For the second time in as many months, the Clinton City Council will ponder the possible sale of the municipal dock to the American River Transportation Co.
Now many residents are probably wondering why the council is even considering that idea, since last month’s discussion didn’t get very far. At that time, a public hearing was cancelled and possible council action quashed by City Administrator Jeff Horne, who said the decision “was made to give due consideration to the expressed wishes of the citizens of the city of Clinton and their current desire to retain ownership of the real estate.”
So why is it coming back for more discussion?
Probably the best way to describe it is to call it due consideration, the same words used when it was decided to halt discussions last month.
The bottom line is that it comes down to business both for ARTCO and the city.
First of all, the dock is 47 years old, just three years shy of its 50-year lifespan. ARTCO, which does business as a subsidiary of Archer Daniels Midland and has rented the dock from the city since 2002, has not been able to use the dock for two seasons because of its condition. Because of that, the company is at a crossroads with the city. An ill-written lease agreement between the city and ARTCO does not lead to a solid conclusion about who is responsible for repairing wear and tear to the dock, the reason that it is in a state of disrepair.
ARTCO wants to know if the city will sell the dock. If the city will sell it and ARTCO, which has the authority to match the top bidder, gets ownership then it will invest the estimated $1.4 million to replace the dock, a company official recently told the city’s Internal Operations Committee.
However, if the city won’t sell it, then the company’s goal is to just make it usable, something that can be done for $400,000 and will be a 15-to-20-year fix.
In this case, both sides say, ARTCO probably would pay for the repairs first and then legal action would be filed against the city so a judge could decide who is responsible to pay for the repairs.
It was during this discussion that it became apparent the city will have to make its final decision on whether to rid itself of the dock — and soon.
The members of the committee were split about this, with At-Large Councilman Mark Vulich saying he would never vote to sell the dock. He disputed whether the value of that dock was determined correctly by the appraiser who looked at it prior to the last sale discussion as well. That appraisal set the greatest value of the dock at $9.4 million. ARTCO says when repair figures are deducted and the $5.4 million in ARTCO equipment that is sitting on the property is subtracted from the value, the final amount comes in far lower than what ARTCO believes is a reasonable purchase price. ARTCO realized that offer would have been too low and decided $6.7 million was a reasonable purchase price.
But there are other unknowns as well. Vulich says the city is undercharging ARTCO in the lease and council members opposing the sale last month claimed the city would lose out on $23 million in rental revenues over the next 45 years if they sold it. But others criticized those numbers as not reflecting present-day value, adding that the council needed to look closer at the appraisal of the dock, issues with maritime law and other factors that could go into selling one of the city’s most valuable pieces of property.
Another question is what a possible sale would end up meaning in tax revenue for the city. Currently, the property is not taxed since it is owned by the city. If it is sold, ARTCO — as the owner — would pay taxes.
This committee is right to forward the measure on for more work and discussion among the full council: It’s time to push the pencils on this and get the accurate answers about the property’s value, how much the city should be getting for rent, whether the city can afford to fix it up or give ARTCO a credit on its rent should the judge rule in ARTCO’s favor, how much the city could reap in a sale and how tax revenues fit into the equation.
Only when the council has all of these answers can its members make a truly informed decision about which is the best way to go.
This is Charlene Bielema’s weekly take on issues in the Clinton area. She is a Fulton, Ill., native and has been employed with the Clinton Herald since June 1995. She has been the Herald’s editor since 2002.