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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 06/02/2015 - SECOND READING OF ORDINANCE NO. 061, 2015, AUTHORIAgenda Item 4 Item # 4 Page 1 AGENDA ITEM SUMMARY June 2, 2015 City Council STAFF Lindsay Kuntz, Real Estate Specialist SUBJECT Second Reading of Ordinance No. 061, 2015, Authorizing the Replacement of a Notice of Interim Trail Use and the Conveyance or Vacation of the City’s Rights in a Portion of Property Known as the Rails-to-Trails Property. EXECUTIVE SUMMARY This Ordinance, adopted unanimously on First Reading on May 19, 2015, obtains authorization from City Council to terminate an existing Notice of Trail Use for a portion of Rails to Trails property located east of Taft Hill Road and north of Lincoln Middle School that the City does not have any current or future use for and vacate or convey the City’s remaining interests in the property. The City will request a replacement Notice of Interim Trail Use for the remaining Rails to Trails property. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on Second Reading. ATTACHMENTS 1. First Reading Agenda Item Summary, May 19, 2015 (w/o attachments) (PDF) 2. Ordinance No. 061, 2015 (PDF) Agenda Item 6 Item # 6 Page 1 AGENDA ITEM SUMMARY May 19, 2015 City Council STAFF Lindsay Kuntz, Real Estate Specialist SUBJECT First Reading of Ordinance No. 061, 2015, Authorizing the Replacement of a Notice of Interim Trail Use and the Conveyance or Vacation of the City’s Rights in a Portion of Property Known as the Rails-to-Trails Property. EXECUTIVE SUMMARY The purpose of this item is to obtain authorization from City Council to terminate an existing Notice of Trail Use for a portion of Rails to Trails property located east of Taft Hill Road and north of Lincoln Middle School that the City does not have any current or future use for and vacate or convey the City’s remaining interests in the property. The City will request a replacement Notice of Interim Trail Use for the remaining Rails to Trails property. In 1988, the City filed with the Interstate Commerce Commission expressing its willingness to assume responsibility for a portion of railroad property that Burlington Northern Railroad Company (“Railroad”) planned to abandon and requested a Notice of Interim Trail Use (“NITU”) to postpone the abandonment and allow the City to use the property, known as the “Rails-to-Trails” property, for trail purposes. After the NITU was issued, the City then entered into an Offer to Purchase and Interim Trail Use Agreement with the Railroad in 1989 subject to the right of the railroad to reactivate its line in the future. The Railroad deeded its interest in the Rails-to-Trails property in 1990. Staff has determined that a portion of the Rails-to-Trails property located east of Taft Hill Road and north of Lincoln Middle School is not needed for any current or future trail use or recreation uses and would prefer to be released from maintenance obligations of the property. This Ordinance would authorize staff to take the steps necessary to terminate the NITU and ask the Surface Transportation Board to replace it with a new NITU covering much less of the property, and vacate or convey any remaining interests the City may have across the section of the property that is no longer needed. STAFF RECOMMENDATION Staff Recommends adoption of the Ordinance on First Reading. BACKGROUND / DISCUSSION In 1988, the Railroad applied to the Interstate Commerce Commission (“ICC”), now the Surface Transportation Board (“STB”), to permanently abandon a railroad strip that is currently known as the “Rails-to-Trails” property. The City also filed with the ICC in 1988 expressing interest in assuming responsibility of the railroad property so that it could be used for trail purposes under the National Trails System Act. The ICC issued a Notice of Interim Trail Use or Abandonment and stated that the railroad strip would be fully abandoned unless an interim Trail Use / Railbanking agreement was entered into per the National Trails Systems Act. The Railroad and the City subsequently entered into an Offer to Purchase and Interim Trail Use / Railbanking Agreement in 1989 which postponed the Railroad’s abandonment of the railroad strip. The Agreement said the Railroad would convey the Rails-to-Trails property to the City for $30,873, but provided for the Railroad to retain the right to reactivate rail service on the line in the future and for the City to hold title for interim conservation and recreation use, which use cannot impair the Railroad’s retained right. The Agreement also granted the Railroad a first right of refusal to repurchase the railroad strip. ATTACHMENT 1 Agenda Item 6 Item # 6 Page 2 In 1990, the Railroad quit claimed the property to the City, but the quitclaim deed did not recite all the restrictions and reservations from the Interim Trail Use / Railbanking Agreement. In 1991 the City and Platte River Power