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1992 08-10 EDAP Regular Session
EDA AGENDA CITY OF BROOKLYN CENTER AUGUST 10, 1992 (following adjournment of City Council meeting) 7 p.m. 1. Call to Order 2. Roll Call 3. Discussion Items: 4. Approval of Minutes: a. July 27, 1992 - Special Session 5. Resolutions: a. Accepting Quotations and Awarding Contracts for the Remodeling of the "C" Barn at the Earle Brown Heritage Center 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 5340 Colfax Avenue North in Brooklyn Center c. Authorizing the Acquisition of Certain Real Property Within the City of Brooklyn Center and Establishing Offer of Just Compensation for Said Property Located at 419 69th Avenue North in Brooklyn Center d. Resolution Accepting Proposal From Thompson Associates, Inc., to Provide Professional Services for a Rental to Owner Conversion Program 6. Adjournment CITY OF BROOKLYN CENTER Council Meeting Date August 10, 1992 Agenda Item Number REQUEST FOR COUNCIL CONSIDERATION ITEM DESCRIPTION: EDA MINUTES - JULY 27, 1992 - SPECIAL SESSION DEPT. APPROV Brad Hoffman, EDA Coordinator MANAGER'S REVIEW/RECOABIENDATION: No comments to supplement this report Comments below /attached SUN EVURY EXPLANATION: (supplemental sheets attached ) RECOMMENDED CITY COUNCIL ACTION r . MINUTES OF THE PROCEEDINGS OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA SPECIAL SESSION JULY 27, 1992 CITY HALL CALL TO QRDER The Brooklyn Center Economic Development Authority met in special session and was called to order by President Pro tem ,Terry Pedlar at 10.18 p.m. ROLL CALL President Pro tem Jerry Pedlar, Commissioners Celia Scott, Dave Rosene, and Philip Cohen. President 'Todd Paulson was absent. Also present were City Manager Gerald Splintcr, Assistant EDA Coordinator Tom Bublitz, City Attorney Charlie LeFevere, Director of Planning and Inspection Ron Warren, and Council Secretary Nancy Berg. APPROVAL OF MINUTES JULY 1 19 - 3. !2 SPECIAL SESSION There was a motion by Curamissivnur Scott and 5ccondcd by Commissioner Rosenc to approve the minutes of the July 13, 1992, Special EDA meeting. The motion passed unanimously, DISCUSSION ITEMS SINGLE- FAMILY RENTAL TO OWNER CONVERSION PROGRAM The Assistant EDA Coordinator explained the Single - Family Rental to Owner Conversion Program to the Commissioners and answered their questions. Councilmember Pedlar stated he likes the idea of rental property going to families. Councilmember Scott also stated her approval of this excellent program adding that Brooklyn Center really needs a program like this. There was a motion by Commissioner Scott and seconded by Commissioner Rosene to accept the proposal and direct staff to prepare necessary documents. The motion passed unanimously, 7/27/92 - 1 - ACQU.ISITION OF 6601 BRYANT AVENUE NORTH The Assistant EDA Coordinator explained the acquisition process of 6601 Bryant Avenue North and showed the Commissioners slides of the property. Councilmember Rosene commended Jon Perkins for bringing this matter to the Council's attention. He further stated that he has toured the property and found the slides that were shown to be very complimentary. There was a motion by Commissioner Rosene and seconded by Commissioner Cohen to authorize the acquisition of 6601 Bryant Avenue North as recommended. The motion passed unanimously. RESOLUTIONS The City Manager introduced a Resolution Approving a Joint Powers Agreement to Form a Business Expansion /Job Retention Group. Councilmember Cohen stated he will not participate in the discussion to avoid any appearance of a conflict of interest. RESOLUTION NO 92-26 Commissioner Scott introduced the following resolution and moved its adoption: RESOLUTION APPROVING A JOINT POWERS AGREEMENT TO FORM A BUSINESS EXFANS10N /JQB RETENTION GROUP The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Rosene, and the motion passed. Commissioner Cohen abstained, The City Manager introduced a Resolution Accepting the Proposal of Co. mmunity Resource Partnership, Inc,. for the Development and Implementation of a Business Expansion/Job Retention Pilot Program. RESOLUTION N0,92,27 Commissioner Scott introduced the following resolution and moved its adoption: RESOLUTION ACCEPTING THE PROPOSAL OF COMMUNITY RESOURCE PARTNERSHIP, INC. FOR THE DEVELOPMENT AND IMPLEMENTATION OF A BUSINESS EXPANSION /JOB RETENTION PILOT PROGRAM The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Rosene, and the motion passed. Commissioner Cohen abstained. 7/27/92 -2- DISCUSSION IT(Continueci) AL LI I Yn*D RESTAURANT T I C S USSIGN The City Manager explained a vote by the residents is required before imposition of a one percent local liquor and restaurant tax, The purpose of this special legislation is to provide a local source of revenue for housing projects. The Assistant EDA Coordinator explained the local liquor and restaurant tax, reviewed possible; uses for the funds, and answered questions, Commissioner Cohen asked how much tax will be raised and how the tax will be used. He suggesting setting up a five year program to show the need for the tax is present and justification for a dedicated fund. He suggested having a dedicated fund as part of the November ballot, Commissioner Cohen asked staff proceed to develop a program along the Maxfield recommendations, call a special meeting of the Housing Commission, and discussion with Representatives Carruthers and Luther. Commissioner Scott suggested before and after pictures be compiled of what the City has been doing and what a wonderful influence this program has been on the neighborhood. The Assistant EDA Coordinator indicated staff will prepare this information, Commissioner Rosene stated this is one way to raise money for Brooklyn Center that is not solely from Brooklyn Center residents, There was a motion b Commissi staff to prepare a housing program for the a p e of a liqu � restaurant tax as suggested using the Maxwell Study as a guideline. The motion passed unanimously. RESOLUTIONS ( ntin edl The City Manager introduced a Resolution Accepting Quotations and Awarding Contracts for the Remodeling of the "C' Barn at the Earle Brown Heritage Center. He explained staff does not have quotes yet and suggested this item be tabled. There was a motion by Commissioner Scott and seconded by Commissioner Rosene to table consideration of a Resolution Accepting quotations and Awarding Contracts for the Remodeling of the "C" Barn at the Earle Brown Heritage Center, The motion passed unanimously, 7/27192 .3 s ADJOURNMENT There was a motion by Commissioner Rosene and seconded by Commissioner Scott to adjourn the meeting. The motion passed unanimously. The Brooklyn Center Economic Development Authority adjourned at 10:59 p.m. Jerry Pedlar, President Pro tem Recorded and transcribed by: Nancy berg Northern Counties Secretarial Services 7/27/92 -4- CITY OF BROOKLYN CENTER Council Meeting Date August 10, 1992 Agenda Item Number REQUEST FOR COUNCIL CONSIDERATION ITEM DESCRIPTION: RESOLUTION ACCEPTING QUOTATIONS AND AWARDING CONTRACTS FOR THE REMODELING OF THE "C" BARN AT THE EARLE BROWN HERITAGE CENTER DEPT. APPROVAL: Brad Hoffman, EDA Coordinator MANAGER'S REVIEW/RECOAMENDATION: No comments to supplement this report . Comments below /attached SUMMARY EXPLANATION: (supplemental sheets attached No) Memorandum and resolution will be handouts at the Monday evening meeting. RECOMMENDATION: 1 Commissioner introduced the following resolution and moved its adoption: n. EDA RESOLUTION NO. RESOLUTION ACCEPTING QUOTATIONS AND AWARDING CONTRACTS FOR THE REMODELING OF THE "C" BARN AT THE EARLE BROWN HERITAGE CENTER WHEREAS, the Economic Development Authority in and for the City of Brooklyn Center (EDA) established project number 8855 to convert the "C" Barn to additional meeting space; and WHEREAS, the EDA, at its July 13, 1992 session, accepted by motion alternative #1 for the development of the "C" Barn and directed staff to obtain written quotations; and WHEREAS, the EDA, as the general contractor, has received quotations from subcontractors and suppliers. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of Brooklyn Center that: 1. The budget for conversion of the "C" Barn be established at $85,091.00; 2. The following quotations from subcontractors be accepted: a) Demolition Watson -Scott Construction $ 2,560.00 b) Finish Hardware Custom Millwork 1,737.62 c) Wood Windows N. C. Bennett Lumber - Skylights 2,973.40 Stock Lumber - Gable Windows 507.53 d) Gypsum Drywall Mulcahy, Inc. 8,500.00 e) Acoustic Ceiling Acoustics Associates 1,624.00 f) Carpeting Carpet Country 4,693.00 g) Painting Larry Nessola 2,800.00 h) Mechanical Horwitz, Inc. 1,500.00 i t EDA RESOLUTION NO. i) Plumbing Horwitz, Inc. 1,000.00 j) Electrical Weber Electric 7,610.00 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 Coamcil Meiling Date Aucust io, 1992 Agenda Item Nmab- REQUEST FOR COUNCIL CONSIDERATION ITEM DESCRIPTION: 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 5340 COLFAX AVENUE NORTH IN BROOKLYN CENTER DEPT. APPROVAL: Tom 4ublitz, Assistant EDA Coordinatoi MANAGER'S REVIEW/RECOABIENDATION: No comments to supplement this report Comments below /attached SUMMARY EXPLANATION: (supplemental sheets attached Yes The EDA is requested to approve a resolution authorizing the making of an offer to acquire the property at 5340 Colfax Avenue North in Brooklyn Center. The property was reviewed as a discussion item by the EDA at its June 22, 1992 meeting, and the EDA approved a motion to authorize staff to present a proposal for acquisition of this property. The EDA board has received a copy of the appraisal report and review appraisal on the single family property located at 5340 Colfax Avenue North. Since EDA funds and no federal funds will be used for the acquisition, the property is exempt from the one for one housing replacement rule which requires that any affordable units demolished must be replaced on a one for one basis within a three year period from the demolition. Staff was initially approached by a real estate agent with Coldwell Banker who is listing the property at 5340 Colfax Avenue North. The agent representing the owner of the property requested the EDA to consider purchase of the property. Upon request of the owner, the City Building Inspector and I inspected the property at 5340 Colfax Avenue North. The inspection of the property resulted in a staff recommendation to consider the property for acquisition under the City's Scattered Site Redevelopment Program. I also requested the owner to write a letter stating her request to have the EDA consider purchasing her property. A copy of the letter is included with this council request form. The acquisition is being approached as a voluntary sale by the owner; and, as such, she would be required to formally waive any consideration of relocation benefits. Funding for the project is recommended to be from EDA funds programmed for acquisitions in the 1992 EDA budget. The appraisal recommends a value of $41,000.00 for the property and the review appraisal recommends a range of value between $37,000.00 and $43,000.00. An estimated budget for acquisition and demolition of the property is shown by the following: BUDGET ITEMS ESTIMATED COST Acquisition Cost of Property $ 37,000.00 - $ 43,000.00 Appraisal Fee 475.00 Demolition 6,000.00 Legal Costs 1,500.00 Closing Costs (including title transfer and prorated taxes) 1,500.00 Administration 1,200.00 Incidental Expenses (certified mail, messenger service, office supplies, etc.) 150.00 TOTAL: $ 47,825.00 - $53,825.00 • RECOMMENDED CITY COUNCIL ACTION Staff recommends approval of the resolution which would authorize staff to proceed with the negotiations for the acquisition. o A rc .