Council to tackle expansion issues
By William Lundquist
Argus Observer
Monday, December 3, 2007 12:42 PM PST
Ontario - Helping the Pepsi-Cola Bottling Company and Flying W Aviation expand their operations will be the main topics of Monday night’s Ontario City Council meeting.
A public hearing is scheduled for 7:30 p.m. on the proposed sale of 10 acres of city land, called the Stelling property, to Pepsico, which wants to relocate its distribution center from its current location on Southeast Ninth Avenue to the new site at Yturri Beltline and Northwest Fourth Avenue.
Because the action would be a relocation, not an additional facility, Mayor Joe Dominick said there would probably be a net gain of two jobs.
According to a report by former Ontario City Manager Scott Trainor, Pepsico is offering $16,500 per acre and wants the entire 10-acre portion of the 89-acre Stelling property, which the city purchased in 1993. If the City Council accepts the offer, it will have to take action on a resolution passed about a year ago setting the minimum price of any Stelling property at $20,000 per acre. The city purchased the entire 89 acres for $115,000, and the Malheur County assessor has listed the real market value of the 10 acres at $58,000.
One possible complication for the deal is that Ontario Fire and Rescue Chief Terry Mairs would also like about half of the 10 acres for a fire station or substation. He said he was looking at the same top-of-the-hill location Pepsico wants to build on, and needs the same kind of highway access it wants.
Dominick said that should not be a problem. He explained that Pepsico does not need the entire 10 acres, but believed it could start building by spring if it bought the entire parcel and worried about splitting off part of it later.
City Councilman Bruce Tuttle said Pepsico was willing to entertain a “real reasonable” lease for the city, or might even sell a portion back to the city for what they paid for it.
City Councilman Dan Cummings said the city might also run into problems with state regulations by trying to put a city facility on prime commercial land. Trainor recommended the city retain its rights on the fire station and road right of way when it sells the property.
Cummings said he would have an issue with the city having to come back later and negotiate for the fire station and right of way.
Dominick said another advantage of selling to Pepsico is that it is emphasizing itself as a “green” company now and likes the idea of putting in a wetland at the bottom of the hill on the property.
City Attorney Larry Sullivan said the public hearing will be advertised, and if there is no public comment, the council may be able to skip an executive session discussion scheduled for later in the evening.
Dominick, who has been negotiating with Pepsico, declared ex parte contact, but said since the deal would not result in any financial gain to him, he will be voting with the rest of the council on the sale.
The council is also scheduled to vote on two related proposals that would help another business: Flying W Aviation. The company’s plan, Trainor said, is to build a new commercial hangar at the Ontario Municipal Airport and sublease a portion of it to Saint Alphonsus Regional Medical Center’s LifeFlight operation.
The city would make that possible by agreeing to lease land for the hangar for $1,000 plus 11.24 cents per square foot annually. The lease agreement said Joe and Monica Williams, the owners of Flying W Aviation, will lease at least 7,000 square feet from the city, but the proposed building will be more than 10,000 square feet. The lease will initially be for 20 years with automatic 10 year renewals.
The city would also loan Flying W Aviation $74,000, of the total project cost of $370,000, from its Business Loan Fund at 5.5 percent interest for 10 years. The city’s Building Loan Fund Committee recommended approval.
“It’s pretty straightforward,” Trainor said, “But it will tap out our loan fund.”
Dominick said the fund would have about $16,000 left after the loan.
The new hangar, Tuttle said, will allow LifeFlight to serve Ontario more or less permanently. He said the loan fund is there to help bring in business, and this loan will do that.
In other action, the council will discuss boosting Ontario Police Chief Mike Kee’s salary by $1,000 a month while he serves as interim city manager. In that role he could compensate Capt. Mark Alexander for serving as interim police chief.
