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HomeMy WebLinkAbout1994 05-09 EDAP Regular Session EDA AGENDA CITY OF BROOKLYN CENTER MAY 9, 1994 (will reconvene EDA meeting after adjournment of City Council meeting) 1. Call to Order 2. Roll Call 3. Approval of Agenda and Consent Agenda -All items listed with an asterisk 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 in its normal sequence on the agenda. 4. Approval of Minutes: * a. April 25, 1994 - Regular Session 5. Public Hearing: (7:00 p.m.)' ' a. Regarding Sale of 5206 Drew Avenue North to Twin Cities Habitat for Humanity 1. Resolution Authorizing Execution of Purchase Agreement for Sale of 5206 Drew Avenue North to Twin Cities Habitat for Humanity 6. Resolutions: * a. Authorizing Execution of Purchase Agreement for the Acquisition of 6933 Brooklyn Boulevard and Authorizing Payment for Acquisition Costs * b. Authorizing the Acquisition of Certain Real Property Within the City of Brooklyn Center and Establishing Offer of Just Compensation for Said Property Located at 5900 Emerson Avenue North in Brooklyn Center 7. Adjournment C uwg Mce iog Date May 9, 1994 31 Cuy of Brooldyn Center Agenda A= N bor Request For Council Consideration • Item Description: EDA MINUTES - APRIL 25, 1994 - REGULAR SESSION Department App al: Brad H an, Director of Community Development Manager's Review/Recommendation: No comments to supplement this report Comments below /attached Summary Explanation: (supplemental sheets attached �) i Recommended City Council Action: MINUTES OF THE PROCEEDINGS OF THE ECONOMIC DEVELOPMENT AUTH OF THE CI TY OF BROOKLYN CENTER IN THE COUNTY OF H ENNEPIN AND THE STATE OF MINNESOTA REGULAR SESSION APRIL 25, 1994 CITY HALL CALL TO ORDER The Brooklyn Center Economic Development Authority (EDA) met in regular session and was called to order by President Todd Paulson at 7 :17 p,m. ROLL CALL President Todd Paulson, Commissioners Celia Scott, Dave Rosene, Barb Kalligher, and Kristen Mann. Also present were City Manager herald Splinter, Public Works Coordinator Diane Spector, Finance Director Charlie Hansen, Director of Community Development Brad Hoffman, Planning and Zoning Specialist Ron Warren, Community Development Specialist Tom Bublitz, City Engineer Mark Maloney, City Attorney Charlie LeFevere, and Council Secretary Barbara Cullman. Rl"SOLUTIONS The City Manager presented a Resolution Approving Modification of Project Plan for Housing Development and Redevelopment Project No. 1 (Formerly Earle Brown Farm Redevelopment Project). RESOLUTION NO. 94 -14 Commissioner Celia Scott introduced the following resolution and moved its adoption: RESOLUTION APPROVING MODIFICATION OF PROJECT PLAN FOR HOUSING DEVELOPMENT AND REDEVELOPMENT PROJECT NO, 1 (FORMERLY EARLE BROWI�t FARM REDEVELOPMENT PROJECT) The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Kalligher, and the motion passed unanimously, R ECESS There was a motion by Commissioner Kalligher and seconded by Commissioner Celia Scott to recess the meeting. The motion passed unanimously. T he Brookl Center Economic Development Authority recessed at 7;19 p.m. 4/24/94 - 1 - RECONVENE The Brooklyn Center Economic Development Authority reconvened at 9:05 p.m. APPROVAL OF MINUTES APRIL 11, 1994 - REGULAR SESSION There was a motion by Commissioner Scott wid scconded b Commissioner Kalligher to approve the minutes of the April 11, 1994, EDA meeting as printed. Tho motion passed unanimously, RESOLUTIONS - CONTINUED The City Manager presented a Resolution Authorizing Salc of Certain Property Locatcd at 6601 Bryant Avenue North, Brooklyn Center, Minnesota, Pursuant to Minnesota Statutes Section 469.012, Subd, 7, and Section 469.029, He explained it concerns the sale of EDA - owned single- family lots, The Community Development Specialist explained in the past the City has advertised lots for sale and sold them to a builder He mentioned the possibility of selling them to a non - profit such as the CO-OP Northwest Community Housing Development Organization. He said this would manage person rc uire a full -time to he transactions. He added this assures � a t et p g more control over what is developed on the lot. The Community Development Specialist updated the EDA there has been interest expressed in one lot on 6601 Bryant Avenue North. He pointed out the photo of the likely design Mr. Wright would use; the price of the home would be about $93,000. Commissioner Rosene asked whether he would be having a builder build an identical house. The Community Development Specialist replied he was uncertain as Mr. Wright is nor committed to a plan at this time and would have to get approval of a .final plan, but that this is an example of the type of house being considered, Commissioner Rosene commented the plan looks like it would fit well and is good - looking. He added the area has more vertical style than ranch - style homes. The Community Development ai builder has S Specialist d the rea t r h said the p lans r t state t o as tY P p ready, W but is unsure if Mr. Wri and the builder are both committed. The Community Development Specialist stated if this type of house is acceptable to the EDA, he suggests the EDA allow advertisement of the sale of the lot and setting up the process. He explained the process would also allow others interested to submit offers with building plans, 4/4/94 - 2- Commissioner Mann said the joint venture sounds interesting and thinks "feelers" should be put out to other communities, to consider the option of developing these types of lots on a multi -city basis. The Community Development Specialist said Staff is looking into that and watching other cities to see how things go. He said if it is possible to work Together, we can expand. He continued the non- profit approach would take some level of staff. He said current staff in this area will only be employed until fall, Commissioner Mann asked how the Housing Commission feels about scattered site recommendations, The Community Development Specialist said he has not had an opportunity to discuss it with the Commission Commissioner Mann asked whether the EDA is limited on development because it was acquired with CD13U money. 'The Community Development Specialist said he does not believe so. He said CDBG funds were used to buy this lot and the EDA would be required to pay the fair market value of the property back to the GDBG program upon sale. He said to his knowledge there is no limitation on who to sell property to . He said if the City sells for less than the fair market value, they still havY to pay that to CDBG. Commissioner Mann asked whether it is marketable between $24,000 and $27,000. The Community Development Specialist confirmed it is, and the resolution would set a minimum offer at $ 24,000, RESOLUTION NO. 94-15 Commissioner Cclia Scott introduced the following resolution and moved its adoption: RESOLUTION AUTHORIZING SALE OF CERTAIN PROPERTY LOCATED AT 6601 BRYANT AVENUE NORTH, BROOKLYN CENTER, MINNESOTA, FURSUAlNT TO MINNESOTA STATUTES SECTION 469.012, SUBD. 7, AND SECTION 469.029. The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Kristen Mann, and the motion passcd unanimously. The City Manager presented a Resolution Approving Two (2) Brooklyn Center Economic Development Authority Grants (Fil(,- Nos. H -1113 and H -119 (8044 and 8045)). There was a discussion among members of the EDA concerning outside versus inside repair work on homes as well as residents, though deserving, being required to contribute financially toward the repairs as the involvement would make them more appreciative. Concern was expressed that Brooklyn Center may be getting a reputation for not requiring people to have a stake in their repairs; and funding could be used to help more people if 4124/94 - 3 - a percentage was required. The ideas of community service and sweat equity were suggested, as well as adding a requirement of length of city residence. The E DA decided to table the issue until further research is completed, and requested a report from the Housing Commission by August 1. The EDA specifically asked that the report include how much money remains in the CDBG program and whether it can be transferred to the next year, There was a motion by Commissioner Scott and seconded by Commissioner Kalligher to table the resolution. The motion passed unanimously, ADJOURNMENT There was a motion by Commissioner Barb Kalligher and seconded by Commissioner Celia Scott to adjourn the meeting. The motion passed unanimously. The Brooklyn Center Economic Development Authority adjourned at 9:45 p.m. Todd Paulson, President Recorded and transcribed by: Barbara Collman TimeSaver Off Site Secretarial 4/24/94 - 4- CITY OF BROOKLYN CENTER cauA Meeting Date 5/9/94 Agenda Item Number Sam REQUEST FOR COUNCIL CONSIDERATION ******************************************************** * * * * * * * * * * * * * * * * * * * * * * * * * * * * * ** ITEM DESCRIPTION: RESOLUTION AUTHORIZING EXECUTION OF PURCHASE AGREEMENT FOR SALE OF 5206 DREW AVENUE NORTH TO TWIN CITIES HABITAT FOR HUMANITY DEPT. APPROVAL: Tom Bublitz, Community Development Specialist MANAGER'S REVIEW/RECOMMENDATION: No comments to supplement this report Comments below /attached SU M[ARY EXPLANATION: (supplemental sheets attached At the April 11, 1994 EDA meeting, the EDA board authorized a public hearing on the sale of the EDA owned single - family lot at 5206 Drew Avenue North to Twin Cities Habitat for Humanity. State law requires a public hearing on the terms and conditions of the sale of all EDA owned property. A copy of the public hearing notice is included with this request form. Twin Cities Habitat for Humanity is proposing to construct a single - family home on the property, similar to the home constructed by Habitat for Humanity on the 6730 Perry Avenue location. If the sale of the lot is approved, Habitat would complete construction on the home by this fall. Representatives from Habitat for Humanity are doing a walk-through of the Drew Avenue neighborhood to explain what they are proposing for the 5206 Drew Avenue lot. I spoke with a Habitat representative participating in the walk- through on Wednesday, May 4, and he said the reaction from the neighborhood was positive, even more so than the response from the 6730 Perry neighborhood the year before. Habitat plans to complete the walk - through by May 6, 1994. Representatives from Habitat for Humanity will be present at the public hearing to review the plans for the house proposed for the lot and to answer any questions the Council or public may have regarding this project. RECONMIENDATION: Staff recommends approval of Resolution Authorizing Execution of Purchase Agreement for Sale of 5206 Drew Avenue North to Twin Cities Habitat for Humanity. PURCHASE AGREEMENT 5206 Drew Avenue North, Brooklyn Center, Minnesota THIS AGREEMENT, made and entered into this day of May, 1994, by and between the ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF BROOKLYN CENTER, a Minnesota municipal corporation with offices at 6301 Shingle Creek Parkway, Brooklyn Center, Minnesota 55430 (the "Seller ") and TWIN CITIES HABITAT FOR HUMANITY (the "Buyer "). WITNESSETH: 1. Description of Land Sold Seller, in consideration of the covenants and agreements of Buyer hereinafter contained, hereby sells and agrees to convey unto Buyer, or its successors and assigns, by quit claim deed, upon the prompt and full performance by Buyer of its part of this Agreement, the tract of land lying and being in the County of Hennepin, legally described in Exhibit A attached hereto (hereinafter "land sold herein" or the "Property "). 2. Purchase Price Buyer, in consideration of the covenants and agreements of Seller contained herein, hereby agrees to purchase the Property and agrees to pay to Seller as and for the purchase price the sum of One Dollar ($1.00) (the "Purchase Price "). The Purchase Price shall be payable by Buyer to Seller at closing. 