� X5".3 4 0 -74 CITY 6301 SHINGLE CREEK PARKWAY OF BROOKLYN CENTER, MINNESOTA 55430 BROOKLYN TELEPHONE: 569 -3300 C ENTER FAX: 569 -3494 EMERGENCY - POLICE - FIRE 911 MEMORANDUM TO: Tom Bublitz Assistant EDA Coordinator FROM: Mark Parish ar ans City Assessor\M DATE: August 6, 1992 RE: Appraisal Review 5340 Colfax Avenue North Per your request, I have reviewed the Appraisal Report of this property made by Scott Renne. I generally agree with Mr. Renne's analysis and conclusions. Having reviewed the comparables and adjustments, our records indicate a few differences from his information, however, those differences are minor and would not alter the conclusion. I would agree that comparable three is most similar, but I believe the condition and age adjustments could be larger given the state of the mechanical systems in the subject. While Mr. Renne did not specifically comment, I believe he may have considered this when he concluded a value of $41,000 while comparable three indicated a value of $45,300. Given the condition of the subject property and current market conditions, I believe its market value to be in the range of $37,000 to $43,000 and feel his conclusion of $41,000 is reasonable. If you have any questions or comments, please contact me at 569 -3355. �c �� ye " 19B6ALLdMEACA Cm' � r� 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 5340 COLFAX 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 5340 Colfax Avenue North: A. Appraisal Report dated July 25, 1992; B. Review Appraisal dated August 6, 1992; and 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 owner of the property located at 5340 Colfax Avenue North in the City of Brooklyn Center ( "the property ") has requested that the EDA consider the purchase of the property; 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 in a range between $37,000.00 and $43,000.00. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority for the City of Brooklyn Center as follows: 1. The EDA hereby finds and determines that the property is substandard and obsolete within the meaning of Minnesota Statutes Section 469.012. 2. The Executive Director of the EDA is hereby authorized to negotiate and enter into a purchase agreement for the acquisition of the property at a price within the range of market value established 40 by the review appraisal referenced herein, but at a price within such range which the Executive Director determines is appropriate. The Executive EDA Resolution No. Director is authorized to take such further actions as may be necessary to acquire the property. 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. J. Scott Renne, NUI g .� Real Estate Appraiser • Consultant • REALTOR „ i 1395 CHATTERTON ROAD EAGAN, MINNESOTA 55123 (612) 686 -9866 II ' July 25, 1992 Brad Hoffman EDA Coordinator City of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center MN 55430 Y , Subject: Market value appraisal on Beck property, 5340 Colfax Avenue North, Brooklyn Center, Minnesota. Dear Mr. Hoffman: t Pursuant to your request, We 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. i The definition of market value and the other contents of the report comply with the Standards of Professional Practice of the Appraisal Foundation. This report is subject to the assumptions a and limiting conditions contained herein. It is our opinion that as of July 19, 1992, the market value of the property is: FORTY ONE THOUSAND DOLLARS ($41,000.00) This conclusion is based upon our personal inspection and review of the property, comparable sales, and application of the appraisal process. Respectfully Submitted, J. Scott Renne, MAI, CAE Marri. P . Kuni , CAE -I- MARKET VALUE APPRAISAL OF THE PROPERTY LOCATED AT 5340 COLFAX AVENUE NORTH BROOKLYN CENTER, MINNESOTA i a i • FOR BRAD HOFFMAN EDA COORDINATOR CITY OF BROOKLYN CENTER 6301 SHINGLE CREEK PARKWAY t BROOKLYN CENTER MINNESOTA 55430 i x BY J. SCOTT RENNE, MAI MARRI P. KUNIK, CAE k �i TABLE OF CONTENTS INTRODUCTION PAGE Letter of Transmittal .............................. I Summary of Important Facts and Conclusions ......... II Certification ....... ............................... III References .......... ............................... IV D efinitions ......... ............................... V 3 DESCRIPTION, ANALYSIS AND CONCLUSIONS Purpose of Report ... ............................... 1 Function of the Report ............................. 1 a L egal Description ... ............................... 1 O wnership ........... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 S ales History ........ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 zReal Estate Taxes ... ............................... 1 S cope of the Appraisal .............................. 2 A rea Analysis ................................... City and Neighborhood Analysis 5 Sit Analysis ........ ............................... 8 Improvements Analysis ..... 9 High est and Best Use . .......................0....... 11 Appraisal Methodology .............................. 12 I ncome Approach ..... ........................0...... 13 S ales Comparison Approach .......................... 14 x Cost Approach ....... 0 . . . . . . . . . 0 . . . . . . . . . . . . . . . . . . . 23 R econciliation ....... ............................... 25 I TABLE OF CONTENTS (continued) 3 Qualifications of Appraisers 26 Contingent and Limiting Conditions 29 ADDENDA Photographs .......... ............................... Location Map ......... ............................... Zoning Map ........... ............................... Traffic. Volume Map ... ............................... Building Sketch ...... ............................... i e 1 i q 3 I i 2 F SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS Property Appraised: Wood frame single family home, one story, 664 square feet with a 259 square foot basement on a 10,080 square foot site. Address: 5340 Colfax Avenue North, Brooklyn Center, Minnesota, 55430 R Owner: According to Hennepin County Records the fee owner is Evelyn L. Beck. Appraisal Date: July 19, 1992. Appraisal Purpose: Estimate fair market value of the fee simple title. Zoning: R -2, Two family residence. Highest and Best Use: Current Use Market Approach: $ 41,000 Income Approach: NA Cost Approach: $ 41,700 Estimate of Value: $ 41,000 �� -II- 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. 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 personal inspection of the property that is the subject of this report on July 19, 1992. The owner, Evelyn Beck accompanied me on the inspection. 7. As of the date of this report, J. Scott Renne has completed the requirements under the continuing education program of the Appraisal Institute. 8. This appraisal assignment was not based on a requested minimum valuation or specific valuation or approval of a loan. �,t/tiCr J. Scott Renne, MAI Marri P. Kuni , CAE -III- REFERENCES The methods, facts and conclusions used in the preparation of this appraisal were obtained from our 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: S Zoning Ordinance: City of Brooklyn Center Brooklyn Center, MN Taxes and Special Assessments: Hennepin County Minneapolis, Minnesota Market Information: Hennepin County Various Realtors Multiple Listing Service (Residential and C /I) Plat Systems Services Metro Confidential Data Exchange Appraisal Terms and Methodology: Appraisal of Real Estate, 9th Edition 1987 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 ` � -IV- DEFINITIONS -� This appraisal uses definitions from several sources. The sources are specified in the reference section of the appraisal and they will be abbreviated within this section. 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 x 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 Y 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 i 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 eriod 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 property cannot be sold within 120 days, in your opinion, state the earliest possible date of a cash sale and explain your rationale. 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. -V- DEFINITIONS (continued) - Easement A nonpossessing interest held by one person in land of another person whereby the 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. Temporary Easement An easement granted for a specific purpose an a specific time period, e.g., a construction easement is terminated after the construction of the improvement and the unincumbered fee interest in the land reverts to the owner. Permanent or Perpetual Easement An easement in perpetuity; one 3 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. Highest 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 in these definitions is that the determination of highest and best use takes into account the contribution of a specific use to the community and community development goals as well as the benefit of that use to individual property owners. Hence, in certain situations, the highest and best use of land may be for parks, green belts, preservation, conservation, wild life habitats, and the like. -VI- 3 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 July 19, 1992. 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 7, Block 4, Bellvue Acres Addition, South 84 feet of west 1/2 excepting street. PID# 01- 118 -21 -34 -0067 OWNERSHIP According to Hennepin County records, the fee owner is Evelyn L. Beck SALES HISTORY According to Hennepin County records the property has not sold in the past year. REAL ESTATE TAXES Homestead real estate taxes payable in 1992 are a base tax of { $549.98 with no special assessments. The market value of the property is $18,500 land, $28,500 building, $47,000 total. .� -1- SCOPE OF THE APPRAISAL The appraiser has been requested to estimate the market value of the subject property. The subject property represents a single family home in the City of Brooklyn Center, Minnesota. f The following activities were done in conjunction with the appraisal: Physical inspection of the subject property and subject z neighborhood on July 19 1992 by J. Scott Renne and Marri Kunik. - Highest and best use analysis Survey and analysis of comparable sales and offerings for sale Application of the appraisal process f '3 i i r i 3 -2- AREA ANALYSIS Minneapolis - St. Paul Metropolitan Area The seven county metro area, Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington Counties, constitute the region influencing the subject property. It is located in south central Minnesota and is the major metropolitan focal point of the Upper Midwest. The cities of Minneapolis, population 368,383, and St. Paul, population 272,235 are dominant cities for the area. However, the suburban and peripheral suburban areas of the Twin Cities have a population exceeding the central cities. The metro area comprises almost exactly half of the state of Minnesota's population. MINNEAPOLIS /ST. PAUL MSA POPULATION CHANGP'1980... County 1990 1980 Change 1980 -1990 3 Population % Population % Increase % Anoka 243,641 10.65% 195,998 9.87% 47,643 24.3% Carver 47,915 2.09% 37,046 1.87% 10,869 20.3% Dakota 275,227 12.03% 194,279 9.78% 80,948 41.7% Hennepin 1,032,431 45.11% 941,411 47.41% 91,020 9.7% Ramsey 485,765 21.22% 459,784 23.15% 25,981 5.7% Scott 57,846 2.53% 43,784 2.20% 14,062 32.1% Washington 145,896 6.37% 113,571 5.72% 32,325 28..5% Totals 2,288,721 100.0 1,985,873 100.0$ 302,848 15.3 Source: U.S. Census The area is partially governed by the Metropolitan Council, a form of regional government with responsibility for common area services such as public transit, utilities distribution, waste management, etc. The industrial growth in Minnesota, and primarily in the