HomeMy WebLinkAboutCorrespondence PLANNER 3/8/2010
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MEMORANDUM
CITY OF SPRINGFIELD
DATE:
March 8, 2010
TO:
Mary Smith, Accounting Technician/Assessments
FROM:
Brenda Jones, Administrative Specialist
SUBJECT: Reconciliation of Miscellaneous Deposits
Oak Leaf Property- BM 37 Deposit, receipt # 320080000000000602
The following deposit fees totaling $ 500.00 were deposited in Miscellaneous Deposits
account 821-215525 to off-set City cost regarding BM 37 Claim.
City cost for processing 8M37 Application $3,256.74. No refund due to applicant
Deposit
Date
12/1/2006 LRP2006-00033
Oak Leaf Property
Mgmt.
602
Amount of
Deposit
$500.00
Journal Number Name of Applicant Receipt #
Please make the following Joumal entries to re-class the applicant's deposit in .
Miscellaneous Deposit, for reimbursement of City cost incurred on the project:
$500.00
to
481001-100-00000
If YO' h",,, aoy '''''''''0"" pl~" 00"",01 Breoda '"j;' at exte
Date Signed: ~ A1' J1 1.;;.&1 ()
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Approved: City Manager
Date Signed: ) (" II b
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Date Received
MAR 82010
Planner: BJ
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City of Springfield
Development Services Department
225 Fifth Street
Springfield, OR 97477
\ 541.726.3753
DEMAND FOR COMPENSATION
UNDER BALLOT MEASURE 37
PROPERTY OWNER INFORMATION (Please type or print)
McKav Investment Companv. LLC
Name of Property Owner
Name of Firm
James W. Spickerman
Name of Representa~ve (If Any)
Gleaves Swearingen Potter & Scott LLP
Name of Firm
2350 Oalcmont Wav. #204
Street Address
Eugene. OR 9740i
City, State, Zip
485-4711
Phone
975 Oale Street. Suite 800
Street Address
Eugene. OR 97440.1147
City, State, Zip
Fax
686-8833
Phone
345.2034
Fax
485-4714
Public Meeting
Does Owner request a public meeting? Yes
No]!;
Private Real Property Description
A Demand shall be for a single property or separate contIguous properties under the same ownership.
Map and Tax Lot # 17.03.25.34 tax lot 3900
Site Address 1650 Centennial Boulevard. Springfield. OR
Owner's Interest in the Real Property Fee Title
REQUIRED ATTACHMENTS (SEE REVERSE OF THIS FORM) AND COMPLETENESS
This Demand and' all attachments required on the reverse side of this form must be provided' before acceptance by the
City Manager. Only after acceptance will the 180 day processing period commence as specified under Ballot Measure 37.
(Springfield Municipal Code Sec. 2.900 et sec.)
NOTARIZED SIGNATURES
I, J. Douglas McKay, Member- In McKa
depose and say that I/we am/are the owne
<;r20::ofl:De~sa:e I
~re ! Repn!$entatlve SI a
Owner SlgnabJre
Subscribed to me tl1ls 30~ day of 11 OV ~ 20.Jl.Jg". Notary Signature
Notary Stamp
I) OfFICIAl. SEAL
.. 11IACY A STRODI!
.. .i NOTARYPUBlIC-OAEGON
.. ... COMMISSION NO. A388292
MY cor.MIS ON EXI'IRE JAJIlJARY 6 2009
DISCLAIMER NOTICE:
Approval ofcompcnsationormodification, n:m()\lal ornon-application orland use n:guIlltion doC! not WIU'I'Ul1t or otherwise gunruntee that. the pn::lcnt prnpmy owner
orlny SUCCCS30r3 inten:st can legolly use the subject property for the purpose, or in the manner, approved by the City Il5 such use or purpose may impact third parties.
including right:! establi5hed by Covenant!, Conditions and RL!trictions (CC&.R3). other privnte restrictions., or other regulations. restrictions or contnu:ts.
STAFF COMPLETES T,llS SECTION \
File# 1K12JIio.:f11ll Date Demand Submitted /1/'( 0 ~ . Received by: ~, . -fh~
Fee P:- -1 '?D. bO .Date Demand Accepted for Processing ived
'W,R' 82010
Planner: BJ.