3. Taxes and Special Assessments Property is exempt from real estate taxes payable in the year 1994. There are no special assessments currently levied against the Property. Buyer shall pay (and hereby assumes) all real estate taxes and installments of special assessments relating to the land sold herein which become due and payable after the date of closing. Seller warrants that the real estate taxes and installments of special assessments which were due and payable in the years preceding the year in which this contract is dated are paid in full. Sewer availability charges (SAC) attributable to the Property shall be paid by Seller. 4. Right of Entry Buyer shall have the right, prior to the Closing Date, to enter upon the land sold herein for the purpose of taking soil tests, borings, making surveys and maps and performing preliminary investigative work in connection with the Buyer's purchase of land sold herein, provided, however, that Buyer shall indemnify and hold harmless Seller from any mechanic liens or any claim arising out of such preliminary development work by Buyer. -1- 5. Closinq Date The Closing Date shall be held on or before July 0 1, 1994. The closing shall take place at the offices of Holmes and Graven, Chartered, 470 Pillsbury Center, Minneapolis, Minnesota 55402. At the closing, Seller and Buyer shall deliver to one another the instruments and funds specified herein. Possession of the land sold herein shall, subject to the terms of Paragraph 4 hereof, be delivered to Buyer on the Closing Date. 6. Title Unless waived by Buyer, performance by Buyer hereunder shall be expressly contingent upon the Buyer being able to obtain, at his own expense, an Owners Title Policy in the amount of the Purchase Price, or other evidence of title satisfactory to Buyer, showing good and marketable title in Seller. Buyer shall be allowed ten (10) days from the date of this Agreement to investigate the state of title to the Property and to make any objections thereto, said objections to be made in writing or deemed to be waived. Pending cure of the objections, the payments hereunder required shall be postponed, but upon cure of the objection and within five (5) days after written notice, Buyer shall perform as provided in this Agreement. If the objections to title are not cured within one hundred and twenty (120) days from the date of written objection thereto as above provided, this Agreement shall, at the option of Buyer, be void and neither party shall be liable for damages hereunder to the other party; but if the objections shall be cured within said time, and Buyer shall default in any of the agreements and continue to default for a period of five (5) days after written demand by Seller upon Buyer setting forth the specific default of Buyer hereunder, then, and in that case, Seller may terminate this Agreement. 7. Warranties of Seller Seller represents and warrants, which representations of warranty shall be true as of the Closing Date and shall survive the Closing (and shall be a condition precedent of the obligations of Buyer hereunder) as follows: (a) There is no environmental litigation pending or threatened against the Property. (b) The Property is served by a sanitary sewer system and municipal water system. Buyer acknowledges that except as foresaid, the Property is being sold as is without any representations or warranties. 8. Notices All notices provided herein shall be given in person or sent by United States Mail, postage paid, to the parties at the following addresses (or such other addresses as either party may, from time to time, designate in writing to the other): -2- If to Buyer, to: Mr. Stephen Seidel Executive Director Twin Cities Habitat for Humanity P.O. Box 7053 Minneapolis, MN 55407 -0053 If to Seller, to: Economic Development Authority In and For the City of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center, MN 55430 With copy to: Corrine Heine Holmes & Graven, Chartered 470 Pillsbury Center Minneapolis, MN 55402 Deposit in United States Mail of said notice on the date such notice is to be given, or earlier, shall be deemed timely and acceptable. 9. Successors and Assigns: No Merger The terms, covenants and conditions of this Purchase Agreement shall be binding upon and inure to the benefit of the successors and assigns of the respective parties hereto, and shall survive closing and shall not merge with any deed or other instrument of conveyance. Time is of the essence of all matters to be performed in this Agreement. 10. Documents to be Delivered at Closing The following documents shall be delivered at closing: By Seller: (1) A Quit Claim Deed. (2) A Seller's Affidavit, in standard form. (3) Owner's Duplicate Certificate of Title, if applicable. (4) Well Disclosure Certificate. By Buyer: (1) The Purchase Price. (2) A Certificate of Real Estate Value. (3) Affidavit of Purchaser of Registered Land, if applicable. 11. Remedies Upon Default In the event of default by Seller of any terms contained in this Agreement, Buyer shall have the right, at its option, to terminate this Agreement or to sue to enforce this Agreement by specific performance. In the event of default by Buyer, Seller shall have the right to terminate this Agreement as provided herein or by law, to enforce this Agreement by specific performance or to sue for damages. 12. Design Approval Buyer shall not construct on the Property improvements which are not consistent with the design proposals -3- for a detached single family residence approved by Seller. Prior to construction of any improvements on the Property, Buyer shall submit to Seller a design proposal for such improvements for approval by the Seller. Seller shall approve construction of such improvements only upon a determination, in the absolute and sole discretion of Seller, that the public interests would be served by construction of such improvements. No improvements shall be constructed on the Property which are not consistent with such approved design proposal. 13. Well Disclosure Statement Exhibit B attached hereto is a completed form of a Minnesota Well Disclosure Statement and is incorporated herein as if fully set forth herein. 14. Sale of Sinqle Family Residence Purchaser shall sell the detached single family residence constructed on the Property only to a person or persons of low and moderate income within one year from the date of closing. Low and moderate income person or persons shall be defined by an income not greater than eighty percent (80 %) of the Minneapolis /St. Paul metropolitan MSA median household income as most recently approved by the Department of Housing and Urban Development for purposes of establishing Community Development Block Grant (CDBG) program income limits. Purchaser shall provide documentation acceptable to Seller of compliance with the income requirements specified in this paragraph. If the Purchaser does not comply with the requirements of this paragraph, then the Seller shall have the right to re -enter and take possession of the Property and to terminate and revest in the Seller title to the Property. The quit claim deed required to be provided under paragraph 10 shall include a reverter clause to effectuate the intent of this paragraph. IN WITNESS WHEREOF, Buyer and Seller have executed this Purchase Agreement on the date and year first above written. TWIN CITIES HABITAT FOR HUMANITY By Its By Its -4- ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF BROOKLYN CENTER, A Minnesota Municipal Corporation By Its President By Its Executive Director STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN) The foregoing instrument was acknowledged before me this day of , 1994, by and the and respectively, of Twin Cities Habitat for Humanity, a nonprofit organization. Notary Public STATE OF MINNESOTA) ) ss. COUNTY OF HENNEPIN) The foregoing instrument was acknowledged before me this _ day of , 1994, by and , the President and Executive Director, respectively, of the Economic Development Authority in and for the City of Brooklyn Center, a Minnesota municipal corporation. Notary Public BR291 -009 -5- EDIT A LEGAL DESCRIPTION The South 32 feet of Lot 10, and the Northerly 1/2 of Lot 11; Block 1, Linden Shores on Twin Lake PIN 10- 118 -12 -0010 (5206 Drew Avenue North) AM Forrn No. 1519-W MinrAmouw.uoiwio".sutw4ntm*.im 1AMV- 098 L"alFo * MINNESOTA WELL DISCLOSURE STATEMENT Minnesota Law requires that before signing an agreement to sell or transfer real property after June 30, 1990, the seller must disclose information in writing to the buyer about the status and location of all known wells on the property. This requirement is satisfied by delivering to the buyer either a statement by the seller that the seller does not know of any wells on the property, or a disclosure statement indicating the legal description and county and a map showing the location of each well. In the disclosure statement the seller must indicate, for each well, whether the well is In use; not in use or sealed. A seller who, fails to disclose the existence of a well at the time of sale and knew of, or had reason to know of, the existence of a well is liable to the buyer for costs relating to the sealing of the well and reasonable attorney fees for collection of costs from the seller, if the action is commenced within six years after the date the buyer closed the purchase of the real property where the well is located. Instructions for completion of this form are on the reverse side. 1. PROPERTY DESCRIPTION Street address: 5206 Drew Avenue North Brooklyn Center Hennepi City Coonty 2. LEGAL DESCRIPTION The South 32 feet of Lot 10, and the Northerly 1/2 of Lot 11; 'lock 1, Linden Shores on Twin Lake 3. WELL DISCLOSURE STATEMENT (Check the appropriate box.) ® The seller certifies that the seller does not know of any wells on the above described real 0 property. If this option is checked, then skip to the last line and sign and date this statement. ❑ The seller certifies that the following wells are located on the above described real property. MN. Unique Well Year of Well IN USE NOT IN SEALED Well No. Depth Const. Type USE Well 1 ❑ ❑ ❑ Well 2 ❑ ❑ ❑ Well3 ❑ ❑ ❑ 4. SEALED WELL INFORMATION For each well designated as sealed above, complete this section. When was the well sealed? Who sealed the well? Was a Sealed Well Report filed with the Minnesota Department of Health? Yes No b. MAP Complete the attached map showing the location of each well on the real property. 