Twin Cities, usually out paces the average growth rate for the United States. The Twin Cities metropolitan area has traditionally enjoyed a low unemployment rate, which is currently about four percent. The Twin Cities are the financial center of the Upper Midwest. The largest commercial banks are the First National Bank of Minneapolis, and the Norwest Bank of Minneapolis. Minneapolis is the headquarters for the Ninth Federal Reserve District. • -3- AREA ANALYSIS (continued) Other financial service organizations include Prudential Insurance Companies regional office, St. Paul Companies, Lutheran Brotherhood, and many other financial /insurance companies. The metropolitan area has a strong and well diversified industrial base. There are over 2,500 manufacturers based in the area including: FORTUNE 500 INDUSTRIAL COMPANIES No Rank Company Sales Assets t (000) (000) 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 -Mills. $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 $1720.6 =� 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 Source: Magazine, 1990 The Twin Cities have an excellent educational system including the University of Minnesota, with enrollment of over 50,000 students on four campuses. Other private colleges include Macalester College, Augsburg College, College of St. Thomas, Hamline University, and the College of St. Catherine. Culturally, the Twin Cities supports two museums, a science museum, two zoos, the Minnesota Symphony Orchestra, many civic theaters, and the nationally renowned Guthrie Theater. ' In conclusion, the economic climate for the Twin Cities is excellent. The area experiences a broad and healthy growth pattern based upon a diversified economy. The negative economic experiences of Minnesota agricultural economy and mining have by passed the area. Additionally, the Twin Cities have a reputation for an enlightened public and governmental climate which contributes to the quality of life. -4- CITY AND NEIGHBORHOOD ANALYSIS - The subject property is located in City of Brooklyn Center, Minnesota. Brooklyn Center is 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 Robinsdale to the south Major employers in the City include: XOp... �IN::: <Q >SfitCKlt'JN .:CN Employer Product /Service Employees Brookdale Center Shopping Center 1,700 Promeon Medical Devices 450 Ault, Inc. Electrical 270 Components Hoffman Engineering Electrical 175 Enclosures HealthOne Corp. Health Services 150 Graco, Inc. Spray Paint 100 Equipment TCR Corp. Metal Components 85 Highway 100 Sports Club Health Club 75 Hiawatha Rubber Co. Custom Rubber Molder 65 Cass Screw Machine Screw Machine Parts 50 Products 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 fora erson living in B Cente p ng rookly n r and working in Downtown Minneapolis has been reduced significantly. -5- CITY AND NEIGHBORHOOD ANALYSIS (continued) i ' . ... ......... . yeta� ds? .. Year City County SMSA 1960 24,356 842,854 1,535,297 1970 35,273 960,080 1,874,612 1980 31,230 941,411 1,985,873 1990 28,887 1,032,431 2,288,721 An analysis of the Regional Multiple Listing Service for the area follows. �4t2C AGO-- NT P .....:...:............. M 01M }y Property Type # Active Average Asking Average Days Listings Price Market Time Single Family 600 $98,004 71 Condo /Townhouse 241 $62,663 94 Duplex 24 $101,219 109 Lots /Acreage 16 $49,568 177 HAT 3n7EN` QF .MRRETN ,THE' THS % of Average Sale Average Days Property Type # Sold Listings Price Market Sold Time Single Family 428 48 $91,074 70 Condo /Townhouse 112 40 $62,335 76 ) Duplex 11 32 $97,863 240 Lots /Acreage 3 15 $35,833 85 } `� -6- CITY AND NEIGHBORHOOD ANALYSIS (continued) -� The subject property is located in a residential area in the southeastern portion of the city. The majority of the area is single family residential. The property has good access to Interstates 94 and 694 which are major freeways serving the northern suburbs and the core of the Twin Cities. F 3 f i t i s 't 7 5 SITE ANALYSIS The subject site is rectangular in shape with a frontage on Colfax Avenue North of 84 feet with a depth of 120 feet. The total area is 10,080 square feet. The dimensions are: 84 on the east and west 3 - 120 feet on the north and south v Land Area: 10,080 square feet Shape: Rectangular Frontage: 84 feet on Colfax Avenue North f Topography: Level Drainage: Adequate, to the west Soils: No soil tests,were made and they are assumed to be good Landscaping: Trees, shrubs, and grass Easements: No apparent easements were observed. Utilities: Electricity, natural gas, telephone, cable television, city sewer and water. Sidewalks: None Curb and Gutter: Concrete Street Surface: Bituminous surface Zoning: R -2, Two Family Residential Restrictions: None -8- IMPROVEMENTS ANALYSIS Type /Style: One story wood frame single family residential with a partial basement and gable style roof. ....:.......... . Description Dimensions Square Feet 1.0 story 20.5 x 28.5 584 Rear "L" 8 x 10 80 Basement 18.5 x 14 259 TOTAL 664 s.f. of living area Age: 1910 Exterior: Wood shingle siding. Roof Cover: Asphalt shingles; gable frame Garage: 14 x 22 = 308 square foot single car garage. Windows: Double hung Plumbing: A full bath located between the two bedrooms on the north side of the dwelling. Electrical: 30 amp fused circuit. Heating: Gravity. Interior Finishing: The interior is finished into: Living Room and dining room; carpeted floors, painted walls and ceiling. Bathroom; linoleum half walls and floor. I One bedroom; carpeted floors, painted walls and ceiling. Kitchen; linoleum floors, painted walls and ceiling, minimal cabinetry, both metal and wood. "� -9- IMPROVEMENTS DESCRIPTION (continued) Basement: Partial; concrete blocks and concrete floor. Design: The home is a very small two bedroom rambler with a design typical for its age and size. The living room, dining room 3 and kitchen are in a row on the south side of the home with an eating area and access to the basement in the "L ". The two bedrooms with the bath in between are off a hall, with access off the dining room, on the north side of the dwelling. All the rooms are small with the bedrooms being 8 x 9 and 9 x 12. Closet space is at a minimum. This home would comfortably serve a single person or couple. Any family larger than this would find the house to be "cramped ". Condition: Though the owner has kept the interior of the home "spotless ", the structure itself is in need of numerous repairs and replacements. The dwelling needs: - A new roof Exterior paint Plumbing to be brought up to code New wiring Overall, the building is in below average condition. -10- HIGHEST AND BEST USE 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 10,080 square feet. The subject is zoned R -2, two family residential. All new development in the neighborhood is single family homes. The - subject, e ct if vacant, ca would uld be improved with a single family � P g Y home that would be similar in style, size and price with others in the neighborhood. Application of the test of highest and best use to the site as improved indicates that the current use does contribute to overall property value and meets all tests of highest and best use. 3 -11- 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 then 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. -12- z 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 $1,200 to $1,700 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. -13- DIRECT SALES COMPARISON APPROACH To estimate the value of the subject property, five 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 an older, small, one story home needing repair work. The condition of the property reduces the marketability and was a primary criteria in editing sales data. The value conclusion for the subject property in the direct sales comparison approach is: t FORTY ONE THOUSAND DOLLARS ($41,000.00) t 9 `a 3 3 7 i t -14- SALES COMPARISON APPROACH (continued) STATISTICAL ANALYSIS OF COMPARABLE .BUILDING SALES UNADJUSTED PRICES Sample Size Five Mean $44,212 Range $17,000 to Median $49,500 s $54,810 Most Similar Standard $15,752 Comparable Three Deviation ADJUSTED PRICES Sample Size Five Mean $37,884 Range 25,360 to $45,335 Median $39,690 Most Similar Three Standard $7,435 Comparable Deviation VALUE CONCLUSION $41,000 -15- y_ .. �. ADJUSTMENT GRID NUMBER ONE E usar ; : ' caKP►BL>t aro.:,! i co►ara►B1 yw 2 is co�PxkJ► ao 5340 Colfax Avenue N. 5421 Girard Ave. N. 907 57th Avenue North, 5555 Colfax Ave. N. Brooklyn Center Brooklyn Center Brooklyn Center Brooklyn Center 4 blocks west 5 blocks N.E. 2 blocks north ....:. :.: �:::::::. $5 :'.':"::: ••:::o;..; :. ::c<•::a:o.;::::: n:>::>::;;:;:;: ; >.::;• ....... :.:::::. 17 000 :...:.......... 54 750 tiCOSS NA $62.50 per S.F. ...:�:.::::::.:'..:.:::::. 20.23 per s.f. k m P p $72.80 per e.f. IfA ;:?:•; Inspection /MLS HLS /Driveby HLS /Driveby HLS /Driveby vl►tit >.l1U.7ASAYflT� iTesar _...... _ ....... _. ... F>?? rK lYt A1# + ( -) $ ;;;;;;:: TIL 3kiNC{ %i i ; ?:;E: ?? ! : , + - $ ......; > ii 4"13gX 7� glO ' ?E.. ` . + - tm Ad'us ent ;;: <o::,;: •>a °' ^' A djustment ` <:::. �.`i'i i'C::'' iii': ?�ii: i..`. is :: :;:: >;� < ::�;r::;.; >:� ..... .........:......:.:.: .:;:..:.:•:.: <.::::..:::: ..... .:...:...:,... ,.., .....:.: 7 ......... ....... � ::::. .... Adjustment X�T!lCllFii.ylI75VS'i VA /$902 in points (902) Special Financing -CE 0 FHA Seller paid pts. (1,095) 7 -19 -92 4 -6 -92 0 8 -30 -91 0 7 -12 -91 0 :_ .........._... _..........._.._ ... Suburban Similar 0 Similar 0 Similar 0 ;JXxBk' 10,080 s.f. /Average 5,040 s.f. /inferior 1,500 13,500 a.f. /similar 0 10,125 s.f. /similar 0 DESIGY 711�D AFP$1i;:; 1.0 Story /Average Superior (1,500) Inferior 5,000 Superior (2,000) :C.03fSTk QBAYa Average Similar 0 Similar 0 Similar 0 11GK 1910 1925 (1,500) 1915 0 1948 (2,000) LYi1V1}I2Tt? Fair Superior (4,000) Inferior 5,000 Superior (4,000) 1►�Oq Total Bdrms Baths Total Bdrms Baths Total Bdrma Baths Total Bdrms Baths '.:z;; %>: 5 2 1.0 4 2 1 4 1 1 2,000 4 2 1 664 s.f. 877 s.f. (3,195) 840 s.f. (2,640) 752 s.f. (1,320 _.... ) 3. t ?3t3:it3S1�3 E : ............... ............................... RDgS B(f > Part/unfin Full /Rec Rm. (3,000) Part/unfin 0 None 2,000 ►UH#{,: Average Similar 0 Similar 0 Similar 0 A�IHCJCQETh2$6 Gravity gas /none GFA /Wndw (1,000) Gravity gas /none 0 GFA (1,000) Chli$O$�1' X. 1 car detached 1 car detached 0 1 car detached 0 1 car attached 0 ; . #!SI Yt)j :: None 3 seas pch (2,000) Enclosed porch (1,000) Similar 0 0 None 0 None 0 None 0 5 1 597 :... i;'3Yft7t,'�ib,7f��b5t�kY,� , ... $ r $9,360 Minus $9,415 ;: .... ::.:.::.:. 39 213 __... _ ..... ...............:::.::..........::.,,.::.:.::::::::.::..........:....:.: ::::.:.:: :::.:::.:.::.......... »:: •;:::;::>s o- r::::::.:•..:. ......... $25 360 45 335 o;;:: ;:;;; ::::•;i:::::.... .:.;.. �::.. - iii .. . ADJUSTMENT GRID NUMBER TWO .......... --------- 5340 Colfax Avenue N. 5409 Fremont Ave. N. 5518 Dupont Avenue North, Brooklyn Center Brooklyn Center Brooklyn Center ............ ....... -.... .... ......... 4 blocks west 2 blocks NW .. ... ................ . .............. .. .......... aq ... . ........... . .................... I ............. X .................................... NA .. ...... r ......... $46,000 q .. ....... $49,500 ............... .......... ........... ... ........ ......... $65.13 per S. $79.86 per s.f. NA is .................. Inspection/MLS MLS/Driveby MLS/Driveby ... ......... ....... . ......... .... . ... . ... .. ............ .............. ........... ............... .............. VWOM W17. 