Bids sought for oil, gas leases on city land

In a 6-1 vote Thursday Marietta City Council authorized the advertisement for bids to lease up to 95 acres of city property to oil and gas interests.

Councilwoman Kathy Downer, D-at large, cast the only dissenting vote on the measure.

“I’m not supportive of this, and I won’t support going out for bids for a lease,” she said.

Downer, who has expressed concern in the past about the potential environmental impacts of shale oil and gas drilling operations, said she has been reading a lot about the process and could not vote to allow companies to lease city land for horizontal hydraulic fracturing (fracking) operations.

But Councilman Mike McCauley, D-2nd Ward noted Thursday’s legislation only pertained to advertising for bids on a lease.

“We’re not approving a lease, we’re just going out for bids to get the process started. If we don’t like the bids we receive we don’t have to accept them,” he said.

In January MNW Energy LLC, an investor/buyer for Tulsa, Okla.-based Protege Energy III, offered to lease 35 acres of city property that would be included among 6,100 surrounding acres for a horizontal hydraulic fracturing operation that would be located on property outside the city limits.

The city property would be leased for $4,750 an acre, plus a 17.5 percent royalty based on any product Protege would retrieve from the drilling operation.

Since that original offer, the city administration has suggested MNW or another company may also want to lease another 60 acres within the city limits.

In order to gauge interest from oil and gas companies for leasing the city property, council has authorized the safety-service director to advertise for bids.

Lands, buildings and parks committee chairman Harley Noland, D-at large, noted the original legislation authorizing the bids had been amended to say that no operations disturbing the surface of the ground could take place on leased city property.

“Anything they do would have to be below the surface,” he said.

Councilmen Roger Kalter, D-1st Ward, Tom Vukovic, D-4th Ward, and Michael Mullen, I-at large, suggested tabling a final vote on the bids authorization for two weeks. But safety-service director Jonathan Hupp said if the city delays the process for too long, the option to participate in the lease could be lost.

“All we’re doing is finding out if any more companies are interested,” he said. “If we don’t do this the doors will close for the city. And these companies are already paying money to landowners all around us to lease their properties.”

Council president Josh Schlicher also noted that city council has a limited amount of time to take advantage of the lease offer.

In other business Thursday, council unanimously approved a zoning change from R-3 residential to C-3 commercial for the American Legion Post 64 property at the corner of Eighth and Wooster streets.

Post 64 members have requested the zoning change in order to build a new legion hall on that property. The legion members are also pursuing authorization from the Veterans Administration to construct a veterans clinic at the same location.

Also on Thursday council authorized advertising for bids from firms to do a property appraisal on the municipal building at 308 Putnam St.

The building currently houses several city offices that will be moved into the city hall building at 301 Putnam St. when ongoing renovations are completed there. Once those offices are moved the city plans to put 308 Putnam up for sale.

The measure passed Thursday originally included a request for bids to also appraise the municipal building at 304 Putnam St., but the legislation was amended to only request bids for an appraisal of 308 Putnam.