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HomeMy WebLinkAbout1996 04-08 EDAP Regular Session • EDA AGENDA CITY OF BROOKLYN CENTER April 8, 1996 1. Call to Order 2. Roll Call 3. Approval of Agenda and Consent Agenda -The following items are considered to be routine by the Economic Development Authority and will be enacted by one motion. There will be no separate discussion of these items unless a Commissioner so requests, in which event the item will be removed from the consent agenda and considered at the end of Commission Consideration Items. a. Approval of Minutes - Commissioners not present at meetings will be recorded as abstaining from the vote on the minutes. 1. March 25, 1996 - Regular Session 4. Commission Consideration Items a. Resolution Authorizing Submission of Bid to the Department of Housing and Urban Development to Purchase the Single - Family Property Located at 6645 Bryant Avenue North in Brooklyn Center • Requested Commission Action: -Adopt resolution. 5. Adjournment MINUTES OF THE PROCEEDINGS OF THE ECONOMIC DEVELOPMENT AUTHORITY . OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA REGULAR SESSION MARCH 25, 1996 CITY HALL CALL TO ORDER The Brooklyn Center Economic Development Authority (EDA) met in regular session and was called to order by President Myrna Kragness at 7:28 p.m. ROLL CALL President Myrna Kragness, Commissioners Kathleen Carmody, Debra Hilstrom, and Kristen Mann. Also present were Executive Director Michael J. McCauley, EDA Secretary Brad Hoffman, Director of Public Services Diane Spector, Community Development Specialist Tom Bublitz, City Attorney Charlie LeFevere, and Council Secretary Carla Wirth. APPROVAL OF AGENDA AND CONSENT AGENDA A motion by Commissioner Mann and seconded by Commissioner Carmody to approve the March 25, 1996, agenda and consent agenda passed unanimously. APPROVAL OF MINUTES A motion by Commissioner Mann and seconded by Commissioner Carmody to approve minutes of the February 26, 1996, Regular Session as printed passed unanimously. COMMISSION CONSIDERATION ITEMS The Executive Director advised under consideration is approval of the development agreement with Sunlite Properties. He advised the agreement serves as the PUD development agreement. The property has need of soil corrections and the proposal is for the City to write down soil correction costs to the developer through Tax Increment Financing (TIF). He noted this is a classic example of the appropriate use of TIF in that it is designed to provide for soil corrections or infrastructure costs which, if not completed, would result in the site not being developable. The Executive Director reviewed the proposed payment schedule and noted that a payment needs to be made December 31, 1997, in the amount of $43,700. Prior to that time, the building will be completed and will be paying full tax in 1998. By 1999 or 2000, the original $43,700 should- be recovered from TIF monies generated from the project. Commissioner Hilstrom asked if housing is allowed with this schedule. The Executive Director advised the housing component will be addressed from proceeds of the sale of the bonds; it will be • attuned to the housing component. 03/25/96 -1- Commissioner Mann questioned the ability to sell the property in the future. The Executive Director • explained the City is putting no money into the project and should the developer default or violate a condition, reimbursement of the increment would go into the district, not the developer. Also, the property cannot be used for tax exempt purposes. RESOLUTION NO. 96-12 Member Kristen Mann introduced the following resolution and moved its adoption: RESOLUTION APPROVING CONTRACT FOR PRIVATE REDEVELOPMENT WITH SUNLITE PROPERTIES The motion for the adoption of the foregoing resolution was duly seconded by member Kathleen Carmody and passed unanimously. ADJOURNMENT A motion by Commissioner Carmody and seconded by Commissioner Hilstrom to adjourn the meeting at 7:34 p.m. passed unanimously. President Recorded and transcribed by: Carla Wirth TimeSaver Off Site Secretarial 03/25/96 -2- �W • M E M O R A N D U M to: Michael I McCauley, City Manager from: Tom Bublitz, Community Development Specialist subject: Resolution Authorizing Submission of Bid to the Department of Housing and Urban Development to Purchase the Single Family Property Located at 6645 Bryant Avenue North in Brooklyn Center date: April 3, 1996 The Brooklyn Center Economic Development Authority (EDA) first considered the possible acquisition of the single- family property at 6645 Bryant Avenue North at the September 11, 1995, EDA meeting. At that meeting, staff informed the EDA the property was in the foreclosure process, was in poor physical condition, and could be a likely candidate to be acquired and demolished for single - family redevelopment. Since September 1995, staff has been monitoring the HUD foreclosure property listings and on Thursday, March 28, 1996, 6645 Bryant Avenue North appeared on HUD's listing of foreclosure properties in their property disposition program. HUD's listing price on the property is $47,000. A summary of information on the property obtained by staff follows: • Staff inspected the property at 6645 Bryant Avenue North in early September 1995, , A copy of a memorandum from the City's Building Official dated September 6, 1995, is attached to this memorandum. At that time, the Building Official concluded the is not a good candidate for rehabilitation given i r condition. prop g g is poo cond t on. Photographs of the property will be available for review at the EDA meeting on April 8. • The City Assessor's