10STRIWTS ... . . .. ..... .... ... .. .... ........... ....... . .... . . . ......... ......... ... ... ..... .. Ad ustment . ... . .......... .... . j . ... Adj ustment . . .......... . .......... .............. ... .... ..... . FRA/$2,970 in points (2,970) VA No points 0 ........... ............. - 7-19-92 3-7-92 0 9-25-91 0 Suburban similar 0 Similar 0 .. ..... 10,080 a.f./Average 5,120 e.f./inferior 1,500 20,125 a.f./similar 0 .................. .................... ....... A137 1.0 Story/Average superior Superior ..... (1,000) (1,000) Average similar 0 Brick/superior (2,000) ....... . .. .......... — .... . ..... ...... .......... . ......... - . .. ........... . 1910 1920 (1,500) 1949 (2,000) ............... . . ..... ... ............. .. .. .. .. b M .... ............ Fair Superior (4,000) Superior ........ ........... (4,000) ........ Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths .... ....... .......... .. ..... ...... .............. .......... ... 2 2 1 3 1 1 2,000 . ......... 5 1.0 4 .......... .......... . ............ ....... ......... .. . ..... ...... 576 s.f. 1,320 .... 664 s.f. 720 s.f. (840) ............ .......... ............ ..... Part/unfin Partial 0 None 2,000 ... . ....... .... .... ..... ................ Average Similar 0 Similar 0 Gravity gas/none GFA (1,000) GFA/none .. . ... .............. (1,000) I car detached 1 car detached 0 1 car detached 0 .. .. .............. ....... ...... None None 0 One (1,500) . ....... ........... 0 None 0 None 0 ... .............. 0 0 . ............ ................ ... . . ........ . .. ............... Minus $9,810 Minus 7,680 .......... .............. ...... ........ . ........ ........... X ........... .... V . ............ A . M— $39, ... . . . .. 690 .. .............. . ........ ................ . ........ ..... ............... I....: ............... .......... . .... ..... .... ............ ...... ... .. COMPARABLE SALE NUMBER ONE LOCATION: 5421 Girard Avenue North, Brooklyn Center SALE PRICE: $54,810 SALE DATE: 4 -6 -92 TERMS: VA SITE: 40 x 126 UTILITIES: City sewer and water ZONING: Residential BUILDING: 2 BR /1 Bath; One Story plus attic; full basement YEAR BUILT: 1925 SIZE: 877 square feet GARAGE: One car detached CONDITION: Good REMARKS: Located 4 blocks west of subject; 100 amp elec service; new furnace 1982; new roof 1985; 3 season porch; stucco exterior -18- COMPARABLE SALE NUMBER TWO u LOCATION: 907 57th Avenue North, Brooklyn Center SALE PRICE: $17,000 SALE DATE: 8 -30 -91 TERMS: Other SITE: 100 x 135 UTILITIES: City sewer and water ZONING: Residential BUILDING: 1 BR /1 Bath; One Story; Part Basement; attic YEAR BUILT: 1915 SIZE: 840 square feet GARAGE: One car detached CONDITION: Poor REMARKS: Located 5 blocks east of subject; sold in "as is" condition; on market 64 days -19- COMPARABLE SALE NUMBER THREE LOCATION: 5555 Colfax Avenue North, Brooklyn Center SALE PRICE: $54,750 SALE DATE: 7 -12 -91 TERMS: FHA; 2 seller paid points SITE: 75 x 135 UTILITIES: City sewer and water ZONING: Residential BUILDING: 2 BR /1 Bath; One Story; No Basement - YEAR BUILT: 1948 SIZE: 752 square feet GARAGE: One car attached CONDITION: Average REMARKS: Located 2 blocks north of subject; Superior design; equal location; 20 days on the market; breezeway; many built -ins . -20- COMPARABLE SALE NUMBER FOUR •� "zr { LOCATION: 5409 Fremont Avenue North, Brooklyn Center SALE PRICE: $49,500 SALE DATE: 3 -1 -92 TERMS: FHA; 6 seller paid points SITE: 40 x 128 UTILITIES: City sewer and water ZONING: Residential BUILDING: 2 BR /1 Bath; One Story; Part Basement YEAR BUILT: 1920 SIZE: 760 square feet GARAGE: One car detached CONDITION: Rehabilitated REMARKS: Located 4 blocks west of subject; 110 days on the market. This is a new home on the inside, the entire bldg was gutted and only shell remains of original construction. All work done in 1990 -21- COMPARABLE SALE NUMBER FIVE a LOCATION: 5518 Dupont Avenue North, Brooklyn Center SALE PRICE: $46,000 SALE DATE: 9 -25 -91 TERMS: VA; no seller paid points SITE: 75 x 135 UTILITIES: City sewer and water ZONING: Residential BUILDING: 1 BR /1 Bath; One Story; No Basement YEAR BUILT: 1949 SIZE: 576 square feet GARAGE: One car detached CONDITION: Average REMARKS: Located 2 blocks north of subject; Brick veneer exterior; 119 days on the market. -22- 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 Section 12, Page 12 Class D, Fair Single Family Residence Basic Unit Cost $ 34.68 Square Foot Refinements Cold Climate /Gravity heat + .65 i Total $ 35.33 Size Refinements Floor Area /Shape 1.063 Temporal & Locational Multipliers Current Cost Multipliers Central USA, Class D, Section 12 1.04 Local Multiplier 1.14 Application $ 35.33 x 1.063 x 1.04 x 1.14 = $44.53/S.F. The building contains 664 square feet of area. Application of the square footage via the calculator method of Marshall Valuation Service is: 664 square feet at $44.53 /sq.ft. _ $29,567 -23- } COST APPROACH TO VALUE (continued) i Basement 259 s.f. x $10.23 x 1.04 x 1.14 = $3,141 Garage 308 s.f. x $13.35 x 1.04 x 1.14 = $4,875 Total Estimated Replacement Cost $29,567 + $3,141 + $4,875 Total Construction Costs $37,583 Estimated Accrued Depreciation Physical 40% Functional 5% Economic 0% Total 45% (16,912) Depreciated Cost Estimate Depreciated Value of Site Improvements $ 2 1 000 Landscaping; driveway Land Valuation 19,000 z Total Value Estimate $ 41,671 SAY $ 41,700 -24- 3' RECONCILIATION AND VALUE CONCLUSIONS The value estimate developed by the applicable approaches: Estimate of Value - Income Approach NA Estimate of Value - Cost Approach $ 41,700 Estimate of Value - Market Approach $ 41,000 The cost approach has a limited influence in the final value 3 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 These properties were adjusted equate them to the properties. d usted to a P P J 4 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 July 19, 1992 is: FORTY ONE THOUSAND DOLLARS ($41,000) -25- s APPRAISAL QUALIFICATIONS OF J. SCOTT RENNE, MAI, CAE WORK EXPERIENCE: 1978 - Present - Independent Fee Appraiser /Consultant /Realtor on a part time basis 1988 - Present - Washington County Assessor, Stillwater, MN 1981 - 1988 - City Clerk /Assessor, City of Hopkins, MN 1978 - 1981 - Assistant Assessor, City of Hopkins, MN Y 1974 - 1978 - Property Appraiser, City of St. Louis Park, MN 1973 - 1974 - Property Assessment Specialist, Wisconsin Department of Revenue, Madison, Wisconsin EDUCATION: Graduated from the University of Minnesota School of Business Administration in 1973 with a Bachelor of Science Degree in Business Administration. REAL ESTATE EDUCATION: AIREA Courses - Urban Properties; Real Estate Investment Analysis; Litigation Valuation; Industrial Valuation; Market Analysis; Highest and Best Use; Business Valuation; Hotel Valuation; Standards of Professional Practice. a� IAAO Courses - Appraisal of Income Producing Property; Techniques of Mass Appraisal; Assessment Administration; Instructor Workshops; Computer Assisted Mass Appraisal. SREA Courses - Introduction to Appraising Real Property; Principles of Income Property Appraising; Narrative Report Writing. University of Minnesota Continuing Education Courses - Computer Aided Assessment; Narrative Report Writing; Residential Appraisal; Apartment Appraisal; Assessment Laws; History and Procedures; Property Valuation Short Courses; Business Site Selection and Analysis. PROFESSIONAL DESIGNATIONS: Member, Appraisal Institute; Senior Accredited Minnesota Assessor; Certified Assessment Evaluator; Residential Evaluation Specialist. -26- t QUALIFICATIONS OF J. SCOTT RENNE (continued) PROFESSIONAL AWARDS: 1984 IAAO Member of the Year; 1984 Top Pen Award for best a selected article in "Equal Eves "; Primary author and coordinator of "Property Assessment" slide presentation, winner of 1985 IAAO Public Information Award; 1989 and 1990 IAAO Presidential Citations. REAL ESTATE EDUCATOR EXPERIENCE: Developed and taught courses and seminars for the University of Minnesota, International Association of Assessing Officers, Minnesota Association of Assessing Officers, Minnesota School of Real Estate, and ProSource Educational Services. CURRENT PROFESSIONAL ACTIVITIES: IAAO Executive Board; IAAO Narrative Report Grading Committee; P g , State Board of Assessors Narrative Re _ ort Grading Committee . P g v Author of "Real Estate Financial Indicators" column in "Equal Eyes "; IAAO Property Appraisal and Assessment Administration Global Editor; Greater Minnesota Chapter of Appraisal Institute Board of Directors; AIREA Regional Ethics and Counseling Panel; Board of Directors, Minnesota Association of Professional Appraisers. PROFESSIONAL MEMBERSHIPS: Minnesota Association of Assessing Officers; Minnesota Chapter of International Association of Assessing Officer; International Association of Assessing Officers; Appraisal Institute; Citizen's League; International Right of Way Association; Minneapolis Board of Realtors; Minnesota Association of Realtors; National Association of Realtors. CLIENTS SERVED: Attorneys, Lenders, Developers, Governmental Agencies, Private it Individuals and Corporations. Qualified as an Expert Witness in Minnesota Tax Court, District Court and Condemnation Commissioners' Hearings g - Licensed Minnesota Real Estate Broker #07545920. - Licensed Real Estate Appraiser #4000733, Federal Certified General level -27- r QUALIFICATIONS OF MARRI P. KUNIK i Appraisal Education Society of Real Estate Appraiser's Course 101, Introduction to Appraising Real Property, 1985 Appraisal Institute Capitalization Techniques Week A, August, 1992 International Association of Assessing Officers: Course 2, Income Approach to Valuation Course 4, Assessment Administration Course 302, Mass Appraisal of Income Producing Property Course 305, CAMA Applications Minnesota Assessing Education: Course A, Assessment History Course H, Mass Appraisal Various seminars given by the IAAO, Appraisal Institute, MAAO, NCRAAO Professional Affiliations /Designations: CAE designation of the International Association of Assessing Officers and membership in the same organization. Within the IAAO I am active as a grader of residential demonstration appraisals that have been completed by current candidates working towards the RES and CAE designations. SAMA designation of the Minnesota State Board of Assessors. Membership in Minnesota Association of Assessing Officers. Candidate member for the Appraisal Institute. Appraising and Assessing Licenses: Federal Certified General License #4002600 State of Minnesota Assessing License #1497 Education _ 112/180 credits completed toward Finance degree at the University of Minnesota, Carlson School of Management (am currently enrolled). i -28- 3 CONTINGENT AND LIMITING 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. �T 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 3 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. 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. -29- CONTINGENT AND LIMITING CONDITIONS (continued) 15. The distribution of the total valuation in this report between land and 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 statues and regulations and do not present a health hazard to the ublic• 2 that lea based d bas paint has not P ) p been used in a manner that would cause health problems for the public using the ro ert p p y; 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. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. 21. 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. 22. It is assumed that the utilization of the land and improvements is within the boundaries or ro ert p p y lines of the property described and that there is no encroachment or trespass unless noted in the report. 23. 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. f -30- A z w A ca i ",. 