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CHECKUST & REQUIRED ATTACHMENTS TO BE SUBMITTED BY PROPERTY OWNER
DEMAND FOR COMPENSATION - BALLOT MEASURE 37
Reference Springfield Municipal Code,~ections 2.920(4), 2.930 and 2.940
1. Application Form. A completed application famn (the front page of this packet must be filled aut) to indude: a) The name,
mailing address, telephone number and authorization signatures for all the property Owners or contract Owners; b)The
designated Owner or agent who is the Owner's designated representative regarding the processing of the application; and c)
Every Lessee and Lessor of the property and their mailing address and telephone number. Please use additional sheets if all
the information cannot fit an the front page.
2. Property Description. A legal description and tax lot number of the property as well as a street address far the property
(if any).
3. Title Report A title report issued within 30 calendar days of the application's submittal, induding: a) Title history; b) A
statement of the date the Owner acquired Ownership of the property; c) The ownership Interests of all Owners of the
property; d) Every person or entity holding a lien against or security interest In the property, and (e) Every person or entity
holding a future, contingent, or ather Interest of any kind In the property.
4. Copy of Regulations Applicable to the Demand A statement specifically identifying all the sections of the Springfield
Municipal Code, Springfield Development Code, or ather current land use regulation that allegedly restrict(s) the use of the
real property and allegedly causes a reduction In the fair market value of the property.
5. Demand Statement. A statement specifying: a) The proposed use of the property; b) The amount of the Demand and the
fair market vaiue of the property before and after application of the identified land use regulation; c) To wham any
compensation determined must be paid and why the Owner is entitled to compensation under the requirements of the
provisions added to ORS Chapter 197 by Ballot Measure 37 (see also Item 6 below).
6. Demand Criteria. A statement addressing s!I of the fallowing criteria: a) The City has either enacted or enforced a land use
regulation that restricts the use of private real property or any interest therein; b) The restriction on use has the effect of
redudng the fair market value of the subject property or any interest therein; c) The identified land use regulation was
enacted, enfarced or applied after the current Owner of the property (the OWner) became the Owner; and d) The identified
reguiation is not an exempt reg.Jlation as defined in SMC Section 2.920(4).
_7. Appraisal. An appraisal by an appraiser licensed by the Appraiser Certification and Ucensure Board of the State of Oregon
supporting the amount of the Demand that addresses the following issues: a) The appraisal must expressly note all existing
Infrastructure limitations and value the property without an assumption that the infrastructure will be improved at
governmental expense or through discretionary governmental action; b) The appraisal must expressly address and indIcate
the amount of the alleged reduction in the fair market value of the property at the time a complete Demand is submitted to
the City by showing the difference In the fair market value of the property resulting from-enactment or enforcement of each
of the identified regulations individually identlfied in the Demand and after the application of ail of the identified regulations
cumulatively; and c) The appraisal must expressly consider the effect of the aforesaid Ballot Measure 37 on the availability
of ather real property induding the extent to which the supply of such ather real property is or will be.lncreased due to the
non--enforcement, discontinuance, repeal or waiver of regulations following the passage of Ballot Measure 37 (see also Item
11 below). .
8. Additional Documentation. Caples of any leases or Covenants, Conditions and Restrictions ("CCR's) applicable to the real
property, if any, that Impose restrictions on the use of the property.
9. Acc:ess to Property. Written permission for access to the property by the City Manager or his/her designee induding but
not limited to agents or appraisers necessary to evaluate and appraise the property and the Demand for purposes of
determinIng whether or not regulation(s) have had the effect of redudng the fair market value of the property.
_ 10. Fee. A Demand shall include a fee established by Coundl resolution to at least partially cover the City's cost of processing
the Demand. If a Demand is detemnlned to be a Valid Demand' the City shall reimburse the Owner far any fee paid.