Authority wanted to find out who owned the reversionary rights under the Railroad's right of way in order to negotiate with those owners for the purchase of additional rights necessary to use the Rails-to-Trails property for utility purposes. In resolving the question of ownership, the District Court for Larimer County reviewed the transaction between the City and the Railroad and ruled that the City’s interest in the property was only an easement for recreational purposes, and that the Railroad still owned railroad right of way interest in the property, subject to a right of reverter in the adjacent property owners, if the railroad strip was ever fully abandoned. The City has since used sections of this property for trail connection purposes. Recently, City staff received a request from a property owner that is burdened by the railroad right of way to provide information as to the City’s future plans for the Rails-to-Trails property. Upon review, it was determined by staff that a section of the Rails-to-Trails property just east of Taft Hill Road is not needed for any current or future planned trail use or recreational purposes. After discussing this with the property owner, the owner requested the City consider abandoning the portion of property that was in excess of the City’s needs. City Parks staff are amenable to this request since they would prefer to be released of any maintenance obligations for property that is no longer contemplated for trail purposes as outlined in the Agreement. In order to replace the NITU and vacate the City’s interest in this section of the Rails-to-Trails property, staff proposes to complete the following steps: • Offer to convey the City’s rights in portions of the Rails-to-Trails Property back to the Railroad, pursuant to its right of first refusal, and complete such conveyance if the Railroad exercises that right; • Notify the STB of the City’s desire to terminate its use and ask that the NITU be vacated on a particular date and replaced with a new NITU for the portions of the Rails-to-Trails Property the City wishes to retain; • If the Railroad does not exercise its right of first refusal, vacate any remaining rights in the Rails-to- Trails Property that the City may have received by virtue of the 1990 deed from the Railroad but no longer needs; and • If any of the adjacent property owners request it, execute quitclaim deeds to such adjacent property owners further disclaiming any right the City may have in their properties as a result of the deed from the Railroad. CITY FINANCIAL IMPACTS The property owner that requested the abandonment will be responsible for compensating Real Estate Services a processing fee of $1,500 for the necessary staff time to process the replacement NITU, easement vacation, and quitclaim deed. ATTACHMENTS 1. Location Map Rails to Trails Vacation of Trail Use (PDF) 2. Aerial Detail Rails to Trails (PDF) 3. Recreational Trail Master Plan Map (PDF) - 1 - ORDINANCE NO. 061, 2015 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE REPLACEMENT OF A NOTICE OF INTERIM TRAIL USE AND THE CONVEYANCE OR VACATION OF THE CITY’S RIGHTS IN A PORTION OF PROPERTY KNOWN AS THE RAILS-TO-TRAILS PROPERTY WHEREAS, in December 1988 the Burlington Northern Railroad Company (“Railroad”) filed with the federal Interstate Commerce Commission (“Commission”) a notice of intent to abandon a four-mile section of its rail line right-of-way between milepost 75.00 and milepost 79.00 northwest of Fort Collins (the “Railroad Property”); and WHEREAS, also in December 1988 the City filed with the Commission a statement expressing its willingness to assume responsibility for the Railroad Property so that it could be used for trail purposes under the National Trails System Act, 16 U.S.C. Sec. 1247(d) (the “Trails Act”), and requesting issuance of a Notice of Interim Trail Use or Abandonment (NITU); and WHEREAS, in January 1989 the Commission issued the NITU, which gave the City and Railroad 180 days to enter into an interim trail use/railbanking agreement; and WHEREAS, the NITU noted that the interim trail use/rail banking agreement would be subject to the future restoration of rail service, and that if the City ever intended to terminate its trail use, it must send the Commission a copy of the NITU and a request that it be vacated on a specified date; and WHEREAS, in July 1989 the City and Railroad entered into an Offer to Purchase and Interim Trail Use/Railbanking Agreement (“Agreement”), which stated that the Railroad was going to quitclaim to the City all of its right, title and interest to a portion of Railroad Property between milepost 75 and milepost 77.83 (the “Rails-to-Trails Property”) in exchange for a payment of $30,873; and WHEREAS, the Agreement stated that it and any subsequent conveyance or agreement should be interpreted to conform to the Trails Act; and WHEREAS, under the Trails Act, any interim trail use/railbanking agreements are subject