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N. G. at' Ol vL AvE. 41' I 1 a",T I'l. �n �I 3� 1 GIDRAL iER RD. f I I LLTOfj S 'VEW I 1 I\ a•'• ,•, 1960 GbOREA \ISI � � fA1RMAr (Kt. A ' �tn AvE. N. Y FRID LEY +e rn Av f. = N. E. ;�. Es «H.aER u.� `AIRR.. oR. BRIGHTON \1980 POP. O - I ('OLUbiBIA 1 0 u c 30228 $ N Ii' /i' AvE. CHECRr u. g g f 23269 •I AY E. 730% I7m AVE. " N•E. HEIGHTS & T3oN R2AA F 16%1 1980 POP, 2. f R2Y 27 31 JS 16 AVf. K r „ PAflVIEs \ N 20024 i C 2 25130 N 16 th AVE. K E. �" AK. s l 1 1. MAIDEN CA. �, i j 36171 4 5 S'S AVE. 2. 1VANgE PL. •'�- 52 AVE s .�. N.E. i' (D I '„ i5 <I I I A VE.- N a; (fit � .E. ;{ a j 4] AVE. S N g s C• ;I LVC. LAaE TER �� V ' �^ J4VFR LuE C Y AY E. ' N. L P 131d AVE. N.E..a T, � 12%7 AVE. N.E. x ' /2nd >? ii Q (\ 4!t o j A z ( 1 2 r 41: AvE. LakeAVE K — f2 416t AVE. N N o N (� QGEE 41 rn u AV E. N. �O T U AVE. �'� c7 Y N.E. J i. ilvf P �' j\ 1 6 rn AY E. K y Q �j 39 fh St ® Ia t i W 'P, N d AVE. Q t.I t y 39" ., E. �" N w N.E.g J9tn AvL 1 :�� IS r Av E• ( 1 7 $ �]6t AV E. N.E. _ , H W I `^ nn rC. WTI Uv K � I 36th Avf. .'3 / A I E. •!�°B 1 - Kf. Y \` A1tV0 37 to CO AVE. N.E. I 90 i L .rE. \ o •,\ ,. H T' .�IN C 36Th A `n N.. J6 , _ *� EN N. $ P tl E. N. �� w h I 36 th AvE. u 3 J6rn AvE. i� ,� '1000 7 Y rf. ��yy 36 i� I Mtn AVE. MEN. IY! i u z Ird I Av E. u. 35 in AYE. _' q y z ~ r t i i z �� \ = i? 35 , A �,VD• 35 to = Ar . �•�' �" 35 I A VE.K E.', N. 3 Pte' �` \Uua \/ .Xe I 1 Sae _ L'rr 7 pGE CO 71 in Av E. �N E. JNhav, ,y 31 to AVE u K It C rn �AVIE. N. \\ 'k \� 1 \�'ONr P«AY L \ 65� g i ' 41rhl AV �u. 2 N fCLOALE , 72 n0 A4 E. K E. 32•+d I NG AV v I �\ �•\ \ S ANTNONr f f ]Iat AYE, ? K E. Y Y 31st to IA E MINNEAPOLIS 1980 POP. 370951 7o A V E. N. E. d N AV E. A W."A rM M Av 9 E 7 29 129N th AVE. N, E. � Nln w I t• // l N. 1 1e to AV E. / R21i / = PAaI�AV( it AV . o y u 27 rn AVE. N.E. N „I 21M AYE N. E. i y � o€ _ A J M 11 a � . Av E. 2 6 th b v E. N.E. �' N to AYE S ] 1� F N. E. 3 PQ /4f•. \ y � t y2 - l0! AYE. N. ® N LC! AvC N.I. i '~^ N N IJ LOR RV~ a AV C. N. E. 1•� 6 ki 30 tnI Jist AYE �I h iA. T 7 24 M AV E. 01.1 >D fh t AVE. K 23 r A , E, r H '^ o 13'0 31 f 2] rd AvE. KC. u to i AVE. N y Z Alt E. £ .1 y L7 22 M AVE. n� •� �1 rn 261 to AVE, N. " Y. 20 /h AV L N S 20 +n AVE KE g 1 AVE - 1' b K 19 M v AV s 1! yi AYE N E i 0 tt M AYE, N• I6rh AV I6M AV E. I I N. E. /• i 111 rn Av E. t S� N• 16 ih r AV L u. r1 H a 16fn A VE. NL RI DGEWAY is In E ii SMAV • R AY ` v, � AV L N. C. E. iAl H I s 4 N. N j ® p Y u E�55 ! 22 n0 Av E. u i K \Af AVE q S u E ti N H j 11t VE.j N 51 E. I4M AVf. N.E. Yf u Sd : > \� to 7 21 st AV h AV E.' E. . h " �1_ .-I j eR0A0RIAV 5{ 1� _ Ir AV _I �r erto r AT ® c q N - -- .si. �_I N r' �0'O aAO.A. V N. A Y' r `/• / W J q t N CIM 1I4R1 \Q « N•j AVE a ii r j - E� r t H. ¢ \ \t . i 1YS� �'1 5U W ER 1 SI w SUMMER a♦ I .� N V r '^ c •n 1 � E 3 Arw y c \ §,t. NJ ' y ' i if m � ti N b W Art. �o 'rte •� SP RI NG N `Y r . AVE . u. N. 6 lt` ,t(l 1 �, 6 NE N• o 1 st 1 yp - Ail N N• lN1xl ` tt M ► V '� Ny N' �I'S� NRINT �SI ry IN1ER�v. S1. 1 k Y ! }R ►fE1C EPIN I AYf. . � 9r^ s r r \ V t� AA v,'>\ _� bw ftssar bw ocor"Wow is" Traffic - Volume Map ` Building Sketch 29 to Ore Story -,rfial 783rnt' 8.3 28.5 20.7 3 Ave. N. Address: 5'.�}O Co q �rr�kl�l►� Ce►� -t�ef CITY OF BROOKLYN CEN'T'ER Council Mating Date Aueust 10.1992 Age.Wa Item N.ber -- C— REQUEST FOR COUNCIL CONSIDERATION ITEM DESCRIPTION: 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 419 69TH AVENUE NORTH IN BROOKLYN CENTER DEPT. APPROVAL: Tom Bublitz, Assistant EDA Coordinator MANAGER'S REVIEW/RECOMIM[ENDATION: a. 4 "4 • No comments to supplement this report . Comments below PP P attached / SUMMARY EXPLANATION: (supplemental sheets attached Yes The EDA is requested to approve a resolution authorizing the making of an offer to acquire the property at 419 69th Avenue North in Brooklyn Center. The property was reviewed as a discussion item by the EDA at its June 8, 1992 meeting, and the EDA approved a motion to authorize staff to present a proposal for acquisition of this property. The EDA board has received a copy of the appraisal report and review appraisal on the single family property located at 419 69th Avenue North. Since EDA funds and no federal funds will be used for the acquisition, the property is exempt from the one for one housing replacement rule which requires that an affordable units demolished must be replaced on a one for one basis within Y p a three year period from the demolition. Staff was initially approached by the owner of the property in May of this year regarding a request to consider acquisition of the property. An inspection of the property by the City Building Inspector and myself resulted in a staff recommendation to consider the property for acquisition under the City's Scattered Site Redevelopment Program. I also requested the owner to write a letter stating his request to have the EDA consider purchasing his property. A copy of the letter • is included with this council request form. The acquisition is being approached as a voluntary sale by the owner; and, as such, he would be required to formally waive any consideration of relocation benefits. Funding for the project is recommended to be from EDA funds programmed for acquisitions in the 1992 EDA budget. The appraisal recommends a value of $34,000.00 for the property and the review appraisal recommends a range of value between $32,000.00 and $38,000.00. An estimated budget for acquisition and demolition of the property is shown by the following: BUDGET ITEMS ESTIMATED COST Acquisition Cost of Property $ 32,000.00 - $38,000.00 Appraisal Fee 475.00 Demolition 7,000.00 Legal Costs 1,500.00 Closing Costs (including title transfer and prorated tines) 1,500.00 Administration 1,200.00 Incidental Expenses (certified mail, messenger service, office supplies, etc.) 150.00 TOTAL: 43,825.00 - $49,825.00 • RECOMMENDED CITY COUNCIL ACTION Staff recommends approval of the resolution which would authorize staff to proceed with the negotiations for the acquisition. i CITY 6301 SHINGLE CREEK PARKWAY OF BROOKLYN CENTER, MINNESOTA 55430 1 :, OOK LY N TELEPHONE: 569 -3300 C ENTER FAX: 569 -3494 EMERGENCY - POLICE - FIRE 911 MEMORANDUM TO: Tom Bublitz Assistant EDA Coordinator FROM: Mark Parish \\ City Assessor DATE: August 6, 1992 RE: Appraisal Review 419 69th Avenue North Per your request, I have reviewed the Appraisal Report of this property made by Scott Renne. I generally agree with Mr. Renne's analysis and conclusions. Having reviewed the comparables and adjustments, our records indicate a few differences from his information, however, those differences are minor and would not alter the conclusion. The two comparables deemed most similar on page 15 are two and five. Please note that both were estate sales. Sale .two was originally listed at $39,000 and appears to have sold for less than the land value. But, similar to the subject, it is a small home in need of repair. Given the condition of the subject property and current market conditions, I believe its market value to be in the range of $32,000 to $38,00 and feel his conclusion of $34,000 is reasonable. If you have any questions or comments, please contact me at 569 -3355. �c '°�'°n �C 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 419 69TH 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 419 69th Avenue North: A. Appraisal Report dated July 25, 1992; B. Review Appraisal dated August 6, 1992; and 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; n and WHEREAS, the owner of the property located at 419 69th Avenue North in the City of Brooklyn Center ( "the property ") has requested that the EDA consider the purchase of the property; 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 in a range between $32,000.00 and $38,000.00. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority for the City of Brooklyn Center as follows: 1. The EDA hereby finds and determines that the property is substandard and obsolete within the meaning of Minnesota Statutes Section 469.012. 2. The Executive Director of the EDA is hereby authorized to negotiate and enter into a purchase agreement for the acquisition of the property at a price within the range of market value established by the review appraisal referenced herein, but at a price within such range which the Executive Director determines is appropriate. The Executive Director is authorized to take such further actions as may be necessary to acquire the property. EDA Resolution No. 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. i 3 a MARKET VALUE APPRAISAL OF THE PROPERTY LOCATED AT 419 69TH AVENUE NORTH BROOKLYN CENTER, MINNESOTA 8 FOR BRAD HOFFMAN EDA COORDINATOR CITY OF BROOKLYN CENTER 6301 SHINGLE CREEK PARKWAY BROOKLYN CENTER MINNESOTA 55430 BY J. SCOTT RENNE, MAI MARRI P. KUNIK, CAE TABLE OF CONTENTS INTRODUCTION PAGE Letter of Transmittal .............................. I Summary of Important Facts and Conclusions ......... II Certification ....... ............................... III References .......... ............................... IV Definitions ......... ............................... V 3 DESCRIPTION, ANALYSIS AND CONCLUSIONS Purpose of Report ... ............................... 1 Function of the Report ............................. 1 _ Legal Description ... ............................... 1 Ownership ........... ............................... 1 Sales History ........ ............................... 1 Real Estate Taxes ... ............................... 1 Scope of the Appraisal .............................. 2 Area Analysis ....... ............................... 3 City and Neighborhood Analysis 5 Site Analysis ........ ............................... 8 Improvements Analysis 9 Highest and Best Use . ....................... 11 Appraisal Methodology 12 Income Approach ..... ............................... 13 Sales Comparison Approach 14 Cost Approach ....... 00.....00 ...................... 23 Reconciliation ....... ............................... 25 i a TABLE OF CONTENTS (continued) Qualifications of Appraisers ........................ 26 Contingent and Limiting Conditions .................. 28 ADDENDA Photographs .......... ............................... E Location Map ......... ............................... Plat Map ............. ............................... Zoning Map ........... ............................... z Traffic Volume Map ... ............................... Building Sketch ...... ............................... MLSData ............. ............................... 3 1 3 SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS Property Appraised: Wood frame single family home, one story, 851 square feet with no basement on an 18,450 square foot site. Address: 419 69th Avenue North, Brooklyn Center, Minnesota, 55430 Owner: According to Hennepin County Records the fee owner is Eugene Bevers Appraisal Date: July 19, 1992. Appraisal Purpose: Estimate fair market value of the fee simple title. Zoning: R -1, single family residence. Highest and Best Use: Current Use 3 Market Approach: $ 35,000 Income Approach: NA Cost Approach: $ 32,000 Estimate of Value: $ 34,000 -II- L 4 r CERTIFICATION I certify that, to the best of my knowledge and belief: 1. The statements of fact contained in this report are true and x correct. 2. The reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions, j 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. 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. 3 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 personal inspection of the exterior of the property a that is the subject of this report on July 19, 1992. On , p April 13 1990 I inspected d the interior of the property for a previous apprai ecte sal. The owner, Eugene Bevers accompanied me on that inspection. Based on a phone call with Mr. Bevers the interior has not changed since the previous inspection. 