_11.Statement Regarding Exempt Land Use Regulations. A statement by the Owner making the Demand of why the
fallowing exemptlons to the requirement far compensation do not apply: a) Restricts and prohibits commonly and
historically recognized public nuisances under common law, induding but not limited to SMC Chapter 5 as amended from
tlme to time and the criminal laws of the State of Oregan and the City of Springfield; b) Restricts or prohibits activities far
the protection of public health and safety, such as fire and building codes, health and sanitation regulations, and pollution
control regulations; 0) Is required to comply with federai law; d) Restricts or prohibits the use of property far the purpose of
selling pomography or perfomning nude dandng; or e) Was enacted prior to the date of the acquisition of the property by
the Owner, or prior to acquisition by a family member of the Owner who owned the subject property prior to the acquisiti:ln
or Inheritance by the Owner, whichever came first [If "family member" status is claimed, it must also be addressed in.the
title report required by Item 3. above].
Date Received
. MAR 8 2010
Planner: BJ
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December 1, 2006
Hand Delivered
Attn: Greg Mott or Gary Karp
City of Springfield
Development Services Department
225 Fifth Street
Springfield, OR 97477
Re: Demand for Compensation Under Ballot Measure 37
Dear Development Services Department:
This fIrin represents McKay Investment Company, LLC in its demand
pursuant to Ballot Measure 37 for waiver or compensation pertaining
to land use regulations for property located at 1650 Centennial
Boulevard, SpringfIeld, Oregon, map no. 17-03-25-34, tax lot 3900.
Attached as Exhibit A is the status of title report confIrming our
client's ownership of the subject property.
McKay Investment Company, LLC intends to construct a major
commercial development on the subject site. More specifIc information
concerning the proposed development may become available during
the processing orthis claim.
As you know, Ballot Measure 37, ORS 197.352(1), provides that if any
land use regulation placed on properties has the effect of "reducing the
fair market value of the property, or any interest therein...," the owner
of the property must be paid compensation for the loss of value or. the
land use regulations waived. The subject property was conveyed to
McKay Investment Company by Warranty Deed on August 1, 1962. A
copy of that deed is attached as Exhibit B. That company, a co-
partnership, included as partners J. Douglas McKay and Linda Lee
McKay which is reflected in Exhibit B.
Phone:
(541) 686-8833
Fax:
(541) 345-2034
975 Oak Stn=et
Suite 800
Eugene, Oregon
97401-3156
Mailing Address:
P.O. Box] 147
Eugene, Oregon
97440-1147
Emai!:
info@orbuslaw.com
Web-Site;
www.orbuslaw.com
Sean M. Bannon
Frederick A. Batson
)onV, Bumtatte
Josh", A. Clark
A.j. Giustina
Thomas P. E. Hemmmn*
Dan Webb Howard
Stephen O. Lane
William H. Martin'
Laura T. Z. Montgomc=ryt
Tanya C. O'Neil
StandleeG. Potter
Ian T. Richardson
Martha), Rodman
Douglas R. Schultz
Malcolll) H. Scott
James w. 5pickerman
Kate A. Thompson
Jane M. Yates
On January 1,2000, the subject property was conveyed by McKay
Investment Company, aka McKay Investment Co., a partnership, to 'Also.dmitt,d
McKay Investment Company, LLC by Warranty Deed. A copy of 93ate Received
MAR 8.201Q
Planner: BJ
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€:ity of Springfield
Development Services Department
December 1,'2006
Page 2
deed is attached as Exhibit C. McKay Investment Company, LLC
included as members J. Douglas McKay and LindaMcKay Korth,
members of the original partnership. A copy of the fIrst page of the
January 1, 2000 Operating Agreement confIrming the continued
ownership is attached as Exhibit D.
While it may not be the case that some transfers between one entity
and another entity constitutes a change in ownership, here J. Douglas
McKay and Linda McKay Korth have retained ownership of the
property "or an interest therein" from the date of the 1962 conveyance.
Our client seeks compensation for the effect on the value of the
property for all land use regulations applied to the subject property,
since that 1962 date or a waiver of those regulations. Adequate
compensation for the burden of regulations adopted since 1962 would
exceed that indicated in the appraisal referenced below.