6. CERTIFICATION BY SELLER I certify that the information provided above is accurate and complete to the best of my knowledge. s.6r r Dale" W R.pn t d'. D.4 stir r Ndgn.W R.p tsd— No EXHIBIT B NOTICE OF PUBLIC HEARING REGARDING THE SALE OF LAND BY THE ECONONIIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF BROOKLYN CENTER Notice is hereby given that the Economic Development Authority in and for the City of Brooklyn Center will hold a public hearing on May 9, 1994, at 7:00 p.m. at the Brooklyn Center City Hall located at 6301 Shingle Creek Parkway, Brooklyn Center, Minnesota, pursuant to Minnesota Statutes Section 469.029, Subd. 2, regarding the proposed sale of the following described property to Twin Cities Habitat for Humanity: The South 32 feet of Lot 10, and the Northerly 1/2 of Lot 11; Block 1, Linden Shores on Twin Lake (PIN 10- 118 -12 -0010) (5206 Drew Avenue North). All persons desiring to be heard shall appear at the time and place referenced above. Dated: , 1994 Todd Paulson, President Commissioner introduced the following resolution and moved its adoption: EDA RESOLUTION NO. RESOLUTION AUTHORIZING EXECUTION OF PURCHASE AGREEMENT FOR SALE OF 5206 DREW AVENUE NORTH TO TWIN CITIES HABITAT FOR HUMANITY WHEREAS, Minnesota Statutes Section 469.029, Subd. 2, requires a public hearing for the sale of land by the Economic Development Authority in and for the City of Brooklyn Center (EDA); and WHEREAS, EDA resolution 94 -12 provided for a public hearing regarding the sale of land owned by the EDA to Twin Cities Habitat for Humanity and legally described as: The South 32 feet of Lot 10, and the Northerly 1/2 of Lot 11; Block 1, Linden Shores on Twin Lake (5206 Drew Avenue North) (the "property "); and WHEREAS, EDA Resolution 94 -12 authorized the EDA Executive Director to negotiate a purchase agreement for the sale of the property to Twin Cities Habitat for Humanity for $1.00; and WHEREAS, the Brooklyn Center EDA has held a public hearing regarding the sale of the property pursuant to Minnesota Statutes Section 469.029, Subd. 2; and WHEREAS, the EDA Executive Director has prepared a purchase agreement for the sale of the property to Twin Cities Habitat for Humanity. NOW THEREFORE BE IT RESOLVED b the Economic � Y Development Authority in and for the City of Brooklyn Center that the terms and conditions of the purchase agreement for the sale of the property to Twin Cities Habitat for Humanity are hereby approved. Date Todd Paulson, President 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. CITY OF BROOKLYN CENTER c-9 M Dare 5/9/94 A ftm Number 6a� REQUEST FOR COUNCIL CONSIDERATION ITEM DESCRIPTION: RESOLUTION AUTHORIZING EXECUTION OF PURCHASE AGREEMENT FOR THE ACQUISITION OF 6933 BROOKLYN BOULEVARD AND AUTHORIZING PAYMENT FOR ACQUISITION COSTS DEPT. APPROVAL: Tom blitz, Community Development Specialist MANAGER'S REVIEWlRECOAMENDATION: No comments to supplement this report Comments below /attached SUAWAR EXPLANATION: (supplemental sheets attached _A ) At the March 28, 1994 EDA Board meeting, the EDA approved a resolution authorizing the acquisition of 6933 Brooklyn Boulevard for $12,000. The resolution before the EDA Board this evening would approve the terms of the purchase agreement for acquisition of the 6933 Brooklyn Boulevard property. A copy of the purchase agreement is included with this request form. The purchase agreement essentially provides for acquisition of the property at the lot value less the estimated cost of demolition, or $17,500 (lot value) less $5,500 (demolition estimate) for a total offer of $12,000. There is a small amount of asbestos- containing material in the house consisting of floor tile and tape wrap around some of the pipes and duct work in the house. Total cost to remove this asbestos- containing material before demolition should be under $2,000. I have sent a draft copy of the purchase agreement to the owners for their review and they have indicated it is acceptable to them. If the EDA Board approves the terms of the purchase agreement, staff would set up a closing on the property as soon as possible. is RECOMN ENDATION: Staff recommends approval of Resolution Authorizing Execution of Purchase Agreement for the Acquisition of 6933 Brooklyn Boulevard and Authorizing Payment for Acquisition Costs. PURCHASE AGREEMENT 6933 Brooklyn Boulevard, Brooklyn Center, Minnesota This Purchase Agreement made this day of May, 1994, by and between Brian V. Follese and Dorothy D. Follese, Owner(s) and Seller(s) (collectively the "Seller "), and the Economic Development Authority in and for the City of Brooklyn Center, with offices at 6301 Shingle Creek Parkway, Brooklyn Center, Minnesota, Buyer. WITNESSETH: WHEREAS, Seller is the owner of that certain real estate described in paragraph 1 below (the "Subject Property "); and WHEREAS, Buyer desires to acquire the Subject Property to own in fee simple for redevelopment purposes; and WHEREAS, Seller agrees to sell the Subject Property to Buyer; NOW, THEREFORE, the parties hereto hereby agree as follows: 1. Earnest Mone That in consideration t mutual agreements iderati f he mu 1 r m v g ents herein contained and the sum of One Dollar and No Cents ($1.00) ( "Earnest Money ") paid by the Buyer to the Seller, the receipt of which is hereby acknowledged, the Seller hereby 0 grants unto the buyer the exclusive right to purchase the following tract or parcel of land (Subject Property) situated in the County of Hennepin, State of Minnesota, to -wit: Lot 2, Block 1 Sunset Manor EX Hwy 2. Purchase Price The purchase price for the Subject Property shall be Twelve Thousand and Noj100 Dollars ($12,000.00), which is the estimated fair market value of the property and shall be payable by check on the Closing'Date. The Earnest Money shall be applied as a partial pre - payment thereof. The Buyer, in its discretion and in partial payment of the purchase price, may assume or take title subject to any existing indebtedness encumbering the Subject Property, in which case the cash to be paid at the time of closing shall be reduced by the then remaining indebtedness. 3. Marketability of Title The Seller shall, within ten (10) days of the date of this Purchase Agreement, deliver to the Buyer all unrecorded instruments relating to interests in the Subject Property, and abstract of title or a registered property abstract continued to the date of delivery and including proper searches for judgments, bankruptcies, state and federal tax liens, real estate taxes and special assessments, showing marketable title to the Subject Property in the Seller. After delivery of said abstract or registered 1 property abstract, the Buyer shall have twenty (20) days for the examination thereof, and to deliver written objections, if any, to the Seller. Seller shall permit no additional encumbrances to be made upon the Subject Property between the date of this Purchase Agreement and the Closing Date. In the event that title to the Subject Property is found by the Buyer to be unmarketable, and cannot be made marketable by the Seller by the Closing Date, then, at the option of the Buyer, this Agreement shall be null and void, and the Earnest Money shall be refunded forthwith to the Buyer. 4. Closing Date The closing of the sale of Subject Property shall take place sixty (60) days after the date of this Purchase Agreement, or at such earlier or later date as may be mutually agreed upon by the Seller and Buyer. 5. Deed Delivered at Closing Seller agrees to give good and marketable title to Subject Property in fee - simple, together with all improvements, hereditaments and appurtenances thereunto belonging and all of the right, title and interest of the Seller in and to any streets or alleys adjoining or abutting thereon, and to convey the same by warranty deed joined in by all individuals known collectively as Seller herein (and by spouse, if any), and in form acceptable to counsel for Buyer. 6. Seller's Representations and Adjustments The Seller agrees to free the Subject Property from all taxes, assessments, leases, liens, and encumbrances and charges of any kind to the date of closing, except that it is agreed that all real estate taxes due and payable in the year of the Closing Date and all rents, utilities, insurance premiums on transferable policies and other income and expenses relating to the Subject Property, shall be pro -rated to Seller and Buyer as of the Closing Date. Seller warrants that there has been no labor or material furnished to the property for which payment has not been made. This warranty shall survive the delivery of the deed at closing. 7. Costs to Clear Title and Closing Costs If the Seller fails to clear title to the extent herein required, or to submit evidence of his ability to do so, and such failure continues for ninety (90) days after the notice of defects, the Buyer may clear title to the extent required and charge the cost of clearing to the Seller. All expenses of examination of title, recording the Seller's warranty deed, transfer taxes, documentary stamps, evidence of title, boundary survey and legal description of the Subject Property, and similar expense incidental to conveying the Subject Property to the Buyer shall be paid by the Buyer. 2 8. Exceptions to Marketable Title Seller shall convey marketable title to the Subject Property to the Buyer subject only to the following exceptions: a. Building and zoning laws, ordinances, State and Federal regulations. b. Reservation of any minerals or mineral rights to the State of Minnesota. c. Utility and drainage easements. 9. No Broker Involved The Seller and Buyer represent and warrant to each other that there is no broker involved in this transaction with whom it has negotiated or to whom it has agreed to pay a broker commission or finders' fees in connection with negotiations for the sale of the Subject Property arising out of any alleged agreement, commitment or negotiation by Seller. 10. Possession and Insurance Seller shall continue in possession of the Subject Property until the date of closing, and shall maintain it in its present condition, subject to the terms of the amendment to this purchase agreement. On the date hereof possession shall be transferred to the Buyer. Risk or loss from casualty or any liability incurred by or as a result of the use or contact with the Subject Property shall be the Seller's until delivery of possession to the Buyer as herein provided. 11. Personal Property On Closing Date, the Seller shall have removed from the Subject Property any and all personal property belonging to him. The Seller shall hold the Buyer harmless for the disposal of personal property left in or at the Subject Property by the Seller after the date of closing. 12. Entire Agreement: Amendments This Purchase Agreement constitutes the entire agreement between the parties and no other agreement prior to this Purchase Agreement or contemporaneous herewith shall be effective except as expressly set forth or incorporated herein. Any purported amendment hereto shall not be effective unless it shall be set forth in writing and executed by both parties hereto or their respective successors or assigns. 13. Binding Effect: Assignment This Purchase Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and assigns. Buyer shall not assign his rights and interest hereunder without notice to Seller except to the State of Minnesota, and Seller shall give notice to Buyer of assignment of its interests in the manner prescribed in paragraph 14 hereof. 3 14. Notice Any notice, demand, request or other communication which may or shall be given or served to or on Seller by Buyer or to or on Buyer by Seller shall be deemed to have been given or served on the date the same is deposited in the United States mail, registered or certified, postage prepaid and addressed as follows: a. If to Seller: Brian V. Follese 5812 West Broadway Minneapolis, MN 55429 b. If to Buyer: Economic Development Authority in and for the City of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center, MN 55430 With Copy To: Corrine Heine Holmes and Graven, Chartered 470 Pillsbury Center Minneapolis, MN 55420 15. Default by Buyer If title is marketable or is made marketable as provided herein and Buyer defaults in any of the agreements herein, Seller may cancel this agreement as provided by statute. 16. Default by Seller If title is marketable or is made marketable and Seller defaults in any of the agreements herein, Buyer may seek damages from Seller, including costs and reasonable attorney's fees or seek specific performance within six (6) months after such right of action arises. 17. Well Disclosure Statement Exhibit A attached hereto is a completed form of a Minnesota Well Disclosure Statement and is incorporated as if fully set forth herein. 