lease agreement, dated February
25, 2005 (the "Lease Agreement"), is on file in the office of the City Clerk and available for public
inspection; and
WHEREAS, the Lease Agreement provides that the City will be a preferred customer for
purchase of hydrogen from the Frontline Bioenergy project, and further provides that Frontline
Bioenergy will work with Utilities staff to provide support and education related to biofuels research
and usage; and
WHEREAS, under Section 23-111 of the Code of the City of Fort Collins, the Council is
authorized to lease any and all interests in real property owned in the name of the City,provided that
Council first finds by ordinance that the lease is in the best interests of the City.
NOW,THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT
COLLINS as follows:
Section 1. That the Council hereby finds that the lease of the Leased Premises to
Frontline Bioenergy as provided herein is in the best interests for the City of Fort Collins.
Section 2. That the Council hereby finds that the use of Utilities funds to provide lease
assistance to Frontline Bioenergy as described herein,in light of the various policies and the benefits
to be gained by the promotion of local hydrogen fuels resources described herein, is of benefit to
the Utilities and will be of benefit to the ratepayers of the Electric Utility.
Section 3. That the City Manager is hereby authorized to execute a lease agreement for
the lease of the Leased Premises to Frontline Bioenergy,consistent with the terms of this Ordinance
and in a form substantially similar to the Lease Agreement,together with such additional terms and
conditions as the City Manager,in consultation with the City Attorney, determines to be necessary
and appropriate to protect the interests of the City.
Section 4. That all amounts paid by Utilities and Frontline Bioenergy for the use of the
Leased Premises shall be deposited in the Natural Areas Program Fund.
Introduced, considered favorably on first reading, and ordered published this 1st day of
March, A.D. 2005, and to be presented for final passage on the 15th day of March, A.D. 2005.
Mayor
ATTEST:
City Clerk
Passed and adopted on final reading this 15th day of March, A.D. 2005.
Mayor
ATTEST:
City Clerk
EXHIBIT '$A"
DESCRIPTION OF A PORTION OF THE CITY OF FORT COLLINS RESOURCE
RECOVERY FARM
A tract of land located in Sections 21, 22, 27 and 28, Township 7
North, Range 66 West of the Sixth Principal Meridian, Larimer
County, Colorado, the said tract is also a portion of that certain
tract of land described in a Warranty Deed recorded October 2, 1979
in Book 1992 at Page 280 records of the Clerk and Recorder of the
said Larimer County, the said tract is also a portion of that
certain tract of land described in Exhibit °B• as attached to an
Basement Agreement Recorded September 6, 1995 at Reception No.
95055231 records of the said Clerk and Recorder, being more
particularly described as follows;
Considering the south line of the Southeast quarter of Section 21
an bearing North 88 degrees 44 minutes 39 seconds West between a LS
20685 Aluminum Cap monument at the south quarter corner of the said
Section 21 and a LS 17497 Aluminum Cap monument at the southeast
corner of Section 21, based upon G.P.S. observation and with all
bearing contained herein relative thereto;
Commencing at the Southeast Corner of the said Section 21;
THENCE along the south line of the said southeast quarter,
North 88 degrees 44 minutes 39 seconds West fcr a distance of
300.61 feet to the TRUE POINT OF BEGINNING of this description;
THENCE leaving the said south line, South 19 degrees 13
minutes 46 seconds East for a distance of 84.31 feet;
THENCE South 04 degrees 13 minutes 14 seconds East for a
distance of 593.72 feet;
THENCE South 23 degrees 43 minutes 07 seconds East for a
distance of 336.44 feet;
THENCE South 36 degrees 26 minutes 05 seconds East for a
distance of 422.60 feet;
THENCE North 62 degrees 39 minutes 07 seconds East for a
distance of 28.49 feet;
THENCE South 39 degrees S6 minutes 06 seconds East for a
distance of 94.04 feet;
THENCE North 87 degrees 25 minutes 24 seconds East for a
distance of 155.71 feet;
THENCE South 59 degrees 25 minutes 23 seconds East for a
distance of 135 ,83 feet;
THENCE South 03 degrees 16 minutes 50 seconds Eaat for a
distance of 107.19 feet;
THENCE North 85 degrees 41 minutes 26 seconds East for a
distance of 48.38 feet;
THENCE North 43 degrees 51 minutes 33 seconds East for a
distance of 68.66 feet to the westerly right of way of I-25 as
ahown on a Boundary Survey of the Strauss Cabin Trailhead Property
performed by LS17497 (myself) for the said City of Fore Collins in
October 1986;
THENCE along the said westerly right of way the following
PAGE 1 OF 3
Fo
hree (3) eoursoa and distances, (1) North 12 deg_oes 32 minutes 55
econds West for a distance of 291.19 feet;
(2) North 02 degrees 42 minutes 21 seconds Weat for a distance
f 304 .35 feet;
(3) North 12 degrees 25 minutes 28 seconds West for a distance
f 321.64 feet;
THENCE continuing along the said westerly right of way as
shown on a survey by LS14823 and as defined in the property
description shown in the said Book 1992 at Page 280 the following