to the right of a railroad to reactivate its line in the future; and WHEREAS, in 1990 the Railroad quitclaimed its interest in the Rails-to-Trails Property to the City, reserving mineral rights, a communications easement and a right of first refusal; and WHEREAS, In 1991 the City and Platte River Power Authority filed a case in Larimer District Court (Case No. 91CV474-3) asking the court to determine who were the lawful fee simple record owners of the possibility of reverter in the Railroad Property, so the City and Platte River would know with whom to negotiate to acquire additional rights in the property for utility projects; and - 2 - WHEREAS, the court did determine the underlying fee owners for the length of the Railroad Property and also held that, under the Trails Act, the Railroad retained ownership of the railroad right-of-way and the City’s interest was only an easement for trail purposes; and WHEREAS, the City did not develop a trail on the Rails-to-Trails Property, opting instead the build the Poudre Trail closer to the river; and WHEREAS, in 1995 the Commission was abolished and its remaining functions were transferred to the federal Surface Transportation Board (the “STB”); and WHEREAS, a property owner whose land is burdened by the railroad right-of-way and the City’s rights in the Rails-to-Trails Property has asked the City to abandon its rights in the Rails-to-Trails Property; and WHEREAS, City Parks staff would prefer to be released from management obligations for property that is not being used and will likely not be used by the City; and WHEREAS, the portion of the Rails-to-Trails Property that staff would like to vacate is described on Exhibit A, attached and incorporated herein by this reference (the “Vacation Property”); and WHEREAS, in order to replace the NITU and vacate the Vacation Property, staff proposes to complete the following steps: • Offer to convey the City’s rights in the Vacation Property back to the Railroad, pursuant to its right of first refusal, and complete such conveyance if the Railroad exercises that right; • Notify the STB of the City’s desire to terminate its use and ask that the NITU be vacated on a particular date and replaced with a new NITU for the portions of the Rails-to-Trails Property the City wishes to retain; • If the Railroad does not exercise its right of first refusal, vacate any remaining rights in the Vacation Property that the City may have received by virtue of the 1990 deed from the Railroad; and • If any of the adjacent property owners request it, execute quitclaim deeds to such adjacent property owners further disclaiming any right the City may have in their properties as a result of the deed from the Railroad; and WHEREAS, the property owner who requested the vacation has agreed to pay a processing fee of $1500 to cover staff's time working on the request; and WHEREAS, Section 23-111(a) of the City Code authorizes the City Council to sell, convey or otherwise dispose of any and all interests in real property owned in the name of the City, provided that the City Council first finds, by ordinance, that such sale or other disposition is in the best interests of the City. - 3 - NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the City Council hereby finds that the conveyance or vacation of the City’s interest in portions of the Rails-to-Trails property as described herein is in the best interests of the City. Section 2. That the Mayor is hereby authorized to execute such documents as are necessary to convey the Vacation Property to the Railroad or to vacate the City’s rights in the Vacation Property, and to quitclaim any remaining interest the City may have in such property to adjacent property owners if requested. Section 3. That the City Manager is hereby authorized to execute such documents as are necessary to ask the Surface Transportation Board to vacate the existing NITU and replace it with a revised NITU. Section 4. That all conveyances and vacations pursuant to Sections 2 and 3 above shall be on terms and conditions consistent with this Ordinance, together with such additional terms and conditions as the City Manager, in consultation with the City Attorney, determines are necessary or appropriate to protect the interests of the City, including, but not limited to, any necessary changes to the legal description of the Vacation Property, as long as such changes do not materially increase the size or change the character of the property interest to be conveyed. Introduced, considered favorably on first reading, and ordered published this 19th day of May, A.D. 2015, and to be presented for final passage on the 2nd day of June, A.D. 2015. __________________________________ Mayor ATTEST: _____________________________ City Clerk Passed and adopted on final reading on this 2nd day of June, A.D. 2015. __________________________________ Mayor ATTEST: _____________________________ City Clerk &YIJCJU" 1BHFPG &YIJCJU" 1BHFPG