4 IN WITNESS WHEREOF, the parties hereto have hereunto set their hands, the day and year first printed above. Seller Seller STATE OF MINNESOTA) ) SS. COUNTY OF HENNEPIN) On this the day of , 1994, before me, a Notary Public, personally appeared and , known to me to be the persons whose names are subscribed to the within instrument and who executed the same for the purpose therein contained as their free and voluntary acts. Notary Public Buyer, Todd Paulson Its President Buyer, Gerald G. Splinter Its Executive Director STATE OF MINNESOTA) ) SS. COUNTY OF HENNEPIN) On this the day of , 1994, before me, a Notary Public, personally appeared and , known to me to be the persons whose names are subscribed to the within instrument and who executed the same for the purpose therein contained as their free and voluntary act. Notary Public 5 AWForm No.1619-W Ylnwwu Well olKlwun stat~t(Nsw 1"M Ylil«-0 Mtr L."t F". MINNESOTA WELL DISCLOSURE STATEMENT Minnesota Law requires that before signing an agreement to sell or transfer real property after June 30, 1990, the seller must disclose information in writing to the buyer about the status and location of all known wells on the property. This requirement is satisfied by delivering to the buyer either a statement by the seller that the seller does not know of any wells on the property, or a disclosure statement indicating the legal description and county and a map showing the location of each well. In the disclosure to s lament the seller must indicate, for each well, whether the well is in use; not in use or sealed. A seller who, fails to disclose the existence of a well at the time of sale and knew of, or had reason to know of, the existence of a well is liable to the buyer for costs relating to the sealing of the well and reasonable attorney fees for collection of costs from the seller, if the action is commenced within six years after the date the buyer closed the purchase of the real property where the well is located. Instructions for completion of this form are on the reverse side. 1. PROPERTY DESCRIPTION Street address: —_6933 Brooklyn Boulevard, Brooklyn Center, Hennepin acr cwn 2. LEGAL DESCRIPTION — Lot 2 R1 —Ir 1 Su—pt Manor FY Hwy 3. WELL DISCLOSURE STATEMENT (Check the appropriate box.) ® The seller certifies that the seller does not know of any wells on the above described real property. If this option is checked, then skip to the last line and sign and date this statement. 0 The seller certifies that the following wells are located on the above described real property. MN. Unique Well Year of Well IN USE NOT IN SEALED Well No. Depth Const. Type USE Well 1 O ❑ Well 2 0 0 0 Well 3 0 0 Cl 4. SEALED WELL INFORMATION For each well designated as sealed above, complete this section. When was the well sealed? Who sealed the well? Was a Sealed Well Report filed with the Minnesota Department of Health? Yes No 5. MAP Complete the attached map showing the location of each well on the real property. 6. CERTIFICATION BY SELLER I certify that the information provided above is accurate and complete to the best of my knowledge. 8�11w a D.ai�wW R.pe..mtatly. DAY s.6w W DM1ryW R'pr tad" Au EXHIBIT A v Commissioner introduced the following resolution and moved its adoption: EDA RESOLUTION NO. RESOLUTION AUTHORIZING EXECUTION OF PURCHASE AGREEMENT FOR THE ACQUISITION OF 6933 BROOKLYN BOULEVARD AND AUTHORIZING PAYMENT FOR ACQUISITION COSTS WHEREAS, on March 28, 1994, the Brooklyn Center Economic Development Authority approved Resolution No. 94 -10, Resolution Authorizing the Acquisition of Certain Real Property Within the City of Brooklyn Center and Establishing Offer of Just Compensation for Said Property Located at 6933 Brooklyn Boulevard in Brooklyn Center; and WHEREAS, Resolution No. 94 -10 established the fair market value of the real property located at 6933 Brooklyn Boulevard and authorized the Economic Development Authority staff to make a written offer of $12,000 to the owner of the real property at 6933 Brooklyn Boulevard for the acquisition of the property; and WHEREAS, the owner of the real property described in Resolution No. 94 -10 has accepted the Economic Development Authority's offer of just compensation and has agreed to execute a purchase agreement for the acquisition of the real property; and NOW, THEREFORE BE IT RESOLVED b the Brooklyn Center Y Y Economic Development Authority that: 1. The terms of the urchase agreement for acquisition P g � of 6933 Brooklyn Boulevard in Brooklyn Center are hereby approved and the President and Executive Director of the Brooklyn Center Economic Development Authority are hereby authorized to execute the purchase agreement on behalf of the Brooklyn Center Economic Development. Authority. 2. The Brooklyn Center Economic Development Authority hereby authorizes payment of $12,000 for the acquisition of 6933 Brooklyn Boulevard in Brooklyn Center to be paid to the owner on the day of closing for the property at 6933 Brooklyn Boulevard as per the terms of the purchase agreement. 3. All costs associated with the acquisition of 6933 Brooklyn Boulevard shall be accounted for in the EDA Spot Renewal Program. Date Todd Paulson, 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. CITY OF BROOKLYN CENTER Cmkcil Meets Date 5/9/94 Agenda mean xvad REQUEST FOR COUNCIL CONSIDERATION ITEM DESCRIP'T'ION: RESOLUTION AUTHORIZING THE ACQUISITION OF CERTAIN REAL PROPERTY WITHIN THE CITY OF BROOKLYN CENTER AND ESTABLISHING OFFER OF JUST COMPENSATION FOR SAID PROPERTY LOCATED AT 5900 EMERSON AVENUE NORTH IN BROOKLYN CENTER DEPT. APPROVAL: Tom Bublitz, Community Development Specialist MANAGER'S REVIEW/RECONaVIENDATION. No comments to supplement this report . Comments below /attached SUNDLARY EXPLANATION: (supplemental sheets attached X ) At the February 28, 1994 EDA meeting, the EDA authorized staff to prepare information with regard to the possible acquisition of 5900 Emerson Avenue North as part of the EDA's scattered site voluntary acquisition program. The Brooklyn Center City Senior Appraiser has prepared the appraisal for the property and the City Assessor has provided a review appraisal. Both individuals are certified appraisers. Copies of the appraisal and review appraisal are included with this request form. Based on previous single - family demolition costs, staff has estimated the demolition cost for the house and garage on this property to be approximately $5,900. Also, there is a small amount of asbestos- containing material in the house which must be removed before demolition can take place. The asbestos in the house is located in the floor tiles in the kitchen and bathroom and in tape wrapped around pipes and duct work in the basement. The estimated cost for removal of the asbestos - containing material is approximately $2,000. Staff is recommending an offer be made to the owners of the property at 5900 Emerson based on the $40,000 appraised value less the estimated demolition and asbestos abatement cost of $7,900, • for a net offer of $32,100. I have verbally relayed this dollar amount to the owners' realtor and explained I would be recommending this amount to the EDA at their May 9, 1994 meeting. At the time of the writing of this request form, I have not had a response from the owners' agent, but I hope to have a response by Monday's meeting. RECOMMENDATION Staff recommends approval of Resolution Authorizing the Acquisition of Certain Real Property Within the City of Brooklyn Center and Establishing Offer of Just Compensation for Said Property Located at 5900 Emerson Avenue North in Brooklyn Center. �6 Commissioner introduced the following resolution and moved its adoption: EDA RESOLUTION NO. RESOLUTION AUTHORIZING THE ACQUISITION OF CERTAIN REAL PROPERTY WITHIN THE CITY OF BROOKLYN CENTER AND ESTABLISHING OFFER OF JUST COMPENSATION FOR SAID PROPERTY LOCATED AT 5900 EMERSON AVENUE NORTH IN BROOKLYN CENTER WHEREAS, the Brooklyn Center Economic Development Authority has received the following items relative to the appraisal of the real property located at 5900 Emerson Avenue North: a. Appraisal report dated April 14, 1994; and b. Review appraisal dated April 21, 1994. WHEREAS, the Economic Development Authority in and for the City of Brooklyn Center (EDA) is authorized, pursuant to Minnesota Statutes Section 469.012, Subd. 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 owners of the property located at 5900 Emerson Avenue North in the City of Brooklyn Center, legally described as Lot 9, Block 1, "Andrew Rock's Addition" (the property), have listed the property for sale with a licensed real estate agent; 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; and WHEREAS, the EDA has received an appraisal and a review appraisal which establishes that the market value for the property is $40,000; and WHEREAS, EDA staff has estimated the cost of demolition of the single - family house and detached garage on the property to be approximately $5,900; and WHEREAS, EDA staff has estimated the cost of asbestos abatement work on the single - family house on the property to be approximately $2,000. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of Brooklyn Center as follows: EDA Resolution No. 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 appraisal documents described in paragraph 1 of this resolution are hereby accepted and the fair market value of $40,000, established by the appraisal documents, is hereby accepted for the property located at 5900 Emerson Avenue North. 3. The Executive Director is authorized to make a written offer of $32,100 to the owners of the real property at 5900 Emerson Avenue North. Said offer is the result of deducting the estimated cost of asbestos abatement ($2,000) and demolition ($5,900) from the established fair market value of the property ($40,000). 4. 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. 0 Date Todd Paulson, President 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. MEMORANDUM TO: Tom Bublitz, Assistant EDA Coordinator 1 FROM: r Mark P. Parish, City Assessor DATE: Apri121, 1994 RE: Appraisal Review -5900 Emerson Avenue North Per your request, I have reviewed the appraisal report by Joseph DaBruzzi of 5900 Emerson Avenue North in which the market value of the subject as of March 15,1994 was estimated. My review consisted of a verification of the information contained within the report through comparison with MLS and Brooklyn Center records, a cross -check of the mathematics, and a review of the appraisal methodology and conclusions. From my review, I conclude the following: 1) The appraisal report is complete and complies with USPAP standards; 2) The data is adequate and relevant and the adjustments are appropriate; 3) The appraisal methods and techniques are appropriate; 4) The analyses, opinions, and conclusions in the report are appropriate and reasonable. - Therefore, I concur with Mr. DaBruzzi's conclusion that the value of the subject, as of March 15, 1994, was FORTY THOUSAND DOLLARS ($40,000.00) I certify that, to the best of my knowledge and belief: the facts and data reported by the review appraiser and used in the review process are true and correct. the analyses, opinions, and conclusions in this review report are limited only by the assumptions and limiting conditions stated in this review report, and are my personal unbiased professional analyses, opinions, and conclusions. I have no present or prospective interest in the property that is the subject of this report and I have no personal interest or bias with respect to the parties involved. my compensation is not contingent on an action or event resulting from the analyses, opinions, or conclusions in, or the use of, this report. I did not personally inspect the subject property of the report under review. no one provided significant professional assistance to the person signing this review report. ar Parish . Certified Federal General Appraiser License No. 4003158 CITY 6301 SHINGLE CREEK PARKWAY OF BROOKLYN CENTER, MINNESOTA 55430 BROOKLYN TELEPHONE: 569 -3300 CENTER FAX: 569 -3494 EMERGENCY - POLICE - FIRE 911 April 15, 1994 Brad Hoffman EDA Coordinator City of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center, MN 55430 Re: Market Value Appraisal on Huffman Property 5900 Emerson Avenue North Brooklyn Center, Minnesota Dear Mr. Hoffman: Pursuant to your request, I have completed a market value appraisal report on the above - referenced property. The purpose of the appraisal is to arrive at an estimate of market value of the fee simple interest of the property. Market value is defined within the definitions section of this report. The definition of market value and the other contents of the report comply with the Uniform Standards of Professional Practice of the Appraisal Foundation. This report is subject to the assumptions and limiting conditions contained herein. It is my opinion that as of March 15, 1994, the market value of the property is: FORTY THOUSAND DOLLARS ($40,000) This conclusion is based upon my personal inspection and review of the property, comparable sales, and application of the appraisal process. Respectfully Submitted, J seph DaBruzzi Senior Appraiser i l l MARKET VALUE _ APPRAISAL OF THE. i PROPERTY LOCATED AT t 5900 EMERSON AVENUE NORTH BROOKLYN CENTER, MINNESOTA i FOR BRAD HOFFMAN EDA COORDINATOR CITY OF BROOKLYN CENTER 6301 SHINGLE CREEK PARKWAY BROOKLYN CENTER, MINNESOTA 55430 BY j • JOSEPH DABRUZZI TABLE OF CONTENTS INTRODUCTION PAGE Letter of Transmittal ........ .. .. . . I _ Summary of Important Facts and Conclusions .................... II Certification . III References ................... ......................IV -, Definitions ......... . ............................... V Compliance with Federal Appraisal Regulations .................. VII DESCRIPTION, ANALYSIS AND CONCLUSIONS Identification of Subject Purpose of Report . ............................... .....1 Function of Report . ............................... . ......1 Legal Description ......... .............................. Ownership............. .............................. SalesHistory ........... .............................. Real Estate Taxes ......... .............................. Scope of the Appraisal .......... .........................2 u . Marketability .......... ............................... 2 Area Analysis ........... .............................. City and Neighborhood Analysis ............................. 7 Site Analysis ............ .............................. Improvements Analysis ................. 10 Highest and Best Use .... ............................... 1 - Appraisal Methodology ... ............................... 13 Income Approach ....... ............................... 14 Sales Comparison Approach ............................... 15 Cost Approach ........ ............................... 22 Reconciliation ........... ............................. Qualifications of Appraiser . ............................... 25 Contingent and Limiting Conditions ..... ................. 26 ADDENDA Photographs Location Maps Plat Map Building Sketch 4 ': l SUMMARY OF E%IPORTANT FACTS AND CONCLUSIONS ® r Property Appraised: Wood frame single family home, one story, 528 square feet with basement on `a 9,782 square, foot site. Address: 5900 Emerson Avenue North, Brooklyn Center, Minnesota 55430 _} Owner: According to Hennepin County records, the fee owners are Bonnie Lee Huffman, Lome Ann Huffman, and Sandra L. Huffman. Sandra, has a "life estate". Bonnie and Lorrie have the remainder interest, as recorded on-Document #4666878 in Hennepin County Abstract records. Appraisal Date: March 15, 1994 Appraisal Purpose: Estimate fair market value of the fee simple title. Zoning: R -1, Single - Family Residential Highest and Best Use: Current Use Market Approach: $40,000 Income Approach: N/A Cost Approach: $43,300 Estimate of Value: $40,000 I - • II 4 V CERTIFICATION I certify that, to the best of my knowledge and belief: 1. The statements of fact contained in this report are true and correct. 2. The reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, unbiased professional analyses, opinions and conclusions. 3. I have no present or prospective interest in the property that is the subject of this report, and I have no personal interest or bias with respect to the parties involved. I acknowledge that I am employed by the City of Brooklyn Center, the potential purchaser of the subject property. 4. My compensation is not contingent on an action or event resulting from the analyses, opinions, or conclusions in, or the use of, this report. 5. My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. 6. I made a roP e rty ersonal inspection of the that is the subject of this report on March P P property 15, 1994. Sandra Huffman 's daughter accompanied the appraiser on the inspection. g P PP P 7. This appraisal assignment was not based on a requested minimum valuation or specific valuation or approval of a loan. Jose h DaBn=i Senior Appraiser III REFERENCES The methods, facts and conclusions used in the preparation of this appraisal were obtained from jmy experience in real estate and the real estate appraisal field; discussions with lending institutions; insurance companies; real estate brokers; discussions with City and County Assessors and Appraisers and from seminars and courses attended. The following sources were referenced in the preparation of this report. Zoning Ordinance: City of Brooklyn Center Brooklyn Center, Minnesota Taxes and Special Assessments: City of Brooklyn Center Brooklyn Center, Minnesota Market Information: City of Brooklyn Center Multiple Listing Service (Residential) Metro Confidential Data Exchange Appraisal Terms and Methodology: Appraisal of Real Estate 10th Edition 1992 Copyright, American Institute of Real Estate -- Appraisers OCC's Final Rule, 12 CFR Part 34, Subpart C - Appraisals, Section 34.43(f) effective August 24, 1990 f' L_ a IV DEFINITIONS i This appraisal uses definitions from several sources. The sources are specified in the reference section of the appraisal and the will be abbreviated within this section. PP Y Market Value OCC's Final Rule, 12 CFR, Part 34, Subpart C - Appraisals, Section 34.42(f): "Market Value" is the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 1. Buyer and seller are typically motivated; 2. Both parties are well informed or well advised, and acting in what they consider their own best interests; 3. A reasonable time is allowed for exposure in the open market; 4. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto;- and 5. The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated - with the sale. Fair Value "Fair Value" shall mean Market Value, except that it assumes at least a 12 -month marketing period, even if it is believed a reasonable marketing period to be less than 12 months. All cash flows generated by the property should be discounted (including but not limited to those arising from ownership, development, operation, and sale of the property). Liquidation Value "Liquidation Value" shall mean Market Value, but instead of assuming a "reasonable marketing period ", assume that the property is to be marketed and sold on an expedited basis; that is, assume the property is to be marketed and sold within 120 days. If the f property cannot be sold within 120 days, in your opinion, state the earliest possible date of a cash sale and explain your rationale. T Fee Simple Estate Absolute ownership unencumbered by any other interest or estate; subject only to the limitations of eminent domain, escheat, police power, and taxation. Easement A nonpossessing interest held by one person in land of another person whereby the L first person is accorded partial use of such land for specific purpose. An easement restricts but does not abridge the rights of the fee owner to the use and enjoyment of the easement holder's rights. Easements fall into three broad classifications: surface easements, subsurface easements, overhead easements. V Temporary Easement An easement granted for a specific purpose and a specific time period, 1 e.g., a construction easement is terminated after the construction of the improvement and the 1 uninc_m fee interest in the land reverts to the owner. l Permanent or Perpetual Easement An easement in perpetuity; one that lasts forever. Just Compensation Just compensation includes all elements of value that are inherent in the property, but does not exceed market value fairly determined. The sum required to be paid to the owner does not depend upon the uses to which he has devoted his land, but is to be arrived at upon just compensation of all the uses for which it is suitable. The highest and profitable use for which the property is adaptable and needed or likely to be used in the reasonably near future is to be considered, but not necessarily as the measure of value, but to the full extent that the prospect of demand for such use affects the market value while the property is privately held. Hip-hest and Best Use The reasonable and probable use that supports the highest present value of vacant land or improved property, as defined, as of the date of the appraisal. The reasonably probable and legal use of land or sites as though vacant, found to be physically possible, appropriately supported, financially feasibly, and that results in the highest present land value. Alternatively, the most probable use. Implied these definitions is that the determination of highest and best use takes into account ni development goals as well uni and community p g ' c use to the comet ty contribution of a specific community the . sp . in certain situations, the highest as the benefit of that use to individual property owners. Hence, � and best use of land will be for parks,green belts, preservation, conservation, wild life habitats, and the like. VI COMPLIANCE WITH FEDERAL APPRAISAL STANDARDS This appraisal is in compliance with the requirements of the Uniform Standards of Professional Appraisal Practice and the Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 as the appraisers understand them. The following are the "fourteen points" and a reference within the appraisal of the page and method of compliance. Excerpted from: Vol. 55 No. 165, Federal Register, Friday, August 24, 1990, Section 34.44 Appraisal Standards. Minimum Standards include: (A) All Appraisals must: 1. Conform to USPAP, except that the Departure Provision, which allows below minimum work, will not apply; This appraisal does not exercise the departure provision: All USPAP requirements are met. 2. Include a disclosure of any steps taken in order to comply with the Competency Provision of USPAP; The appraiser is a Certified Minnesota Assessor #1160 and a Certified General Real Property Appraiser #4003156 and is experienced in the appraisal of residential property. See qualifications. 3. Be based on the market value or other values as defined in the attached DEFINITIONS; The source of the definition of market value is from OCC regulations and appears on page V. 4. (i) be written and presented in a narrative format; (ii) be sufficiently descriptive to enable the reader to ascertain the market value and the rationale -for the estimate; (iii) provide detail and depth" reflective of the complexity of the property appraised. This is a narrative report that covers the entire appraisal process in both description and analysis. VII 5. Analyze and report in reasonable detail any prior sales of the property within the . last three years; See Sales History section on page 1. 6. Analyze and report current revenues, expenses and vacancies on income producing properties rather than upon estimated or, projected figures not supported by current market conditions; Not applicable. See Income Approach section. 7. Use a reasonable marketing period for the property; See the Marketability section on page 2. 8. Analyze current market conditions and trends that will effect the income, absorption, or value of the property; See the Neighborhood section and the Highest and Best Use section. 9. Report both the "as is" (using appropriate deductions and discounts for holding and marketin g P costs, and entrepreneurial profit) and the stabilized market values for development property; report both the value in use and liquidation value for owner - occupied property; Not applicable as the subject property is not an income property. The client did not request the value in use or value in exchange. 