City Council Approves Purchase of 44 Acres of Developable SHIP Property

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The Hermiston City Council agreed Monday night to approve the purchase of 44 acres at the South Hermiston Industrial Park (SHIP).

The intent of the purchase is to keep the land within local control and allow the city to re-sell it for a profit for economic development purposes.

The cost of the property, which lies between Penny Avenue and Feedville Road, is $44,000 per acre for a total purchase price of $1,954,480. Assistant Hermiston City Manager Mark Morgan said the money will come from the city’s Water & Sewer Utility Fund’s cash balance which stood at just over $6.5 million in October.

Morgan said the property is a remaining parcel of what had been the Cook Industrial Site. The overall property has recently been purchased by a cloud competing company for the purposes of building a data center. The company, however, determined that 44 of those acres were surplus and not needed. Morgan said city staff has spent most of 2023 negotiating the final terms of the sale.

Morgan said the city wants to hold on to whatever developable property it can.

“In the span of two years, we’ve seen the vast majority of our developable industrial employment lands either developed or purchased for imminent development,” Morgan said.

Morgan said the city is purchasing the property to maintain local control over a “valuable economic asset in the community.”

He said city staff will market the property for development in parcels 10 acres or larger in size. The asking price will be $75,000 per acre.

“I characterize that as an aspirational price for several reasons,” he said. “It keeps away the tire kickers as well as the folks who may be speculating themselves.” Morgan said the asking price is negotiable and that the city does not intend to hold on to the property for longer than five years. If the city is not successful in selling the property for a profit after five years, Morgan said it will pursue other avenues to liquidate the property for not less than the original purchase price, adjusted for inflation.

Morgan said the land has many assets, including the city’s potable water supply which is available in the north and south ends of the property. There is also sanitary sewer available at the north end. There is power distribution on the north end and power transmission on the south end. Natural gas is available and fiber optics have been extended to Feedville Road on the south end of the property. There will also be an extension of S.E. Ninth Street from Penny Avenue to Feedville Road.

Morgan said the $6.5 million balance in the city’s Water & Sewer Utility Fund has been maintained in order to pay for the large one-time expenditure of replacing the membrane filters at the Recycled Water Treatment Plant. Morgan said those membranes are outperforming their initial design, and aren’t anticipated to need replacement until 2027.

As each parcel is sold, the revenue will go back into the Water & Sewer Utility Fund.

2 COMMENTS

    • City governments should not be speculating on land sales with taxpayer money. Thats for Private entities to do, they can gamble with their own money and that’s ok.

      also just wait. this “ear marked money” that will be spent on that land speculation and then LOW & BEHOLD!!!!! those membrane filters at the Recycled Water Treatment Plant will have to be replaced sooner than 2027 and then what?? an “emergency” special bond to pay for what they spent the funds on for the land…

      Just wait for it.

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