seven (7) courses and distances, (11 North 12 degrees 36 minutes 14
seconds West for a distance of 968 . 84 feet;
(2) North 25 degreon 25 minutes 54 seconds West for a distance
of 425 .50 feet;
(3) along a curve to the right having a radius of 11680 ,00
feet a central angle of 03 degrees 00 minutes 01 seconds and an arc
length of 611.62 feat, being subtended by a chord of North 09
degrees 52 minutes 54 seconds West for a distance of 611.55 feet;
(4) North 06 degrees 05 minutes 36 seconds East for a distance
of 417.50 feet;
(5) along a curve to the right having a radius of 11583.00
feet a central angle of 06 degrees 33 minutes 06 seconds and an arc
length of 1324.49 feet, being subtended by a chord of North 03
degrees 07 minutes 19 seconds west for a distance of 1323 .77 feet;
(6) North 00 degrees 11 minutes 08 seconds East for a distance
of 53.90 feet;
(7) North 06 degrees 05 minutes 24 seconds West for a distance
of 345.66 feet to the north line of a Permanent Easement as
recorded in Resolution 88-66 recorded June 13, 1988 at Reception
No. 80026800 records of the said Clerk and Recorder;
THENCE along the said north line and along the east line of
the said easement recorded at Reception No. B8026808 the following
seven (7) courses and distances, (1) south 69 decrees 57 minutes 13
ecconds west for a distance of 1059.64 feet;
(2) North 36 degrees 10 minutes 43 seconds West for a distance
of 117.93 feet;
(3) North 17 degrees 41 minutes 20 seconds East for a distance
of 404.31 feet;
(4) along a curve to the left having a radius of 612.96 feet
a central angle of 40 degrees 05 minutes 20 seconds and an arc
length of 428.88 feet, being subtended by a chord of North 02
degrees 21 minutes 20 seconds West for a distance of 420.18 feet;
(5) North 22 degrees 24 minutes 00 seconds Wost for a distance
of 110 .41 feet;
(6) along a curve to the right having a radius of 532.96 feet
a central angle of 14 degrees 20 minutes 52 seconds and an arc
length of 133 .46 feet, being subtended by a chord of North 15
degrees 13 minutes 34 seconds West for a distance of 133 .11 feet;
(7) non-tangent from the previous curve, Ncrth 44 degrees 22
minutes 29 seconds East for a distance of 13-3.14 feet to the
existing south right of way of East Prospect Rca.d;
THENCE along the said south right of way, being a line which
is 30.00 feet (measured at right angles) south of and parallel with
PAGE 2 OF 3
the north line of the said northeast quarter of the said Section
21, North 90 dogreeo 21 minutes 25 seconds West for a distance of
394.38 feet to the east line of that certain tract of land
described in a Special Warranty Deed recorded May 1, 1997 at
Reception No. 97026804 records of the said clerk and Recorder;
THENCE along the said east line, South 32 degrees 1S minutes
02 seconds East for a distance of 560.68 feet to the south line of
the said tract described at Reception No. 97026804 ;
M-RCE along the said south line, South Be degrees 25 minutes
55 seconds West for a distance of 127 .80 feet to the east line of
the Mining and Reclamation Agreement Regarding Resource Recovery
Farm Property as filed with the Clerk' s Office of the said City of
Fort Collins having an "effective date" of April 24, 2000;
THENCE along the said east line of the Mining and Reclamation
Agreement the following three (3) courses and distances, (1) South
of degrees 12 minutes 28 seconds West for a distance of 3588 . 51
feet;
(2) South 39 degrees 41 minutes 47 seconds East for a distance
of 229.49 feet;
(3) South 06 degrees 41 minutes 55 seconds East for a distance
of 1197.3.0 feet to the north line of that certain tract of land
described in a Bargain and Sale Deed recorded September 6, 1995 at
Reception No. 95055229 records of the said Clerk and Recorder;
TIMCE along the said north line, South 88 degrees 40 minutos
it seconds East for a distance of 103 .42 feat to the northerly line
of that certain tract of land described in a Bargain and Sale Deed
recorded September 6, 1995 at Reception No. 95055230 records of the
said Clerk and Recorder;
THENCE along the said northerly line, North 61 degrees 21
minutes of seconds East for a distance of 306.09 feet to the said
south line of the southeast quarter of Section 21;
THENCE along the said south line, South 88 degrees 44 minutes
39 seconds East for a distance of 564.61 feet to the point of
beginning.
Containing 156.487 Gross Acres more less. The above described tract
is subject to the said Easement granted at Reception No. 08026808,
The said easement contains 5,118 acres more or less. The net area
for the above described tract is 151.369 acres more or less.
The above described tract is also subject to any other easements
and rights of ways now existing or of record that encumber the
property.
I hereby state that the above description was prepared by me and is
true and correct to the best of my professional knowledge, belief
and opinion. This description is based upon previously compiled
clescriptions and not upon a actual field survey.
WALLACE C. MUSCOTT COI.ORADO P.L.S. 17497
P.O. BOX Sao FORT COLLINS, CO 80522
PAGE 3 OF 3
Exhibit B(l) — Resource Recovery Fann Facilities
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