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$1 million payment to Monson family city's first step in cattle feedlot purchase

Today, Feb. 1, the City of Sunnyside coffers are a million dollars less than they were yesterday.

But not to worry, there is no great pressing emergency at hand. Rather, the city is making its first payment on the purchase of the Monson feedlot, located just to the north of Sunnyside.

At its Jan. 24 meeting, the Sunnyside City Council formally approved amending the 2005 budget to cover the first two payments to the Monson family, the first on Feb. 1 and the other on Aug. 31.

The payment that was made to Monson feedlot owner Arvid Monson was for $1 million. The second payment on Aug. 31 will be for $750,000. The city will take ownership of Monson feedlot following the final $750,000 payment on July 31, 2006.

Sunnyside City Manager Bob Stockwell said the money for the purchase of Monson feedlot, which totals $2.5 million, comes from the $7.5 million the city has in reserves. Stockwell said Council will not allocate the last $750,000 payment out of reserves until the 2006 budget discussions.

Some key parts to the contract that will trigger Monson being able to receive the payment begins with the initial installment. As of today (Tuesday), Monson will no longer be accepting cattle at the site. By Aug. 31, all of the cattle are to be removed from the property. The final payment will be made to Monson after he has met the requirements of cleaning up the property.

The actual contract between the city and Monson is 32 pages in length. Stockwell joked how it took longer for the lawyers to formalize the contract than it did for the actual negotiations, which involved city staff and Monson meeting three times.

"There was a mutual respect and a recognition of the needs of both parties," said Stockwell of the negotiations. "There was never any animosity. They deserved the respect of someone who had contributed to the community for a long time."

Monson had asked in the neighborhood of $4.4 million for the feedlot, based on a set price per head of cattle, from the city during talks a couple of years ago. Stockwell said the city went into the most recent negotiations with the standpoint of offering the Monson family a price for the value of the land, not the business.

The contract allows two existing homes on the property to remain intact. The contract states the city will extend a 10-year lease to the parties living in the homes. Rent for one of the homes is $500 and the other is $250. The money from the rent will go into the city's treasury, said Stockwell. However, upon closing of the purchase of the feedlot, Stockwell said the city does have the right to terminate both leases, providing at least 180 days notice to vacate property. Stockwell was quick to point out it is not the intention of the city to become landlords.

"They came with the property," said Stockwell of the homes.

Stockwell said this portion of the contract stipulates the rent is set at a fixed rate for the next 10 years, if the city doesn't opt to terminate the lease.

Another area in the contract deals with Monson retaining all water rights on the property.

"There was none," said Stockwell, as to why the city didn't opt to buy the water rights.

Stockwell said there is a well on the property, but the water is not enough to sufficiently provide for the 150 acres.

Part of the plan for the city is if no other project to build on the feedlot comes along before the deal closes, then the land will be leased out for farming. At that point, the city will negotiate to try and get access to irrigation to farm the land. Stockwell said by farming out the land, the extra nitrate that currently resides in the soil will be extracted.

"All of that (though) is contingent on there not being a proposal," said Stockwell. "It all depends on where we are at in 2006."

The city will be addressing how to pipe water out to the Monson property. Stockwell said a lot of how and when the property will have access to water will depend on how soon development takes place. Stockwell said the idea is to encourage business development along the highway leading to Monson's feedlot to help reduce some of the costs in establishing infrastructure at the site.

As part of the agreement, Monson will be able to continue to run his milling operation near the feedlot. Stockwell didn't include the purchase of the milling operation in the negotiations for a couple of reasons. First, the milling operation is valued at more than $1 million. Stockwell said there was no reason for the city to spend extra money when the milling operation is compatible with any type of development earmarked for the area.

"It is an agricultural area," said Stockwell. "There (is) no reason for them to move."

Stockwell said Monson plans to continue producing feed to distribute to local dairymen. Once the feedlot is gone, the mill operators will not be chopping hay for their feed, reducing the high amount of dust that is created during the process, he said.

Under the contract, Monson will be storing manure from the cleaning of the feedlot on the north side of the city's future property, until all of the manure is sold.

"Once it is composted the odor is gone," said Stockwell. "The fact there will be a pile of compost out there is irrelevant. That pile will never grow. It will just get smaller."

One area of the contract deals with how Monson will not be held liable for any unknown problems with the land after the purchase. Stockwell said the city allowed for this because the site has no history of being used as something that may cause contamination. Stockwell said there was no manufacturing business located on the site or anything that may have further damaged the ground. An environmental review showed only a high concentration of nitrates in the ground.

"It is reasonable," said Stockwell of the condition. "We feel like we informed ourselves enough. The site from an environmental perspective is clean."

The city also has plans to annex the Monson property into the city limits. Stockwell said the city has to work with the county on amending its urban growth boundaries. Stockwell said amending the city's urban growth plan will take place in late fall of this year, November or December. Annexation of the Monson property could come before Council in February or March 2006.

Stockwell said at least until the winter is over, residents probably won't notice much clean-up going on at the feedlot. But starting after today, the number of cattle on the property will be less each week.

"At first it won't be much different," said Stockwell.

Stockwell said residents should start noticing a different look at Monson feedlot in the spring.

Stockwell said he is excited about the purchase of the feedlot, saying it is something residents have been looking at for years.

"This is a new opportunity for the city that we want to make sure we explore properly," said Stockwell.

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