10. Include in the USPAP- required certification an additional statement that: "the appraisal assignment was not based on a requested minimum valuation, a specific valuation, or the approval of a loan "; See the Certification on page III. 11. Contain sufficient supporting documentation to allow the reader to ascertain the appraiser's logic, reasoning, judgment and analysis; This is a narrative report that covers the entire appraisal process in both description and analysis. 12. Include a legal description of the subject property (in addition to the description required by USPAP); See Legal Description on page 1. VIII 1 1 13. Identify and value separately any non -real estate items; 1 • See Reconciliation and Value Conclusion. 14 Use and reconcile the income, direct sales and cost approaches to value and explain the omission of any approach not used. See Reconciliation and Value Conclusion. (B) If any information necessary- to complete the appraisal is unavailable, this fact must be disclosed. T IX ��I 1 ROM %''void %M 1 r r •����� f..�a r �. \��(iJre• ` oECFIG= e ` +41W 1^ ;r "S r ... •+v. ....� '•:"'yam" =:, .tom: .c- ;. �•bp'` .K'. - .�4�r....ki?i. ' ° �.., ,, �+ i{ � " � •fi •t �1 1 � 1 S I_1 r PURPOSE OF THE APPRAISAL • The purpose of this appraisal is to estimate the fair market value of the fee simple interest of the subject property as of March 15, 1994. FUNCTION OF THE REPORT The function of this report is to serve as a basis for estimating the value of the property in conjunction with the possible acquisition of the property by the City of Brooklyn Center. LEGAL DESCRIPTION Lot 9, Block 1, "Andrew Rock's Addition" PID # 01- 118 -21 -22 -0009 OWNERSHIP According to the Hennepin County records, the fee owners are Bonnie Lee Huffman, Lorrie Ann Huffinan and Sandra L. Huffman. SALES HISTORY According to the City of Brooklyn Center's records, the property has not sold in the past three — years. REAL ESTATE TAXES Homestead real estate taxes payable in 1994 are a base tax of $611.32, with no existing special assessments. The market value of the property is $17,500 land, $30,000 building, $47,500 total. 1 SCOPE OF THE APPRAISAL The appraiser has been requested to estimate the market value of the subject property. The subject property represents a single family home in the City of Brooklyn Center, Minnesota. The following activities were done in conjunction with the appraisal: Physical inspection of the subject property and subject neighborhood on March 15, 1994 by Joseph DaBruzzi. The owner's daughter accompanied the appraiser on the inspection. - Highest and best use analysis. - Survey and analysis of comparable sales and offerings for sale. - Application of the appraisal process. - Receipt and analysis of information from the client. MARKETABILITY According to the Uniform Standards of Professional Appraisal Practice, appraisals should state as closely as possible the factors which affect the marketability of the subject property, with respect to the following factors; 1. Typical Financing Terms: 90% LTV, rate: 8.5% fixed, 0 -1 points, 30 year amortization; various provisions for a call; the repairs necessary to the subject may inhibit or prevent bank financing and require seller financing at terms of 1- 2 % above bank rates with a 5 to 7 year balloon. 2. Estimated Marketing Time: One year or less. 3. Sales Commissions: Estimated at 7% of gross sales price. 4. Types of Buyers: First time home buyer. 5. Market Area: The Twin Cities metropolitan area. Note The estimated market value has not been discounted to reflect marketing time, or sales commissions. 2 AREA ANALYSIS The subject property is located in the Twin Cities Metropolitan area. The four major influences that affect property value of physical, social and economic and governmental are considered in the influence of real estate values in the region. Demographic /Social factors for the area include: 1. The Twin Cities area is the sixteenth largest metropolitan statistical area (MSA) in the United States. -= 2. The 1990 Census count for the seven - county metropolitan population was 2,278,721; 2,464,124 people live in the eleven - county federal MSA. 3. The population grew at a 15.3 percent rate between 1980 and 1990 making the Twin Cities the twelfth fastest growing area in the U.S. 4. Fifty -two percent of the state of Minnesota's population live in the seven - county metro area. 5. Of people twenty -five years old or older in the Minneapolis -St. Paul area, eighty percent are high school graduates and twenty -two have sixteen years of education or more. The high school graduation rate in Minnesota is the highest in the nation. :.:.:: Il TEAPC3Il SIST >PA.M MSA PoI'UUAT K.: 1980 1990 County 1990 1980 Change 1980- 1990 Population % Population % Population % Anoka 243,641 10.65% 195,998 9.87% 47,643 24.30% Carver 47,915 2.09% 37,046 1.87% 10,869 20.30% Dakota 275,227 12.03% 194,279 9.78% 80,948 41.70% Hennepin 1,032,431 45.11% 941,411_. 47.41% 91,020 9.70% Ramsey 485,765 21.22% 459,784 23.15% 25,981 5.70% Scott 57,846 2.53% 43,784 2.20% 14,062 32.10% Washington 145,896 6.37% 113,571 5.72% 32,325, 28.50% Totals 2,288,721 100.0% 1,985,873 100.0% 302,848 15.30% 3 Economic factors include: • 1. Seventeen companies on the 1991 FORTUNE 500 and fifteen companies on the 1991 FORTUNE Service 500 lists are headquartered in the Twin Cities. 2. Major business strengths include: a highly educated work force; access to high technology; excellent transportation services; low cost energy; and available capital. 3. The metropolitan area has a strong and diversified business base, including companies involved in manufacturing super computers, electronics, medical instruments, milling, machine manufacturing, food processing and graphic arts. These businesses and others have helped to make the Twin Cities one of the largest commercial centers between Chicago and the West Coast. 4. The Minneapolis -St. Paul International Airport has passenger service to more than 80 major U. S. cities, as well as direct international flights. Minneapolis is one of a few cities in the country with an international airport just 20 minutes from downtown. 5. Serviced by more than 15 lines, the Twin Cities area is considered one of the country's major trucking centers.,. 6. Seven railroad companies serve the Twin Cities. Railroad service is integrated with the national railroad system as well as the Canadian national railway system. 7. Average employment (First Quarter 1991) was 1,338,140. the average unemployment rate was 4.9 percent. 8. Income is higher than most areas. Per capita personal income was $20,227 in 1989, compared to a national average of $17,592. 9. Largest employment sectors are: - Manufacturing; 261,800 Trade; 339,967 Services; 375,500 Government; 173,533 4 • < €: .......................... No. Rank Company y Sales Assets P 1 32 3M - St. Paul $11,990.0 $9,776.0 2 65 Honeywell - Minneapolis $7,241.6 $5,258.2 -- 3 85 General Mills - Minneapolis $5,798.0 $2,881.1 4 153 Control Data - Minneapolis $2,952.1 $1,860.7 5 183 Land O'Lakes - Arden Hills $2,442.2 $721.2 6 224 International Multifoods - Minneapolis $1,883.5 $716.0 - 7 296 Deluxe Check Printers - St. Paul $1,320.6 $847.0 8 317 Pentair - St. Paul $1,163.6 $1,720.6 9 333 Bemis - Minneapolis $1,076.7 $631.6 — 10 391 Cray Research - Minneapolis $784.7 $955.8 11 403 H.B. Fuller - St. Paul $753.4 $455.2 12 424 Medtronics - Minneapolis $746.6 $759.6 13 450 Jostens - Minneapolis $696.4 $452.8 14 441 Toro - Bloomington $650.8 $326.0 f, Source: Fortune Magazine, 1992 L Governmental factors include: 1. The University of Minnesota, with its main campus in the Twin Cities, is a major research institution. Its nearly 45,000 full -time students earn degrees in two hundred fifty fields of study. Former students and faculty have been awarded twelve Nobel Prizes for physics, medicine, chemistry, economics and peace. i_ 2. In addition to the University of Minnesota, there are twelve four -year colleges, j six community colleges, nine technical institutes and several proprietary technical L and trade schools in the metropolitan area. Recreational factors include: 1. Approximately 136,900 acres of land area set aside for parks, trails -and wildlife management areas. There are 949 lakes in the seven - county metro area. When not working, area residents sail, swim, fish and ski all within the metro area. 2. Sports fans support the Minnesota Twins baseball team, the Minnesota Vikings football team, and the Minnesota Timberwolves basketball team. 5 3. Arts and theater in the Twin Cities include: the Minnesota Orchestra, the St. Paul Chamber Orchestra, the Minnesota Opera, the Tyrone Guthrie Theater, • Walker Art Center, and the Minneapolis Institute of Art, the Minnesota Museum of Art and many community theaters. 4. The Bell Museum of Natural History, the Science Museum. of Minnesota, the Children's Museum, the Minnesota Zoological Gardens, and the Como Zoo and Conservatory provide the community excellent access to natural science museums and zoos. 6 CITY AND NEIGHBORHOOD ANALYSIS The`sub'ect property is located in the city of Brooklyn Center Minnesota. Brooklyn Center is J P PertY tY Y � Y a first tier suburb north of Minneapolis surrounded by: The Mississippi River and Fridley to the east. Brooklyn Park to the north Crystal and Brooklyn Park to the west Minneapolis and Robbinsdale to the south Major. employers in the City include: AIIS1> H:. CIT`.:. 0`: BRfiflO?':: C... .......... .....................__........ Y Employer Product /Service Employees Brookdale Center Shopping Center 1,700 Promeon Medical Devices 450 Ault, Inc. Electrical Components 270 Hoffman Engineering Electrical Enclosures 175 HealthOne Corp. Health Services 150 Graco, Inc. Spray Paint Equipment 100 TCR Corp. Metal Components 85 Highway 100 Sports Club Health Club 75 Hiawatha Rubber Co. Custom Rubber Molder 65 Cass Screw Machine Products Screw Machine Parts 50 Current unemployment is 4.3 % in the metro area as is contrasted with 7.1 % nationally. Area employment is 260,900 in manufacturing jobs and 1,054,600 in nonmanufacturing. Major transportation routes in the City include Interstate 94/694, U.S. Highway 169 and State Highways 100, 152 and 252. Since the completion of Interstate 94 to downtown Minneapolis, the rush hour commute time for a person living in Brooklyn Center and working in downtown Minneapolis has been reduced significantly. 7 CITY AND NEIGHBORHOOD ANALYSIS (CONTINUED) Year City County SMSA 1960 24,356 842,854 1,535,297 1970 35,273 960,080 1,874,612 1980 31,230 841,411 1,985,873 1990 28,887 1,032,431 2,464,124 An analysis of the Regional Multiple Listing Service for the area follows: DE.L ; HR I .: A ................; >::>;. . >;:::::: TII' IN ST......_STC�::: " > > >> >>:::::': >: _ 'Iht.:::::::.::::.::::::::I :::::::::::C::5.:.::::: .:: .:.::::...:..:..:..._:..._.:.:::::.::.:..:.:::.:::...:::::................................._.... ;..... ...... :.;:. RQtJKLYN::CEITHR:::>DISTRiCT.. .. :::::::::::::::::::::::::::::::::::::::::::.. ..........................: : : :.;... :: ;.L STNGS TEAT.WENT O >MART. <: N £7T' H$ >:>: ; >. >.>::>: Property Type # Sold % of. Average Sale Average Days Listings Price Market Time Sold Single Family 190 52 $78,908 72 Condo/Townhouse 47 56 $60,768 109 Duplex 1 25 $117,000 15 The subject property is located in a residential area in the southeastern corner of the city. Interstate 94 and the Mississippi River are located six blocks east. Grandview Park, a small neighborhood park, has access two blocks west. The Earle Brown Elementary School is one block west, and single-family residential makes up the majority of the neighborhood. The subject has good access to Highways 94, 694 and 100, and is a short distance from Brookdale Center, a regional shopping mall. Redevelopment in the neighborhood is evident. Many substandard dwellings have been razed within the past fifteen years and replaced with new mid-priced single family homes. Most homes in the neighborhood are well-maintained with updating evident on many properties. 