I am aware that some local governments have claimed some transfers
, to limited liability companies constitute a change in ownership. As
indicated above, particularly in this instance, we do not believe that is
the case. For purposes of this claim, should there be a fmal decision
on that issue at the Oregon Supreme Court or the Oregon Court of
Appeals determining such a transfer is a change in ownership, we'
demand compensation or waiver of all nonexempt regulations applied
to the property since January 1, 2000. Regulations applied'to the
property since that 2000 date for which waiver or compensation is
sought include, but are not limited to, application of the Nodal
Development Overlay designation to the property, the Mixed-Use
Commercial designation, all provisions of the Springfield Development
Code in Article 31, Minimum Development Standards and Site Plan
Review Standards, and Article 32, Public and Private Improvements.
Attached as Exhibit E is a letter from Richard J. Duncan, MAl, SRA,
Duncan & Brown, establishing the effects of the Mixed-Use
Commercial zone on the value of the subject property.
Attached as Exhibit F is a supplemental letter provided by Alan Evans
pertaining to the effect on value of these regulations and, in particular,
the effect of site review requirements on the value of the property. Mr.
Evans has been a commercial real estate broker with a primary focus
on retail real estate for more than 20 years.
The intent is to include in this claim all necessary information for ~~ .
City to process the Measure 37 claim. While there may be indivi~te Received
MAR 8 2010
Planner: 8J
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City of Springfield
Development Services Department
December 1,"2006
Page 3
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requirements of the City ordinance for such a claim which may not be
addressed here, ORS 197.352 does not contain such requirements but
only the requirement of a demand on the government body. If there is
additional information that would be of assistance in processing this
claim, please advise me.
Attachments:
Filing Fee $500
Exhibit A Title Report
Exhibit B Warranty Deed (1962)
Exhibit C Warranty Deed (2000)
Exhibit D Operating Agreement (1/1/00, 1st page)
Exhibit E Duncan & Brown Report (9/19/06)
Exhibit F Alan Evans supplement letter (11/28/06)
Jca
cc: McKay Investment Company, LLC (w/o att)
Joseph J. Leahy (wiatt)
Date Received
MAR 8 2010
Planner: BJ
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Exhibit E
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DUNCAN & BROWN, Inc.
REAL ESTATE ANALYSTS
iJJ RICHARD]. DUNCAN, MAl, SRA
COREY S. DINGMAN
JASEN D. HANSEN
\
ASS0CL47ES
moMAS S. MORGAN
ALAN ClARK
DAVID 1. CEIl.ERS
LEAH CARTER
Cl.lNT BECRAFT
September 19, 2006
OF COUNSEL
JOHN H. BROWN. MAl
McKay Investment Company, LLC
2350 Oakmont Way, Suite 204
Eugene, OR 97401
RE: Mohawk Property
Springfield, OR
Dear Ms. Korth-
This letter is in response to our recent conversation regarding the approximate 9 acres as
referred to above that is located adjacent to the Bi-Mart property on Mohawk Blvd. in.
Springfield. You were interested in my input concerning any potential loss of value due
to the change in zoning from Major Retail Center to Mixed-Use Commercial.
As a basis for discussing loss, the $5,600,000 offer you have on the property would seem
to be a good starting point as a basis of the value of your property "as vacant" under its
prior zoning of MRC, which I understand would have to be the zoning for tl:ris buyer. The
rezone of properties to Mixed-Use Commercial under the Springfield code is somewhat
similar to that in the Eugene code. Although Mixed Use zoning has occurred, both
communities are having difficulty attracting redevelopment into these mixed-use areas.
The main problem is the high cost that is incurred in this type of development. Mixed use
developments have not been shown to be financially feasible in either community. Mixed
use commercial development may be successful at some point in the future, but to date
mixed use projects are generally untested. I have had discussions with several developers
who have tried to develop projects that fit within these mixed-use .areas. To date all have
said that without major subsidies the projects simply do not "pencil out". The main
reason is because of the high increase in development costs that do not return a
significant amount of income to cover the cost. The building and site cost components for
development are the most difficult to control, because there are so many different
building elements that are brought together. In most situations where these projects have
been "successful", either land is acquired at a very low cost and/or there are government
subsidies or abatements that allow for an increased cash flow, or reduced cost; usually
occurring when land is given or sold cheaply. A great example of that currently is the old
Sears site in Eugene, in which the City is looking to offer the property at a nominal price
simply to attract a mixed-use project. After reviewing the Springfield devejj'afe ~eceived
1260 CHARNELTON STREET, EUGENE, OREGON 97401
(541) 687-1938/683-3400 FAX (541) 683-0932 infO@duncanbrown.co"h1 ' BJ
ROSEBURG, OREGON (541) 673-3300 r anner: .