7. As of the date of this report, J. Scott Renne has completed the requirements under the continuing education program of the Appraisal Institute. 8. This appraisal assignment was not based on a requested '. minimum valuation or specific valuation or approval of a loan. J. Scott Renne, MAI Marri P. Kunik, CAE -III- f REFERENCES The methods, facts and conclusions used in the preparation of this appraisal were obtained from our 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, MN Taxes and Special Assessments: Hennepin County Minneapolis, Minnesota Market Information: Hennepin County Various Realtors Multiple Listing Service (Residential and C /I) Plat Systems Services Metro Confidential Data Exchange Appraisal Terms and Methodology: Appraisal of Real Estate, 9th Edition 1987 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 a ) -IV- 1 DEFINITIONS This appraisal uses definitions from several sources. The sources are specified in the reference section of the appraisal and they will be abbreviated within this section. 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 property cannot be sold within 120 days, in your opinion, state the earliest possible date of a cash sale and explain your rationale. 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. -V- i x DEFINITIONS (continued) Easement A nonpossessing interest held by one person in land of another person whereby the 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. Temporary Easement An easement granted for a specific purpose an a specific time period, e.g., a construction easement is terminated after the construction of the improvement and the unincumbered fee interest in the land reverts to the owner. 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. Highest 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 in these definitions is that the determination of highest and best use takes into account the contribution of a specific use to the community and community development goals as well as the benefit of that use to individual property owners. Hence, in certain situations, the highest and best use of land may be for parks, green belts, preservation, conservation, wild life { habitats, and the like. -VI- i 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 July 19, 1992. 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. 3 LEGAL DESCRIPTION East 75 feet of west 175 feet of that part lying north of the south 112 feet; Lot 27; Auditor's Subdivision number 310 PID# 36- 119 -21 -12 -0033 OWNERSHIP According to Hennepin County records, the fee owner is Eugene M. Bevers. SALES HISTORY According to Hennepin County records the property has not sold in the past ten years. The property is currently listed for sale with Valley West Realty. The asking price is $39,900. REAL ESTATE TAXES Homestead real estate taxes payable in 1992 are a base tax of $533.68 with no special assessments. The market value of the property is $17,900 land, $27,200 building, $45,100 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 July 19 1992 by J. Scott Renne and Marri Kunik; a previous interior inspection was made on April 13, 1990. - Highest and best use analysis - Survey and analysis of comparable sales and offerings for sale - Application of the appraisal process r -2- AREA ANALYSIS Minneapolis - St. Paul Metropolitan Area The seven county metro area, Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington Counties, constitute the region influencing the subject property. It is located in south central Minnesota and is the major metropolitan focal point of the Upper Midwest. The cities of Minneapolis, population 368,383, and St. Paul, population 272,235 are dominant cities for the area. However, the suburban and peripheral suburban areas of the Twin Cities have a population exceeding the central cities. The metro area comprises almost exactly half of the state of Minnesota's population. MINNEAPOLIS /ST. PAUL. MSA POPULATION CHANGE <198d' -199© County 1990 1980 Change 1980 -1990 Population % Population % Increase % Anoka 243,641 10.65% 195,998 9.87% 47,643 24.3% Carver 47,915 2.09% 37,046 1.87% 10,869 20.3% Dakota 275,227 12.03% 194,279 9.78% 80,948 41.7% Hennepin 1,032,431 45.11% 941,411 47.41% 91,020 9.7% fi Ramsey 485,765 21.22% 459,784 23.15% 25,981 5.7% Scott 57,846 2.53% 43,784 2.20% 14,062 32.1% Washington 145,896 6.37% 113,571 5.72% 32,325 28.5% Totals 2,288,721 100.0% 1,985,873 100.0% 302,848 15.3% Source: U.S. Census The area is partially governed by the Metropolitan Council, a form of regional government with responsibility for common area services such as public transit, utilities distribution, waste management, etc. The industrial growth in Minnesota, and primarily n the Twin Cities usually out paces s the average e rowth to o I P g g rate for the United States. The Twin Cities metropolitan area has traditionally enjoyed a low unemployment rate, which is currently about four percent. i The Twin Cities are the financial center of the Upper Midwest. The largest commercial banks are the First National Bank of Minneapolis, and the Norwest Bank of Minneapolis. Minneapolis is the headquarters for the Ninth Federal Reserve District. -3- AREA ANALYSIS (continued) Other financial service organizations include Prudential Insurance Companies regional office, St. Paul Companies, Lutheran Brotherhood, and many other financial /insurance companies. The metropolitan area has a strong and well diversified industrial base. There are over 2,500 manufacturers based in the area including: FORTUNE 500 INDUSTRIAL COMPANIES No Rank Company Sales Assets (000) (000) 1 32 3M -St. Paul $11,990.0 $9,776.0 2 65 Honeywell- Minneapolis $7,241.6 $5,258.2 f 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 -Mpls. $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 $1720.6 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 Source: Magazine, 1990 The Twin Cities have an excellent educational system including the University of Minnesota, with enrollment of over 50,000 students on four campuses. Other private colleges include Macalester College, Augsburg College, College of St. Thomas, Hamline University, and the College of St. Catherine. Culturally, the Twin Cities supports two museums, a science museum, two zoos, the Minnesota Symphony Orchestra, many civic theaters, and the nationally renowned Guthrie Theater. In conclusion, the economic climate for the Twin Cities is excellent. The area experiences a broad and healthy growth pattern based upon a diversified economy. The negative economic experiences of Minnesota agricultural economy and mining have by passed the area. Additionally, the Twin Cities have a reputation for an enlightened public and governmental climate which contributes to the quality of life. x -4- i CITY AND NEIGHBORHOOD ANALYSIS The subject property is located in City of Brooklyn Center, Minnesota. Brooklyn Center is 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 Robinsdale to the south Major employers in the City include: Employer Product /Service Employees Brookdale Center Shopping Center 1,700 Promeon Medical Devices 450 Ault, Inc. Electrical 270 Components Hoffman Engineering Electrical 175 Enclosures HealthOne Corp. Health Services 150 Graco, Inc. Spray Paint 100 Equipment TCR Corp. Metal Components 85 Highway 100 Sports Club Health Club 75 Hiawatha Rubber Co. Custom Rubber Molder 65 Cass Screw Machine Screw Machine Parts 50 Products 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. -5- CITY AND NEIGHBORHOOD ANALYSIS (continued) U :t3.C1 i; �`o 1 5 P.O. � Year City County SMSA 1960 24,356 842,854 1,535,297 1970 35,273 960,080 1,874,612 1980 31,230 941,411 1,985,873 } 1990 28,887 1,032,431 2,288,721 An analysis of the Regional Multiple Listing Service for the area follows. h ': i:.'i: • ..i'•i. i:: ii::•iii'ii:'. .iii'•: i:'•i:'.::i •i:.:. i. •::' .:': " -... .... .. .:.:::: ii::: •�� {y � /y � ... : i:'.:::::: :'•::•iii S ':.in, >'.viii:�'•i::i:i: ):':i:'::: ...... I►..Ml i..iYM ' y y ,` `/�{y_�� ::w� Myy :. ......,. AA..:: IV. EA �f" i�W. i. �IiN!.:'• ii:' ...::::.::.:....::::::::: �i:.:: ::::.::::::'': 2 ii.:• :: .::::.. .. TER :: :.: ::' . : '.::: : :::::::: ii l ?:ii::::':::::::i::: i:'iii:(i:;: iii:v !j;:;:; <.:. ::::i:::::: :• i:'! J:', i': .: .. : :::. .. :'.:::i'•: )?'ii: }iiiii::. i}i: ii ?:i::4 ^iiiii::.i. f3QI Cf F3(Q{I+tl A:SRI :::::. i:'. i::::. ii:.;:.:;::;. i:. i:. i.::•..:'• i :::.;i:.:;.i:.i:.i::.;:.:;;.::: :«.::.i:.i:.;:.i:.: " > `::»::>::::>::::>::::>:<::<:>::::::>::<:::::::>:::>::>: c;::»::::: :>:::: »:<::;: >: ?:::::::: >>: : »:::: >:::':::;:•:: TI�E ;:i> i::. i'<>; ii;::<.;: i>;:.;'.;:. ii> isi> i;; i:;:.> i:. i:. ii:..;:.: �:.:;;> i> i:. i> is ;::•:::::::::::..:.:::::::::.: Property Type # Active Average Asking Average Days Listings Price Market Time Single Family 600 $98,004 71 :. Condo /Townhouse 241 $62,663 94 Duplex 24 $101,219 109 Lots /Acreage 16 $49,568 177 T : S C: ..5X MC3T'` % of Average Sale Average Days Property Type # Sold Listings Price Market Sold Time Single Family 428 48 $91,074 70 Condo /Townhouse 112 40 $62,335 76 Duplex 11 32 $97,863 240 i Lots /Acreage 3 15 $35,833 85 -6- } CITY AND NEIGHBORHOOD ANALYSIS (continued) The property is located in a residential area in the northeast portion of the city. It is approximately north of the intersection of Interstates 694 and 94. It is located approximately one quarter mile west of the Mississippi River and Durnam Island. It is adjacent to the right of way for State Highway 252 (also known as West River Road) which is a major north -south route serving the northern suburbs. 70th Avenue North is a signaled intersection off of U.S. Highway 252. Its traffic count is 4,750 cars per day. the subject property has easy access onto 252 at either 70th Avenue North or 66th Avenue North. Highway 252 has an average daily traffic count of 21,200 vehicles. The immediate area of the subject property is primarily single family homes. The homes are generally built in the 1950's and 1960's. Across the street on 69th Avenue North is The Village at River West apartment complex (address is 507 70th Avenue North). This is a wood frame two story complex with a total of 128 units. In conclusion, the City of Brooklyn Center and the neighborhood of the subject property represent a good environment for a residential property such as the subject. ) ) ) x i 3 7 '� -7- t SITE ANALYSIS The subject site is rectangular in shape with a frontage on 69th P 9 Avenue North of 75 feet. The total area is 18,450 square feet. The dimensions are: - 246 feet on the east and west - 75 feet on the north and south Land Area: 18,450 square feet Shape: Rectangular Frontage: 75 feet on Drew Avenue North Topography: Level Drainage: Adequate, to the west Soils: No soil tests were made and they are assumed to be good Landscaping: Trees, shrubs, and grass Easements: No apparent easements were observed. r Utilities: Electricity, natural gas, telephone, cable television, city sewer and water. Sidewalks: None Curb and Gutter: None Street Surface: Bituminous surface Zoning: R -1, One Family Residential Restrictions: None t 1 y• -8- 3 IMPROVEMENTS ANALYSIS Type /Style: One story wood frame single family residential with 3 basement and hip style roof. Size: .::..Q`.::. > ' '. :::::.:::::::.::::::::.......... ......................:::::::.: ::::: ..: FF : 3 v: .: .. ^:''J:•i'!::: is i:i .. •i: :i i::: •• :..::: 3 Description Dimensions Square Feet 3 1.0 story no basement 12.5 x 46 575 1.0 story no basement 8 x 34.5 276 TOTAL 851 s.f. of living area Age: 1942 3 Exterior: Wood shakes over asphalt siding • Roof Cover: Asphalt shingles; hip