8 SITE ANALYSIS The subject site is rectangular in shape with a frontage on 59th Avenue North of 134.74 feet with a depth of 75.34 feet. The total area is 9,782 square feet. The dimensions are: 73.53 on the west 73.29 on the east - 134.74 feet on the south 134.72 feet on the north Land Area: 9,782 square feet Shape: Rectangular Frontage: 134.74 feet on 59th Avenue North Topography: Level Drainage: To the west and south • Soils: No soil tests were made and they are assumed to be good. Landscaping: Minimal Easements: No apparent easements were observed. Utilities: Electricity, natural gas, telephone, cable television, city sewer and water. Sidewalks: Along 59th Avenue North - Curb and Gutter: Concrete (Along Emerson Avenue North) Street Surface: Bituminous surface Zoning: R -1, Single - Family Residential Restrictions: None 9 IMPROVEMENTS ANALYSIS Type/Style: One-story, wood-frame, single-family residential with basement and gable-style roof. Size: ........... ... ............. .............. .................... ..................... ------------- ........ . . . . . . ....... ............ ......... X ............................. .......... . . . . . . . . ....... .. . . ................ .......... .... ............ ...... ......... ........ ........ .................. .... . ......... . ....... - ----- . ...... ....... M . ......... .. ............. .......... .. ..... X ... . ............................. ... -------------------- ................ .............. ................................. . . . .......... ........... ---- ------- ............. ... ... ............................. ...... ....... .. ... ................................... .............. . . . . .. ...... ........................ .. ........................ ................... .... . ......... ...... ........ ................ ....... . ......... .... .. . .... ............... ............ ..... .. . . .................... ........... .............. ................ ...... ..... . ............................... .......... .................. ........ - .... - ............ Description Dimensions Square Feet 1.0 Story w/Basement 22 x 20 440 1.0 Story w/o Basement 12 x 6 72 1.0 Story w/o Basement 2 x 8 16 Front Entry Porch 8 x 12 96 Garage 24 x 22 528 • 528 s.f. of living area TOTAL 96 s.f. of porch area 528 s.f. of garage Age: 1928 Exterior: Metal siding Roof Cover: Asphalt shingles Garage: Two-car wood frame Windows: Double-hung, some awning. Plumbing: A full bath is located in the northeast comer. In the kitchen the plumbing consists of a single compartment steel sink. In the basement there is a double concrete laundry tub. There is a 40-gallon gas hot water heater. Waste pipes are caste iron. Electrical: Appears to be adequate. • Heating: Tempstar gas-forced air furnace, with central air conditioning. 10 Interior Finishing: The interior is finished as follows: ,t - Livin g room: Carpeted floors, painted walls and ceiling. - Full bathroom: Linoleum floor, painted and plastic tile wainscott walls; painted ceiling. Kitchen: Linoleum floor, painted walls and ceiling, ten lineal feet of base and ten lineal feet of upper cabinetry (low quality). One bedroom: Carpeted floors, painted walls and ceiling. Basement: There is basement under most of the house. The addition to the east and projection to the south have no basement. Other features: There is a front entry porch. Design: The home was originally built as a small one - bedroom home. Its design, by the nature of its small size is poor. The bedroom is small. It appears possible to add onto the home, but it does not seem economically prudent. Construction quality is poor. Condition: The subject property is in poor condition. i i �i 11 HIGHEST AND BEST USE 1� The term highest and best use is defined within the definitions section of this appraisal. The highest and best use of the subject property is analyzed by application of the four tests: What is physically possible? - - What is legally permissible? What is financially feasible? What is maximally productive? Application of the physically possible test reveals that there are no apparent subsoil problems - or site configuration problems to inhibit development. The subject site is a residential tract of 9,782 square feet. The subject is zoned R-1, single - family residential. The subject, if vacant, would be improved with a single- family home that would be similar in style, size and price with others in the neighborhood. Application of the test of the highest and best use of the site as improved indicates that the current use does contribute to overall property value and meets all tests of highest and best use. 12 APPRAISAL METHODOLOGY GENERAL APPRAISAL The valuation of a typical parcel of real estate is derived principally through three basic approaches to value: the Replacement Cost Approach, the Sales Comparison Approach, and the Income Approach. From the indication of these analyses and the weight accorded each, an opinion of value is reached based upon expert judgement within the outline of the appraisal process. More specifically, the approaches to value are described as follows: Replacement Cost Approach This approach requires that a current estimate of the cost of replacing the improvements be made, from which must be deducted accrued depreciation in terms of physical deterioration, functional obsolescence, and economic obsolescence, if any, and to which is added the estimated value of the land, as if vacant and put to its highest and best use. Sales Comparison Approach The Sales Comparison or Market Data Approach is based upon the principle of substitution, that is when a property is placed on the market, its value tends to be set at the cost of acquiring an equally desirable substitute property, assuming no costly delay in making the substitution. Since no two properties are ever truly identical, adjustments to the comparable are necessary for differences in location, quality, condition, size, market appeal, and other matters. these considerations are a function of the appraiser's experience and judgement. Income Approach The Income Approach involves an analysis of the property in terms of its ability to provide a net annual income in dollars over a given economic life. The estimated net annual income is then capitalized at a rate commensurate with the relative certainty of its continuance and the risk involved in ownership of the property, by utilization of the formula: Net Income, divided by Capitalization Rate, equals Value. For residential property of less than four units, a gross rent multiplier is developed by dividing the sale price of comparables by the unadjusted monthly rent. This factor is multiplied by the economic rent for the subject property to derive a value estimate. 13 i INCOME APPROACH The income approach was considered but not applied for the subject property. Single- family residences; are typically not rented for several factors including: - Lack of economies of scale for management purposes. - Very high non - homestead taxes in the State of Minnesota, approximately 1.5 -� times to 2.5 times higher than homestead taxes. Negative cash flow under typical circumstances. To properly apply the income approach, an appraiser needs rental sales and market rentals to derive a gross rent multiplier and estimate an economic rent for the subject. These types of comparables are very infrequent both in the neighborhood of the subject property as well as the _. entire metro area. Because of these factors, the income approach to value or specifically application of a gross rent multiplier and economic rent for the subject property was considered but not applied. • 14 DIRECT SALES COMPARISON APPROACH f To estimate the value of the subject property, four comparable sales were reviewed and compared to the subject to develop a value estimate. Descriptive data about these sales is contained within this report. The subject, is a one -story home with basement. All the comparables are located within one mile of the subject. Three of the comparables are of larger size (approximately 20 %). The original construction quality is comparable. The subject is inferior to all comparables in condition. The value conclusion for the subject property in the direct sales comparison approach is: FORTY THOUSAND DOLLARS ($40,000) S A ISTIGAI <ANAI3 IS. >:OF::`C(3MI'A IB 3 < 3 N.:.::: ...:.._::. ., : ...::., . iT TED PRICES .; ;._ <:.:.;::::. >`.° "' <? >:: > >:<::::: >.::., ::::::::::::::::::.: ..:: CNAD. :: S :.::::::::::::::::::::::::::::::::::,:::::::.. ;.::: : :: : :: :.::::::::::::::: Sample Size Four Mean $46,602 Range $30,000 to $55,450 Median $50,480 Most Similar Two Comparable ...::: >:::;:. >:;.::: >.::. ......:::::::<: >:: >::: >::: ::; >> :<: >::::::. >::: ............... -- ::: TED:: P . Sample Size Four Mean $42,749 Range $38,400 to $47,127 Median $42,735 Most Similar Two Comparable ............................ NC ....................... :.:.::: 11 $ 0 000 15 RESIDENTIAL SALES COMPARABLE ADJUSTMENT GRID • APPRAISAL OF 5900 EMERSONAVE. N. - Woodford BROOKLYN CENTER, MN. MARKET VALUE AS OF. 11211994 SUBJECT COMP. #1 COMP. #2 COMP. #3 COMP. #4 5900 5827 5206 5327 5310 Emerson Ave. N. Camden Ave. N. Drew Ave. N. Colfax Ave. N. James Ave. N. ID 01- 118 -21 -22 -0009 01- 118 -21 -24 -0075 10- 118 -21 -12 -0010 01- 118 -21 -34 -0093 02- 118 - 21-44 -0051 PID SALE PRICE On Mkt - $42,900 $55,450 $30,000 $51,959 $49,000 SALE PRICE TERMS N/A VA $0 Cash $0 Assume $0 FHA $0 TERMS .S.P.1 $55,450 $30,000 $51,959 $49,000 A.S.P.1 SALE DATE N/A 9/93 10/92 7/93 5/93 SALE DATE A.S.P.2 $55,450 $30,000 $51,959 $49,000 A.S.P.2 LT. 1947 1947 $0 1943 $300 1941 $1,000 1920E60 ($2,000) YRBLT. Sims.f.) 528 672 ($7,200) 506 $0 624 ($4,800) 640 ($5,600) S1ZE(s.f.) BATHS Full Full $0 3/4 $400 Full $0 Full $0 #BATHS M.FIN. None I Rooms 25% ($2,500) No Bsmt. $3,000 None $0 No Bsmt $3,000 BM FIN. AR( #cars) 2 1 0 1 2 GAR( #cars) ARS.F. 528 308 $1,320 0 $4,200 200 $1,968 528 $0 GARS.F. HEATING GFA/CA ti Equal $0 Gas Space Heat $2,500 Equal $0 Equal $0 HEATING of ROOMS 3 4 $0 3 $0 4 $0 3 $0 #of ROOMS C ONDITION Poor Average ($3,000) Fair ($2,000) Average ($3,000) Average ($3,000) CONDITION OT SIZE 9782 10981 $0 8100 $0 7560 $0 8925 $0 LOT SIZE J.AMT. NA ($11,380) $8,400 ($4,832) ($7,600) ADJ.AMT. .S.P.3 $44,070 $38,400 $47,127 $41,400 A.S.P.3 I VALUATION RECONCILL9 TION: 540.000.00 CGMMI3NTS Comparable #2 & #4 are considered the best indicators of value, due to the fact that they are one bedroom structures like the subject. Comparable #2 has similar square footage to the subject but there is a significant difference in Si between the subject and the rest of the compatables. I feel this difference, is surprewing the marketability of this property, as well as the value. There were some items identified but not considered contributing factors in this adjustment grid; porch on subject, metal shed on comp. #2, freestand fireplace and deck with patio door on comp. #4. 4/4/94 i ( i�t� t� C j'�. a �GJJ �� 4 j�A+ • i , 4 y , , �, }g!aiP� ' �• .n .. 1• �` ,` v VN A N . V'tZ at: 2 i - � a , *; !�f • "S - e j t F __ �'� -e., �° RR . w 'b� ♦ tl k91W <`s - p, •t,�,i l �v. ate 4•�;,`� a•• d n. ) g t t �,�" fits'.., !�. "•.� � � 1 .'r. l '�ytl\ 1qi� •/ J a�,h l�f+N�t � �'� �5�r�� '•'s ' - � �i �iflrl r f � \.�Yi�� .Q. t` p`•�. ? :. . `y llAtrt'.1!'..�i�_.ry Ali ..� � is ... • ,. • COMPARABLE SALE NUMBER TWO r� j LOCATION: 5206 Drew Avenue North, Brooklyn Center SALE PRICE: $30,000 — SALE DATE: 10/92 TERMS: Cash SITE: 60 x 135 UTILITIES: City sewer and water ZONING: R -1 - One - Family Residence BUILDING: One Bedroom, 3/4 Bath; One Story; No Basement YEAR BUILT: 1943 SIZE: 506 square feet GARAGE: None CONDITION: Fair f REMARKS: Located 2 miles southwest of subject; Superior condition, inferior basement and garage. 18 Di I 9Nvr � • r rz • .r r ".