office has reviewed several single - family properties in Brooklyn Center of comparable age, condition and size. This data indicates that the value of a single- family property comparable to the 6645 Bryant Avenue North property is approximately $45,000. • The 1996 assessed value for 6645 Bryant is $50,500 ($30,000 building and $20,500 land). • Staff believes the redevelopment potential of this lot is good particularly in consideration of the fact that the lot at 6601 Bryant Avenue North, on the south end of the block, was purchased by the EDA, cleared of a property in a similar condition, • and has been redeveloped into a new single - family property. The 6645 Bryant Avenue lot is also a corner lot as is the 6601 Bryant Avenue lot. The lot dimensions of the Michael J. McCauley, City Manager Page 2 April 4, 1996 6645 Bryant Avenue North lot are 128 ft. by 103 ft. The lot has 128 ft. frontage on Bryant Avenue North. HUD Acquisition Policies The Department of Housing and Urban Development (HUD) no longer gives preference to municipalities in purchasing most foreclosed properties. In submitting bids on properties, cities are treated the same as owner occupant purchasers. While it is not required, HUD strongly suggests that a licensed broker be used in the bidding and acquisition process. Bid forms on the purchase of 6645 Bryant Avenue North are due to HUD by Tuesday, April 9, 1996. Given the short time for submitting bids, I have contacted a local Realtor experienced with the HUD bidding process to broker the acquisition. The broker is Mr. Jack Kelley with Edina Realty. Mr. Kelley s also a former e Housing Commission member. Given the fact that HUD can reject g J any offer not submitted correctly, I felt it was P rudent to enlist the services of a broker for the EDA's first acquisition under the new HUD rules. The broker's "fee (five percent of the purchase price) will be paid by the seller (HUD) and will not increase the FDA's acquisition price if the EDA's bid is accepted by HUD. Summary and Recommendations In consideration of the comparable sales data from the city assessing department showing a value of $45,000, staff has prepared a resolution for the EDA's consideration which authorizes an offer of $45,000 for the purchase of 6645 Bryant Avenue North. It should be noted the lot value represents approximately $20,000 of this amount. MEMORANDUM TO: Tom Bublitz FROM: Clay Larson, Building Official DATE: 6 SEPT 95 RE: 6645 Bryant Ave N I have visited the referenced premises and in my opinion it is a poor candidate for rehab. The cost of interior repair lus bringing the exterior u to n p p neighborhood standards I would estimate in the $30,000 to $35,000 range. The following items are noted: - Although the lot is large, 103 x 129, the site suffers from minimal lawn care and no landscaping. Exterior surfaces of the house need repair and paint. - The roof is a combination of 'flat and pitched areas. The pitched areas appear to be in poor condition. - Windows and doors need replacing. New combination windows and storm doors were installed but have been vandalized. - The plumbing system has been vandalized and heavily damaged. Fixtures are missing. - Basement is wet and mildewed. It is in very poor condition. - The house was full of trash, garbage, and rodents. Most of this has been cleaned up. • Commissioner introduced the following resolution and moved its adoption: EDA RESOLUTION NO. RESOLUTION AUTHORIZING SUBMISSION OF BID TO THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TO PURCHASE THE SINGLE - FAMILY PROPERTY LOCATED AT 6645 BRYANT AVENUE NORTH IN BROOKLYN CENTER WHEREAS, the single - family property located at 6645 Bryant Avenue North (the property) has been offered for sale as a foreclosure property by the Department of Housing and Urban Development (HUD); and WHEREAS, the Economic Development Authority in and for the City of Brooklyn Center (EDA) is authorized, pursuant to Minnesota Statutes Section 469.012, Subdivision 7, within its area of operation, and without the adoption of an urban renewal plan, to acquire real property and to demolish or remove the buildings and improvements thereon; and WHEREAS, the Department of Housing and Urban Development has listed the property located at 6645 Bryant Avenue North and legally described as Lot 3, Block 1, Faith Community Addition, for sale at a listing price of $47,000; and • WHEREAS, the building located on the property is substandard and obsolescent and that such condition and obsolescence is detrimental to the public health, safety, and welfare of the community. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of Brooklyn Center as follows: 1. The EDA hereby finds and determines that the property is substandard and obsolete within the meaning of Minnesota Statutes Section 469.012. 2. The Executive Director is hereby authorized to submit a bid to the Department of Housing and Urban Development for the purchase of 6645 Bryant Avenue North in the amount of $45,000. 3. The Executive Director is hereby authorized to take such further action as may be necessary to acquire the property under the terms and conditions of this resolution including the execution of a purchase agreement and/or sales contract with the Department of Housing and Urban Development for the acquisition of the property. Date President EDA RESOLUTION NO. The motion for the adoption of the foregoing resolution was duly seconded by commissioner and upon vote being taken thereon, the following voted in favor thereof and the following voted against the same: whereupon said resolution was declared duly passed and adopted.