frame Garage: None Windows: Double hung with some vinyl aluminum combination storms and screens and some storm windows. Plumbing: Kitchen sink, one full bath and laundry hookups in utility room. Electrical: The electrical service is located in the northwest bedroom closet. It is 60 amp capacity with circuits fused by screw in fuses. There is some exposed conduit and electrical fixtures that need repair. Heating: Gas forced air heat. The furnace is located in the attic. i Interior Finishing: The interior is finished into three bedrooms, living room, kitchen, bathroom /utility room. Interior floor cover is carpet. Wall cover is painted fiberboard, unfinished waferboard and paneling. Other Improvements: There is a scuttle to an attic area. There is a 7 x 8 foot storage shed in the back yard. F 3 IMPROVEMENTS DESCRIPTION (continued) Condition /Repairs: The subject property is in fair to poor condition. The exterior has wood shingles over asphalt siding. Some are broken and need replacement. They need repair, preparation and painting. The roof has asphalt shingles that appear to have been replaced recently including new vents. The soffits and facia are in poor condition. They need repair of rotten and missing boards, preparation and painting. Some storm windows have been replaced with vinyl combinations. .. On the interior, the carpeting is poor quality and worn. Two bedrooms have waferboard on the walls which is unfinished. The drywall throughout the house is the old fashioned fiberboard style which is of poor quality. The bathroom /utility room and hallway entering that room have several portions of drywall missing. There is some electrical repairs to be made and upgrading of the electrical service would be desirable. The owner states that all mechanical systems work well. Overall, the building is of poor quality and in below average condition. z z s i z ?� _10_ i i 3 u HIGHEST AND BEST USE 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? Y 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 18,450 square feet. The subject is zoned R -1, one 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 highest and best use to the site as improved indicates that the current use contributes only minimally to overall property value. It is highly likely that if sold, the building would probably be torn down within a reasonably short period of time (up to five years after sale) and a new one built. Therefore, the highest and best use as improved would be for the site to be improved with an average quality home in the same price range as the surrounding properties. p 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 then four units a gross rent multiplier is developed by dividing the sale 3 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. -12- 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 $1,200 to $1,700 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 3 subject property was considered but not applied. i 1 -13- DIRECT SALES COMPARISON APPROACH To estimate the value of the sub p six � p p y, 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 an older, small, one story home needing extensive repairs. The condition of the property reduces the marketability and was a primary criteria in editing sales data. The value conclusion for the subject property in the direct sales comparison approach is: THIRTY FIVE THOUSAND DOLLARS ($35,000.00) t i t i a -14- Z SALES COMPARISON APPROACH (continued) i STATISTICAL ANALYSIS OFi COMPARABLE:BUILDING SATES UNADJUSTED PRICES Sample Size Five Mean $40,740 Range $17,000 to Median $46,000 $54,200 Most Similar Standard $15,175 Comparable Two and Five Deviation ADJUSTED; PRICES Sample Size Five Mean $29,977 Range $12,515 to Median $36,005 $45,265 Most Similar Two and Five Standard $12,990 Comparable Deviation VALUE CONCLUSION $35,000 -15- ADJUSTMEN � „r T ID NUMBER ONE T786 Bit BC9C Lb�IPxujiALA no 1 CgtO?ARl►tSi.Et fTb.. 2: lb►� Hb 3 419 69th Avenue N. 6839 Colfax Ave. N. 907 57th Avenue North, 5301 James Ave. N. 7WPR�sS.,' Brooklyn Center Brooklyn Center Brooklyn Center Brooklyn Center :. 4 blocks west 1.5 miles south 1.5 miles south frA3S' NA 1'RSCE . :::: :: ::.:.•.. :•::::: ;: ;::.>:.....:... ...... - •:::.::::: ,.,:::::a::.:::; � :... ::: 51 5 00 >::::::::: •>::::;:i::: ':::::::;: ': is >:;.:::::. ::::•:::.::..: �::::. � ;:>: %:•:;:;:;:::;:>:;.;;;.: _ ....... .............................._ :::::.....:.:::•: :::.::::.............:...:..... $ i $17 0 00 :; : o->;:;:::;::;::: ::.:....... : :: :: : : : ::::::.o-:::: $54 2 00 [205 ... NA $58.32 per s per S.F. ;:<: ? > ?E:;::'s; >::;: Ez?>; 20.23 per s.f. :'< ^ ? ?ii?i;::i;•::.:.....': 55.31 .f. P $ P $ P inspection /MLS MLS /Driveby MLS /Driveby MLS /Driveby r: '.,;....... : : : : : :.. Y11ZU1S :kU,7US _ ..........:.............::.:::...::::::::.:::..:::::::::: . .:::::::: ::::::�.....:.:................ ( ) $ :::.::::::::::.. l ) $ ::::...tsaxg3gp.:::.::::.:::. ( ) $ ust :::::::::; ':. >:::;:::: ?::::;:::;:i:'S::': Ad meat :.':::::';: 7 ::::>:>::::;;:;:::::;;::::;:;. Ad >:::;•;.:: t : •......... Ad ustment 1'iN3NG AD31?Si FHA /$515 in points (515) Special Financing -CE 0 Assumption 0 7 -19 -92 2 -11 -92 0 8 -30 -91 0 3 -1 -92 0 X.Q A QIi: Suburban Similar 0 Similar 0 Similar 0 SK)Y�gf 18,450 s.f. /Average 10,374 a.f. /inferior 2,500 13,500 s.f. /inferior 2,500 5,950 s.f. /inferior 4,000 DESx6l� 1►P#'►L <_ 1.0 Story /Fair Superior (3,500) Similar 0 Superior (2,000) i"STg QfIA'LZTF Average Similar 0 Similar 0 Similar 0 aC8 1942 1926 1,500 1915 2,500 1941 0 C'1XQ2T Poor Superior (11,000) Similar 0 Superior (7,000) 11Vt� GkXT> Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths Total Bdrms Baths 6 3 1.0 6 3 1 4 1 1 2,000 6 3 1 CRO¢S ----.. _ 851 s.f. 883 s.f. (480) 840 s.f. 0 980 s.f. (1,935) ................ ............................... 3tlM?)tS:' "` None None 0 Part /unfin (3,000) Partial (3,000) ;: Fair Superior (1,000) Similar 0 Similar 0 H . TC)LbjG GFA /none GFA 0 Gravity gas /none 1,000 GFA 0 . ................ ............................... ................. ............................... ................ ............................... CAS #Cala70BK!>;>E,:`' None 2 car detached (3,000) 1 car detached (1,000) 2 car detached (2,000) PDRCBES�: #ll2YQ> None None 0 Enclosed porch (1,000) Similar 0 0 None 0 None 0 None 0 .............. ............................... ................ ............................... 0 0 0 Minna - ::.3iif`::i s;:• �'; i;; is '' >' ?E�:Et�i;f;�i;?i: %?` ?;i�;i: $15,495 Plus $3,000 Minus $11,935 X;til> < asisi%'i ... ....::: ••:::::::: : .� . :�: . .: : :: •::::::::::.'.: 20 000 ;;;;;;;:;:;::•:`'• �:::.:.:.::: �:::::.::.:: , ..:..: $42,265 ...:: :::::: :................ ..... $36,005 :, �:::::•::::::.. �:::.: �.: �: :::.:..;.;.. >,:.::�::.:::::.... $ • ;::.>:::::.<::..... AD TMENT GRID NUMBER TWO sm�rxcr .. c a�siAr ,to CQMPAZA81.N fop 5 419 69th Avenue N. 7235 Noble Ave. N. 5518 Dupont Avenue North, KSS: Brooklyn Center Brooklyn Center Brooklyn Center s>:E`<':: "<: ^:`:`• 2.5 miles west 2 blocks NW S NA ...:::: 000 ;::::': ::; :;:::::::: %.':::::.•:::':i:':;: $ 35 r $46,000 !RGRt4S : i i*Nii NA ' 3;;ii $24.14 per S.F. ... .. :... P ....::..: ; $79.86 per s.f. A)1d.`.5(?17RG Inspection MLS /Driveby HlS /Driveby ...... .. .........:::.. . 11a0 A.711S '�. �S°I3C%'Xp�'i KR ;::.>:.:>: >:>•:::..:.::.:::.>:: ,Lp t 1.. :.....::::;:o- > a` - ..is %4ii ::::Ci .. i %iii Adjustment `: . <'. i:; ;5: :``Sf;c >I:: Si Adjustment stmen t � ' ii:% i> �ii� :::;.�;:�; >;�: ;;::�.r :o�o::r:. :::•:;:::5:!i.`; %::::�:: ?i" Ad' � t 11!?.7tSSTw Special 0 VA No oints p 0 Ox 'iS1kTfA!#I� 7 -19 -92 3 -15 -92 0 9 -25 -91 0 ............................ . xi0IU1� Suburban Similar 0 Similar 0 &l7iIFRf� 18,450 a.f. /Average 31,800 s.f. /superior (4,000) 10,125 a.f. /inferior 2,500 =GK 7�#R4u ;r 1.0 Story /Fair Superior (2,000) Superior (2,000) i:t3N5fPfi �[faYTY Average Similar 0 Brick /Superior - (2,000 CGS 1942 1920 1,500 1949 0 D OW = Poor superior (3,000) Superior (9,000) Total Bdrms Baths Total Bdrms Baths Total Bdrme Bathe 6 3 1.0 6 2 1 3 1 1 2,000 851 s.f. 1,450 s.f. 8 985 576 s.f. ( r ) 4,125 ;; None Full some finish (4,000) None 0 Fair Similar 0 Similar 0 GFA /none GFA 0 GFA 0 RjA#?Oi!<'' None 2 car detached 2 000 ( , ) 1 car detached (1,000) None None 0 One (1,500) $'.S'`:ii3`: 0 None 0 None ................_.. :..:........:,...:.::.:: .................. ............................... Ql:::::'i ::::':: 0 0 Mi nue $22,485 Minus $6,875 - ...... ............ `. ° . Ci;c ":; ? I. . ............. ;; 5 ?E 'i % ?i ;< ? i s . E : > >Ci'S;i''.: ..:......:::.... .:............................. ........................................:.::::•;: ;;:;:.;::;:;:;:;:o:;:n:;:o:;::. <::;.:;:: ........................... $12,515 a: >:..;:.;;:;:> o: $ 39,225 COMPARABLE SALE NUMBER ONE i 3 F i - I 3 LOCATION: 6839 Colfax Avenue North, Brooklyn Center SALE PRICE: $51,500 SALE DATE: 2 -11 -92 _ TERMS: FHA, one seller paid point SITE: 78 x 133 3 { UTILITIES: City sewer and water ZONING: Residential BUILDING: 3 BR /1 Bath; One Story; no basement YEAR BUILT: 1926 SIZE: 883 square feet GARAGE: Two car detached i CONDITION: Good REMARKS: Located 4 blocks west of subject; updated cosmetics; new plumbing, cabinetry, etc.; 12 days market time. i p -18- COMPARABLE SALE NUMBER TWO k X t LOCATION: 907 57th Avenue North, Brooklyn Center SALE PRICE: $17,000 SALE DATE: 8 -30 -91 TERMS: Other SITE: 100 x 135 UTILITIES: City sewer and water g ZONING: Residential BUILDING: 1 BR /1 Bath; One Story; Part Basement; attic YEAR BUILT: 1915 SIZE: 840 square feet GARAGE: One car detached CONDITION: Poor REMARKS: Located 1.5 miles south of subject; sold in "as is" condition; n, on market 64 days -19- COMPARABLE SALE NUMBER THREE d � +t� t 3 LOCATION: 5301 James Avenue North, Brooklyn Center SALE PRICE: $54,200 SALE DATE: 3 -1 -92 TERMS: Assumption, no seller paid points SITE: 50 x 119 UTILITIES: City sewer and water ZONING: Residential BUILDING: 3 BR /1 Bath; One Story; Partial Basement 3 YEAR BUILT: 1941 SIZE: 980 square feet GARAGE: Two car attached CONDITION: Average REMARKS: Located 1.5 miles south of subject; Newer furnace with } CAC; 51 days on the market; breezeway. -20- COMPARABLE SALE NUMBER FOUR 1 t ■ i . LOCATION: 7235 Noble Avenue North, Brooklyn Center SALE PRICE: $35,000 SALE DATE: 3 -15 -92 TERMS: Special Financing, CE SITE: 100 x 318 UTILITIES: City sewer and water ZONING: Residential BUILDING: 2 BR /1 Bath; 1.5 Story; Full Basement YEAR BUILT: 1920 SIZE: 936 square feet first floor; 514 square feet in expansion area GARAGE: Two car detached CONDITION: Fair; Bank Foreclosure REMARKS: Located 2.5 miles west of subject; 76 days on the market. Newer roof. 322 square feet of finished area in the basement. -21- COMPARABLE SALE NUMBER FIVE T 1 LOCATION: 5518 Dupont Avenue North, Brooklyn Center SALE PRICE: $46,000 SALE DATE: 9 -25 -91 TERMS: VA; no seller paid points SITE: 75 x 135 UTILITIES: City sewer and water ZONING: Residential BUILDING: 1 BR /1 Bath; One Story; No Basement YEAR BUILT: 1949 SIZE: 576 square feet GARAGE: One car detached CONDITION: Average REMARKS: Located 1.5 miles south of subject; Brick veneer exterior; 119 days on the market. -22- 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 Section 12, Page 12 Class D, Fair Single Family Residence Basic Unit Cost 34.68 Square Foot Refinements Cold Climate /GFA + .90 Total $ 35.58 Size Refinements Floor Area /Shape 1.063 Temporal & Locational Multipliers Current Cost Multipliers Central USA, Class D, Section 12 1.04 Local Multiplier 1.14 Application $ 35.58 x 1.063 x 1.04 x 1.14 = $44.84/S.F. The building contains 851 square feet of area. Application of the square footage via the calculator method of