Livingston Board of Aldermen rejected a proposal to pay money to resolve an oil lease as part of an airport litigation case.
City Attorney Andre Greppin told Aldermen Monday night the oil lease would need to be capped and abandoned, or purchased by the city, so the airport can expand its runway. Greppin said an appraisal on the property revealed that the oil lease is worthless. However, the owner of the oil lease is asking for an estimated $55,000 for the oil lease. With being far apart on the estimated value, members asked Greppin what would happen if they decided not to purchase the oil lease.
“Well, so we have eminent domain proceedings currently pending, so those will just continue,” Greppin said. “And if we can’t come to an agreement and it’s not resolved, then we’ll have to have a trial over what the value of the oil lease is.”
Greppin said if the city did not elect to pay the demand, he does not see any other way the oil lease could be resolved other than through trial.
Greppin said he believes that the owner of the oil lease would rather have $55,000 than keep the oil lease.
“He has brought up several times that it is not just the value of the mineral rights,” Greppin said. “It’s the infrastructure, the cost of the tank, the underground connectivity, the pumps. He says there is some value in that, obviously, well, I don’t think he put the pump in, but somebody had to spend money to put the stuff in, so that’s his position.”
The council asked if the city would have to do anything if the city allowed the owner to have access to the oil tank. Greppin said not that he is aware of, but he is working to have a for sure answer.
“There are a ton of really complicated FAA rules that I am not sure about,” Greppin said. “So we have several consultants and somebody with T-DOT who are very knowledgeable and are working with us on this, so that is something that we can ask. I know I have raised that possibility before, and I think that still remains a possibility.”
The council unanimously voted to reject paying the $55,000 for the oil lease.