MAR
82010
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and other proposed projects, it would seem that a large reduction in the value of the land
would be required before a project might be successful.
After reviewing the information on mixed-use projects, it's evident that likely the highest
and best use of the property is as it currently exists, because the return to value based on
current income exceeds the value of the "mixed use zoned" land "if vacant" if a new
project is required to be a mixed-use development (as discussed above). Truly, if
someone is to buy today under the current zoning, that buyer would look to the existing
property and its current income stream as the basis of value. I do not believe a buyer
today would add value with the hope that at some unknown future date the property could
be redeveloped. I would venture to say that, at this point, the Mohawk area of Springfield
is one of the less desirable locations for a mixed-use project. The economics and
demographics of some of the other mixed-use areas in Eugene-Springfield would likely
better afford an opportunity for a more successful project.
Since the conclude Highest and Best Use of the property currently is as it exists, a simple
income approach will offer a general value range for the property. A typical buyer would
expect a property of this caliber to be purchased for an overall rate in the .075 to .080
range. Based on a review of the property's 2005 and year-to-date 2006 income and
expense information, the expected net operating income (NOl) would be about $275,000
to $300,000. Based on the above discussed overall rates and expected NO!, the current
value of the property based on its income/expense data is well below the current offer of
$5,600,000.
Hopefully this information will help in your decision as to how to best work with that
property.
Respectfully Submitted,
Date Received
MAR 8 2010
Planner: BJ
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Exhibit F
COMMERCiAL REAL ESTATE
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November 28, 2006
Mr. James Spickerman
Gleaves, Swearingen, Potter & Scott, LLP
975 Oak Street, Suite 800
Eugene, OR 97401
Re: M 37 Claiml Mohawk Shopping Center
Dear Jim:
I have reviewed the letter that Rick Duncan has written and wish to offer some
supporting evidence of loss of value. The imposition of the MUC zone makes the
property unusable for its highest and best use, which is for a major retail format anchor
store. This use is consistent with the owner's present offer of $5,600,000.
If this property is sold as-is, with the MUC zoning in place, we would have to capitalize
the existing net operating income of approximately $300,000. The capitalization rate
would be heavily weighted by the physical and functional obsolescence of the present
improvements, the short-term nature of most of the leases, and the fact that the property
is contaminated and subject to a DEQ clean up. A market rate cap without these factors
would be approximately 7.5%. With these mitigating factors, I believe that the
appropriate cap rate would be between 9.5% and 10%, say 9.75%. This results in a
value of $3,077,000. Therefore the loss in value is $2,523,000.
You have asked me for an opinion about the loss in value associated with Site Review.
This is a more difficult task as there is a great deal of subjectivity involved but I will
attempt to quantify for you as best I can. For a major format retailer to prepare the
submittals necessary for site review, an applicant can expect to pay at least $300,000 in
professional and City fees associated with a complete submittal, and expect that it will
add at least six to ten months to the project between the time getting to completeness
and the one hundred and twenty day period ih which the City has to respond. If we
assume an implicit cost of funds of 9% and split the range in time and say eight months,
then the loss of value associated with the time this adds to the project is $378,000.
If I can be of further assistance, please do not hesitate to ask.