�� YJ A — '�, � ,. i'�� f� ��' o� � j,��f'Q(pf��•FjA&��c'"". .r�� � - _ ., Y s r'� , r „ j l r er�•r� (e� `E . � 1, 0� �� , ' t: ����� > ?k3'+7i�r�- `4Zf��' f`f� _ X . j �.0 -.. \�� 1.� v � 1 '+ s ! ,xj �X�v �� .. '011 , r'!' +• . �k. t 4r s Y _ . Liu IN • Y 1 1 - nom. T 'y � T .. �+ - T_ �y-♦�� .!'� ' tf� NZ'`��j.��•°Yt h.� k S A„ - F� RC`if• f Y ' '• ' r� • 111 1 • C f •• • i. • • C. 1 CL Nil CL HE E himININI fil Ell OUR MIA) M22 : 111 1w IWO IL w CL ism I ; loom rif Lou T,2 -love raw, Ila ra else COST APPROACH The method of estimating value by cost is a valuation technique whereby summation, the cost of reproduction of the improvements to the land are estimated based on current costs. From this total cost of reproduction, the depreciation or lessening of value due to all causes is deducted. The remaining depreciated value of the improvements is added to the current Market Value of the site. The resulting total is the "Estimate of Value by the Cost Approach ". Depreciation estimates were taken from the market. The site value estimate is taken from allocation and extraction from comparable sales. Direct Unit Construction Cost Estimate Marshall Valuation Service Page Low - 7 Low Single - Family Residence Basic Unit Cost $46.89 Square Foot Refinements 49 Cold Climate /GFA heat + 1.13 Total $48.02 Temporal & Locational Multipliers Current Cost Multipliers Central USA, Class D, Section 12 .95 Local Multiplier 1.14 Application $48.02 x .95 x 1.14 = $52.00 /s.f. The building contains 528 square feet of area. Application of the square footage via the calculator method of Marshall Valuation Service is: 528 square feet at $52.00 per s.f. = $27,456 22 i Basement ' 440 square feet at ($11.25 x .95 x 1.14) equals $5,361 Garage 528 square feet at ($12.47 x .95 x 1.14) equals $7,131 Porches Entry porch $2,573 Total Estimated Replacement Cost $27,456 + $5,361 + $7,131 + $2,573 Total Construction Costs $42,521 Estimated Accrued Depreciation Physical 30% Functional 20% Economic 0% Total 50% ($21,261) Depreciated Cost Estimate Depreciated Value of Site Improvements $2,000 Landscaping; driveway Land Valuation $20,000 Total Value Estimate $43,260 SAY $43,300 23 RECONCILIATION AND VALUE CONCLUSIONS The value estimate developed by the applicable approaches: Estimate of Value - Income Approach N/A Estimate of Value - Cost Approach $43,300 Estimate of Value - Market Approach $40,000 The cost approach has a limited influence in the final value estimate. The age of the subject property makes the estimate of depreciation difficult. There is limited data available on land sales. The cost approach is a fair indicator of market value. The market comparison approach analyzed the sales of similar properties. These properties were adjusted to equate them to the subject property. The market approach is a good estimator of value and receives the most consideration in the reconciliation. The income approach was considered but not applied for reasons stated in this report. It is my opinion, that the most probable indication of market value for the subject property as of March 27, 1993 is: FORTY THOUSAND DOLLARS ($40,000) 24 QUALIFICATIONS OF JOSEPH J. DABRUZZI C.M.A. EXPERIENCE April, 1991 to Present: Senior Appraiser, City of Brooklyn Center, Minnesota January, 1989 to November, 1989 Staff Appraiser, Michael McGinley & Associates, Ft. Myers, Florida September, 1988 to January, 1989 Real Estate Associate, Golden Shores Realty, Naples, Florida January, 1978 to July, 1988 Appraiser H, City of Brooklyn Center, Minnesota November, 1974 to December, 1977 Real Estate Associate, Real Estate 10, Maplewood, Minnesota EDUCATION Cretin High School - 1961 General Business Courses CONTINUING EDUCATION University of Minnesota October, 1993: Property Valuation Short Course October, 1992: IAAO - Standards of Practice and Professional Ethics Workshop February, 1992: IAAO 302 - Mass Appraisal of Income Property January, 1987: SREA 102 - Applied Residential Property Valuation September, 1985: MN State Seminar - Expert Testimony July, 1982: IA-AO 4 - Assessment Administration August, 1980: MN State Course H - Techniques of Mass Appraisal September, 1979: MN State Seminar - Land Description September, 1979: IAAO 2 - Income Approach to Valuation August, 1978: MN State Course B - Residential Appraisal August, 1978: MN State Course A - Assessment Laws - History Lakewood Community College May, 1979: SREA 101 - An Introduction to Appraising Real Property Minnesota Board of Assessors May, 1992: Public Relations in the Assessment Function May, 1992: Tax Court Preparations May, 1991: Seminar - Tax Exempt Valuation May, 1991: Seminar - Apartment Valuation July, 1987: Seminar - Assessor as Negotiator & Expert Witness June, 1986: Seminar - Tax Increment Financing _ June, 1986: Seminar - Form Report Writing Minnesota Institute of Legal Education October, 1987: Seminar - Appealing Property Valuation Miscellaneous Training June, 1993: How to Review Fannie Mae - Freddie Mac Residential Appraisals June, 1993: Ethics, Laws & Responsibility - Ron Melquist Education Center September, 1983: Seminar - Building Trades Blueprint Reading - Hennepin County PROFESSIONAL DESIGNATIONS /AFF LIATIONS Certified Minnesota Assessor - C.M.A. - 1979 to Present #1160 Graduate Realtors Institute - G.R.I. - 1976 Member MAAO - 1982 to 1989 and 1991 to Present Member IAAO - 1982 to 1988 and 1991 to Present Florida State Licensure - 1988 and 1989 Minnesota State Licensure - 1974 to 1977 Certified Federal General Appraiser #4003156 CONTINGENT AND LBMING CONDITIONS The value estimates and conclusions in the appraisal are made subject to these assumptions and conditions: 1. The property has been appraised as free and clear of all indebtedness under responsible ownership, and good management unless otherwise set forth in the appraisal. 2. No title search has been made and the reader should consult an appropriate attorney or title insurance company for accurate ownership data. 3. The furnished legal description is assumed to be correct. 4. The information contained in this report is not guaranteed, but it has been gathered from reliable sources. The appraiser certifies that, to the best of his knowledge and belief, the statements, information, and materials contained in the appraisal are correct. 5. No responsibility is assumed for matters which are legal in nature. It is assumed (without survey) that the improvements are located within the legally described property and that the buildings comply with all ordinances except as noted. 6. No analysis of soil conditions was required and none has been made. All value estimates in this report assume stable soil and any necessary soil corrections are to be made at the seller's expense. 7. Estimates herein are based on the present status of the national business economy, and the current purchasing power of the dollar. 8. A plot plan may have been provided in this report to assist the reader in visualizing the property. We have made no survey of the property and assume no responsibility for its accuracy. 9. The market value herein assigned is based on conditions which were applicable at the time the property was inspected and may vary at a later date. 10. The appraiser herein shall not be required to prepare for or appear in court or before any board or government body by the reason of the completion of this assignment without pre- determined arrangements and agreements. 11. Surveys, plans and sketches may have been provided in this report. They may not be complete or be drawn exactly to scale. 12. Possession of this report, or a copy thereof, does not carry with it the right of publication. It may not be used for any purpose by any person other than the party to whom it is addressed without the written consent of the appraiser, and in any event only with proper written qualification and only in its entirety. 26 13. Information in the appraisal relating to comparable market data is more fully documented . in the confidential file in the office of the appraiser. 14. All studies and field notes will be secured in our files for future reference. 15. The distribution of the total valuation in this report between land and the improvements applied only under the reported highest and best use of the property. 16. It is assumed that all applicable zoning and use regulations and restrictions have been compiled with, unless a nonconformity has been stated, defined, and considered in the appraisal report. 17. It is assumed that there is full compliance with all applicable federal, state and local environmental regulations and laws unless noncompliance is stated, defined and considered in the appraisal report. 18. This property is appraised in fee simple, assuming responsible ownership and management, unless otherwise indicated. This appraisal recognizes that available financing is a major consideration by typical purchasers of income producing real estate in the market and the appraisal assumes availability of financing to responsible and sufficiently substantial purchasers of the property in amounts similar to those indicated or implied in this report. 19. We are assuming: 1) that any asbestos or urea - formaldehyde that may have been used in the building materials in the property are in compliance with current statutes and regulations and do not present a health hazard to the public; 2) that lead -based paint has not been used in a manner that would cause health problems for the public using the property; and 3) that the property has not been the site for the dumping of hazardous substances or is subject to radon gas. If any or all of the above conditions exist, this could have a bearing on the market value of the property. 20. It is assumed that all required licenses, certificates of occupancy, consents or other legislative or administrative authority from any local, state or national - government or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based. 21. It is assumed that the utilization of the land and improvements is within the boundaries or property lines of the property described and that there is no encroachment or trespass unless noted on the report. 22. The forecasts, projections or operating estimates contained herein are based upon current market conditions, anticipated short-term supply and demand factors, and a continued stable economy. These forecasts are, therefore, subject to changes in future conditions. 27 c •+ f �Clo N 1 q ar� b}tts "1 t ' k I AT VIM .4t f� r.� \"l�'P o •i ,ti. '. ♦ t` x E �.. nor• �.(...� -. `, •� -t�' �� ` d Y < + � ice..• G � �r � � nC • • • 1 •' 'fir '.��^ ,;• s a I � WIWI •.•- •�:,.r�- ram.,.- ..-.__ - _..:...... ..._ � .-•^� E_ _�.__. � r c: t _ ... _� f 3 �K • !r`- • F •c >- t' .+�C ! -/ try .• 1 . }. ' +w. ;� .� • 1111 - � '� ����. ,�,• a ev �e ;►ps�A �. �i. yU :�. = • ";' Is t sL • �`�rYL � lw. � ' � L r � .•.•. C i �'rvv �. 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U D ) 6000 600! to 6001 _ s W (54) (5 W (38) () { 'Q 134 64 134.64 W 134.64 134.64 60TH AVE N + �1 W 1 f 134.6 1 25 u- 5954 5951, 5950 1E I i ID (16) 6 (1) I 1 134.66 134.66 134.6E 134.66 1 I 5.948 12 2 5945 5946 15 2 5997 ti (18) 15) (2) 28 134.67 134.67 134.67 134.67 590 5937 5932 3 5941 (27) (19) " (3) P 134.68 134.68 134.6E 134.68 5936 5929 5928 4 5935 1 4 %n (26) (20) (13) ' ( 2 30 134.69 ~. f 134.60 131.69 134.69 2.5 1 5924 5927 1 LAUDERDALE & MAVEN 12 in 5 { (12) ( T 5920 (94) r1 1 6+1 PART OF LOT f 1 ,34,7 134.7 6 I '� I TO MPLS 5916 5919 1 5914 (93) (11) (6) i 25 1 139.71 1 j 3 � 4 ( . T 1 134.71 N ®L3/N U 30 11.4 ����� Rocr I s 5909 10 v 7 n 6 in 5906 (25) (22) S909 5910 (t0 � ) r (7) 134.72 134.72 13. 134. T2 5900 7 5903 5900 a .5901 h e (23) (9) ( (24) m 25 60 34.74 134.74 134 T4 134.74 5 r 1 - M 59TH AVE 30 134.75 134.75 t 134.75 3. 5843 j [ 5836 5837 1 14 ' � 5840 ( 83) o (70) \n (103) (91) M ENS. UniNn. h- C,01~1.' •a1 [_ Plat Ma i -• .t.. T 1 1•-I. Q 1 M I oo,M Ij s Po2Cq )9VEN U E N 0 R - rq Y 'I Floor Plan