Rochester, MN (KROC-AM News) - A purchase agreement has been worked out involving property for a future Rochester substation.

The agreement involves two parcels at 1325 Marion Road SE, a site designated earlier as suitable for the project. RPU has been negotiating the purchase for an extended period. The property is owned by Muhubo Karey and his wife Abdisalan Sabriye.

The negotiated price was just over $158,000.

RPU says “While the purchase price is 28% higher than the average appraisal, it is within the limits directed by the board and results in a positive acquisition with the owner and ultimately avoids the risk and expense associated with condemnation.”

The recommendation will be taken up by the RPU Board at its Tuesday meeting. It will also need City Council approval.

RPU says the new substation is needed to meet expected growth in the downtown, much of it driven by Mayo Clinic-related projects. A preliminary estimated cost of the project ranges from $26-million to $33.5-million. The current estimated cost of the substation alone is between $14.4-million and $17-million.

Under a Memorandum of Understanding approved earlier by the RPU board, Mayo would pay half the cost of the substation and contribute an unknown amount towards the duct and manhole system. The agreement would allow Mayo to have exclusive access to some of the power from the substation.

News Update: Cold weather is headed to the Rochester area - just in time for Halloween.