Sincerely,
c:u.--- $i/~
Alan Evans
101 East Broadway
Suite 101
Eugene, OR 97401
TEL: (541) 345-4860
FAX: (541) 345-9649
"'Date Received
,MAR 8 :2010
Planner: BJ
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Date Received
MAR 8.2010
Planner: B.J
225 Fift!1' Street
Springfield, Oregon 97477
541-726-3759 Phone
.
eity of Springfield Official Receipt
Development Services Department
Public Works Department
RECEIPT #:
1:42:20PM
3200600000000000602
Date: 12/01/2006
Job/Journal Number Description
LRP2006-00033 · Ballot Measure 37
Payments:
Type of Payment
Check
Paid By
OAK LEAF PROPERTY MGMT emm
Item Total:
Check Number Authorization
Received By Batch Number Number How Received
. Amount Due
500.00
$500.00
Amount Paid
8744
In Person
Payment Total:
$500.00
$500.00'
Date Received
. MAR 82010
Planner: BJ
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Date Received
MAR
8.2010
Planner: BJ
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08-Mar-10
0.00
" DEPOSITS-MEASURE 37 821-215525
ACCOUNT RECONCIUATlON: 1/31/10
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DATE IRANS TYPE I liTEM DESCRIPTION
30-Nov-06
1-Dec-06
1-Dec-06
1-Dec-06
1-Dec-06
17-Jul-07
1275
1275
1275
1275
1275
1275
BLDGJPROJ IDSD RECEIPT #
SHILOINN ,-*p~ OO"-OOO~I
PURCELL LIVING TRUST L-r:l..P?-oo ~- 00 (J 3;1-
OAK LEAF PROPERTY MGMT L.R-P 61 0 0 ~ -C 0" ?::I
FIRST BAPTIST CHURCH EUGENE LJJ.{' ~O 0 (,- Of) 0 B+
BARBARA PARMENTER L.-f<.p.;j /l"O II - 0 Co?'?
PHILIP MARVIN ~Ii ;}.O''1~OOll"J.-?
v:\common\mary\215525 Measure 37 Deposits
AMOUNT I ACCl. TOTAL I
598 ~ 500.00
600~ 500,00
602-1'1'U:trf 500.00
17131YJLt 500.00
1714 IUu 500.00
1146 lUUP 500.00
3,000.00
3,000.00
OK TO FLG
Date Rece\ved
MAR 82010
Planner: BJ
L24g
8M 37 APPLICATION PROCESSING FEES
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Oak L.eaf Property First Baptist Ch4~ch . .~ Philip Marvin (TOO
Shilo Inn Purcell L.ivlng Trust Management (Eugene) Barbara Parmenter Blue; L.L.C)
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Journal Number LRP2006-00031 LRP2006-00032 LRP2006-00033 LRP2006-00034 LRP2006-00035 LRP2006-00023
Date Submitted November 30, 2006 December 1, 2006 December 1, 2006 December 1, 2006 December 1, 2006 Julv 17, 2007
City Attorney Cost:
Time Spent on Application 3.80 Hours 3.70 Hours 24.40 Hours No Time Expended 26.60 Hours . 3.90 Hours
Cost $342.00 $407.50 $1,539.50 . $0.00 $2,695.00 $435.00
Planner Assigned to Application Gary Karp Mark Metzger Mark Metzger Mark Metzger Gary Karp Gary Karp
Time spent on:
~ication Intake . 0.30 0.30 0.30 0.30 0.30 0.30
Application Review for Completeness . 2.00 2.00 2.00 2.00 2.00 2.00
Prepare Inc~ete Letter 2.00 2.00 2.00 2.00 2.00 2.00
Mail Incomplete Leter 0.30 0.30 0.30 0.30 0.30 0.30
Review revised materials 1.00 1.00
Prepare Staff report 20.00 20.00
Pre-"are Notice 1.00 1.00
Mail Notice 0.30 0.30
Respond to notified Residnets 0.50 0.50
Present Report to City Council 1.00
Prepare Notice of Decision 0.50
Total Hours Soont 4.60 4.60 28.90 4.60 27.40 4.60
Planner Hourly Charge-Out Rate $59.35 $59.42 $59.42 $59.42 $59.35 $59.35
Total Cost for Application Process $273.01 $273.33 $1,717.24. $273.33 $1,626.19 $273.01
City Total Cost $615.01 $680.83 $3,256.74 $273.33 $4,321.19 $708.01
Amount of Deposit Submitted $500.00 $500.00 $500.00 $500.00 $500.00 $500.00
Balance Due to City $115.01 $180.83 $2,756.74 -$226.67 $3,821.19 $208.01
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