Marshall Valuation Service is: 851 square feet at $44.84 /sq.ft. _ $38,159 -23- s 7' COST APPROACH TO VALUE (continued) Total Estimated Replacement Cost Total Construction Costs $38,159 Estimated Accrued Depreciation Physical 60% Functional 15% Economic 0% Total 75% (28,619) i Depreciated Cost Estimate $ 9,540 Depreciated Value of Site Improvements $ 1,500 Landscaping Land Valuation $21,000 V � Total Value Estimate $ 32,040 i SAY $ 32,000 f -24- 3 RECONCILIATION AND VALUE CONCLUSIONS a� The value estimate developed by the applicable approaches: Estimate of Value - Income Approach NA Estimate of Value - Cost Approach $ 32,000 '9 Estimate of Value - Market Approach $ 35,000 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 July 19, 1992 is: THIRTY FOUR THOUSAND DOLLARS ($34,000) • -25- : APPRAISAL QUALIFICATIONS OF J. SCOTT RENNE, MAI, CAE WORK EXPERIENCE: 1978 - Present - Independent Fee Appraiser /Consultant /Realtor on a part time basis 3 1988 - Present - Washington County Assessor, Stillwater, MN 1981 - 1988 - City Clerk /Assessor, City of Hopkins, MN 1978 - 1981 - Assistant Assessor, City of Hopkins, MN 1974 - 1978 - Property Appraiser, City of St. Louis Park, MN 1973 - 1974 - Property Assessment Specialist, Wisconsin Department of Revenue, Madison, Wisconsin EDUCATION: Graduated from the University of Minnesota School of Business Administration in 1973 with a Bachelor of Science Degree in Business Administration. REAL ESTATE EDUCATION: AIREA Courses - Urban Properties; Real Estate Investment Analysis; Litigation Valuation; Industrial Valuation; Market Analysis; Highest and Best st Use• Business Valuation; Hotel Valuation; Standards of Professional Practice. IAAO Courses - Appraisal of Income Producing Property; Techniques of Mass Appraisal; Assessment Administration; Instructor Workshops; Computer Assisted Mass Appraisal. SREA Courses - Introduction to Appraising Real Property; Principles of Income Property Appraising; Narrative Report Writing. University of Minnesota Continuing Education Courses - Computer Aided Assessment; Narrative Report Writing; Residential Appraisal; Apartment Appraisal; Assessment Laws; History and Procedures; Property Valuation Short Courses; Business Site Selection and Analysis. .. PROFESSIONAL DESIGNATIONS: Member, Appraisal Institute; Senior Accredited Minnesota Assessor; Certified Assessment Evaluator; Residential Evaluation Specialist. i -26- QUALIFICATIONS OF J. SCOTT RENNE (continued) PROFESSIONAL AWARDS: 1984 IAAO Member of the Year; 1984 Top Pen Award for best selected article in "Equal Eyes "; Primary author and coordinator of "Property Assessment" slide presentation, winner of 1985 IAAO Public Information Award; 1989 and 1990 IAAO Presidential Citations. REAL ESTATE EDUCATOR EXPERIENCE: Developed and taught courses and seminars for the University of Minnesota, International Association of Assessin g Officers Minnesota Association of Assessing Officers, Minnesota School of Real Estate, and ProSource Educational Services. CURRENT PROFESSIONAL ACTIVITIES: a IAAO Executive Board; IAAO Narrative Report Grading Committee; State Board of Assessors Narrative Report Grading Committee; Author of "Real Estate Financial Indicators" column in "Equal Eyes "; IAAO Property Appraisal and Assessment Administration Global Editor; Greater Minnesota Chapter of Appraisal Institute Board of Directors; AIREA Regional Ethics and Counseling Panel; Board of Directors, Minnesota Association of Professional Appraisers. PROFESSIONAL MEMBERSHIPS: Minnesota Association of Assessing Officers; Minnesota Chapter of International Association ciation o f Assessing Officer; International Association of Assessing Officers; Appraisal Institute; Citizen's League; International R' g ► 1 i ht o Way a Association Minneapolis olis Boar d Right Y P _ of Realtors; Minnesota Association of Realtors; National Association of Realtors. CLIENTS SERVED: Attorneys, Lenders, Developers, Governmental Agencies, Private Individuals and Corporations. Qualified as an Expert Witness in Minnesota Tax Court, District x Court and Condemnation Commissioners' Hearings Licensed Minnesota Real Estate Broker #07545920. - Licensed Real Estate Appraiser #4000733, Federal Certified General level -27- _ QUALIFICATIONS OF MARRI P. KUNIK Appraisal Education Society of Real Estate Appraiser's Course 101, Introduction to Appraising e PP g Real Property, 1985 P Y Appraisal Institute Capitalization Techniques Week A August, P 4 , 1992 International Association of Assessing Officers: Course 2, Income Approach to Valuation Course 4, Assessment Administration Course 302, Mass Appraisal of Income Producing Property Course 305, CAMA Applications Minnesota Assessing Education: Course A Assessment History Course H, Mass Appraisal Various seminars given by the IAAO, Appraisal Institute, MAAO, NCRAAO Professional Affiliations /Designations: CAE designation of the International Association of Assessing Officers and membership in the same organization. Within the IAAO I am active as a grader of residential demonstration appraisals that have been completed by current candidates working towards the RES and CAE designations. SAMA designation of the Minnesota State Board of Assessors. Membership in Minnesota Association of Assessing Officers. Candidate member for the Appraisal Institute. Appraising and Assessing Licenses: Federal Certified General License #4002600 State of Minnesota Assessing License #1497 Education 112/180 credits completed toward Finance degree at the University of Minnesota, Carlson School of Management (am currently enrolled). -28- y CONTINGENT AND LIMITING 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 a 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. i 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. 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. • -29- t a CONTINGENT AND LIMITING CONDITIONS (continued) 15. The distribution of the total valuation in this report between land and 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 p 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 statues 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. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. 21. 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. 22. 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 in the report. 23. 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. ) f ) -30- ADDENDA I i I .. 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O A21r R21 ) L7tn L1. x, lr N) • �.' Ktn OL14. [T rn Iv AVE. 36131 �i - lr � � ID jy � [7f � � / FA AVE. tt 60N2R24* R6 fn i j F +Qpj yy 6Gth LA. 95th La. N.V. ) w u 3 b 1 ✓ v est AVE. $ 2 X3333 t^ T esr AV .v E. N.E. ra- Ladd(e T NE OR AM IN D T31N R21r DR' a a • ^ 7 36 LI1N0 AVE N2. d- ° u LA4t If RI R[ ) � `I jZj s 64tH o t 4 'i d rEA. a avE. N.E. 13OR R249 ' .� IOhf AVE. N.E. Qp u W O $ d H 0 7 ' Ix� Dlrtl AVE. 83rd AvE. 83rd AVE. -1 �d ■ p7 yrG,S Nt• pDN Si. N.E. y N �^ n NO lLA �T' Q 6 AV, i AR D X 62nd RICO L A, AYE g M! 3PRINd, ir} v J _� DALLANTrNE PARg PO sir AK ' 8artn t AyA AK?At i s �61et ►vE. N.E. It. St. cmEL I a J 1980 POP. 6177 S g �. Mrn 0 0 L76FArr WILD n gist AVE. M1 17 tr L w F £ •o b I a rrtD- • �� \ °`r Su e LOKAE ua g' � Q $ »' A R000 u, J 3AT dS = ROS[ W LE q). I > tOtn K. Tf s dd 4y, r9m c'S Q 79tH S 7 . I/rt 7� 'L W �'' ?•� i = X N VtSt AvE.� HF, 7 i �`z lA[EViER 7Etn ,H„ � aV � RALE fOrf � " rl rn . $pr( 1 g 0.1[ to Is rn rA. N - �Q` Ittn AVE. > DR .. t � 1 �Y}• 5 cA I 76m Avt.11 � T K v 7 \ � 100' y tlooA al. _ 1 : p Q 6 N!t�S. Rq, Lr.. •" Troller 1Yd AYE, f Rl �aRD r .n = 76th CoUrt o �, ¢ ■ •_. PEARSON Pt■T. RIVER LANE ' 75tH '1, 1 1 W I • £ Tsth t Dp � /Stn 9 16rn AvE.a yl � r 1 I m Z 6 2r4 AVE. K •• CT• CY. 1 Sl"1sT PR n. 73 o , l0 t LA. AYE. > EIRESID DR. 3 3 3 [lA♦ AvE. a j V� c.�r„' a g 8 k woN.co st. ' 9•.AONt T r. �(, LrlAl C x� G L.GtA �' 3' d �' JS W I 73' /r AYE. 77 Y .�� o `kZ ow l. nr., u 63ER7 0 [otlAlr DE CtR. a M; W ,+* , 73rd a 8500 AYE. [ N.E. 1 r91 L •• A BRQO LY r R• r FRIDLEY 72nd Av[. ✓� 1980 POP. 3022? )s Y o PA Li o Iter r N .(r i I NOgfON AY O R21R N 3■ C MO W 0 g B J/ l la PCP. 3 2 Ilt AVE. N E. 1rFQ1 ✓ f ® 37 211 Z $ a 2 ;KE R . iDrn M 1 7116 : LAKE �. Rrq �' 3 nrn A j or 610% DAL[ 7rL N M Ry \ SPRING rift L Gtm AK. \ E CREE[ 49th 4YE. N.E. 2 fy E2 H t 2• N• 6'� P ^` `trY N,t• PANpORA R I r^ 4i COUN A .At l is d' P tt 66 fh AV N 66 ih vuDO..dDt �. "n OvERiON S J W - r ; t/1A Ar[.• lM. IK AYL r. rA � , � TER. (I fnN `,f't AENNIS 7p qP � CHA.k, AVE. N,E h ya cP' 0 66tH = ` i5 CreRk tEP - � � r/tn 1} � AvG j � ICE Es k� i RICE .l► � � v. N T tsrt "' W g 67rn to > 66Yr 4 RICE t y 2' rYt it par rAr 6 s,Gm t/r '^ .n >r G� : GTt f ^ AVE. .. tYt AYL AL + O •' l� • 66 to AV C p .000 OrNE LA. 66en u % • = p 67rn Krn� .vE. y j [LOVER O �tP W w 66 ♦n r . ', , [t. Ft 7ER i t� 4r ' k !0200 14300 Mississippi 6 o • cnt..•�'' 66 rn 4 � t E i ALORILM < 1 ■ R/ f - Cr. T2hd AV �g u GR'Il L;J i d � lI n r4 BE—TT DR, t sr. L•. , OR LA, ►�` ` >R!' rAr Q• 1111 tOEq VIES i '• G 72 ^d a YT AV 3TlYAR A �( u r 64th AYE. S DIL A St, rl ��. 1 y{' = j � a JI tom' � O t g i a E RICE 6 t c (PEE ` LA. G=,1. G214 F [0 1Ki II ` `5 3 D 67rtl tAr 9 +h AVE. N.- RIVERE . �' £ u R. e - t Opt ¢¢ 000 SIDE Ci II a > 232 r r A. Irr .. SZ : $ YE I11Rp -9 W � Aj LA 6 C` ur AVE. N.E. i� IS y � CRS 61 a V IDtn Sl r IMOnd • AL D(N RA• Irn V`. a pert 1 1 60 th = AVE. `� .p 7Efn/7wlE r � 7 y D O S , 1 r V� ^y 6rO0kir DUAL S 57. H Moore �` nIILCRESi 60tH 7tH 1 :. POrkl 59h K. > 59 to Lake �' g AVE. A�r. tN 1Ltn f R. u 66tH K .( a 59 ih i GAROENA n AVE. 16,0 1•h AVE 1 S$ AAi k 5111 h F Y MAR 56 rn AYE. i Y Y / 7 s7 rn PL N[LE NE I[ 75 XQ 44 fh AVE. s C E I / / j 4 slim AVE. 97th"' HAINArAr t A, a.. g i 7 uIAM 14t r d r3rn r C4ApE A. f RAZE LA. IARS woo N u noAV. 1 3 y 7cgj�q !ern st, s• L ; vi s4t !I AVE E p VENTUrA [Y' �y F CH[Rl la. \ rlilL YIDOt SITYN / C1, 'P RD. 2, r100a txa L.. 61 M a a AV j0. HOR120R LSR. NQ h . N.. 7 nrs6RUCA Cr, i Ci,K c 1 y 7[ _ ✓ (� 5 3" r4 r tY , CR01 p0• 57 %1 A 9 SYrrOOD LA. N.E. n I ] to ■ ` 7 Slr AvC.� N.E. _ g �l . 53rd 1 � a CAPITA Si. q £ E T C t� amm Sf.((r von .7 ` • - R NR000 DR 52nd *At / L.e4t 52730 d `fj•� cIR.L b t �cH [ - ;�. . C. CIA. t # tItAAA DVyrW■1Rt.000prRlll1171t76 , Traffic"Volume Map Plat Map ,zo; 1 33 OCC NO 4898654 ' DOC NO 1898653 I •47 - -.IO - --�---- - - - --- � 1 ........ 711. SI ......... ;� ......• 1 NO 13 9 PLAT 27) N89'35'27•E 69TH AVE N 746.68 ......... I F ,DD DOC 1 4... .... ..75_. .... . NO 4920359 I f ;iL_.S.i (72) DOC NO 4948892 (33) ------------------ DOC No 4885230 1 , 1 29 28 PART OF;LOT 27 (37) (36) P; 3 , 1 (31) ; (73) 1 25 1 7 75. Z+ ^ ' DOC NO 4904324 Ln I 1 0 O _ (32) N 1 1 1 1 I I 1 1 _------------------------------------------ _ .80. 31 1 I � 1 1 7.R , (30) I I 4 I COC NO 4880628 1 1 ----------------------- -- -- --- --------- --- -- ---- -1 -- , I 25 (29) 1 ' -- 1 1 DOC NO 4898657 1 -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ----- ---- --------- - ---1 �- I I PARCEL 17 I I 24 , 1 (28) > 1 1 I 1 422.24 ......... DOC NO 5062T37 I 68TH AVE N I 1 193, 38 N 1 1 OI 08 90 i , 1 , 1 '30 30 A® A (23) N (24) - 1 I 1 3 0 2 DOC NO 4915652 I ui - (4 1) + (40) PART OF LOT 23 - � i3 5887 �----••--- •--- -J----I 130 a (C ADD 89.96 90.02 Mu F..i• G Inc TJCn.vnGe.� .i� Binding Sketch a 3 S 3 46 12.5 One story wood frame single family residence 20.5 no basement 8 34.5 s i a Address: 419 69th Ave. No. Brooklyn Center i 1 FUNCTION? PFL PRINT FULL LISTINGS LISTING NUMBER(S)? 713591 07/23/92 19:26:10 <<< L-$39,90() S- > ;,;> BR 2 TBA: I FBT: I TBT: 0 HBT: 0 STL: RAMBLE FIN- INFORMATION DEEMED RELIABLE BUT NOT GUARANTEED 419 69TH AVE NO TAX $534 /92/F MAP 2D-10 MUN BROOKLYN CENTER ZIP 55430' TWA $534 AR 571 SUB 3 DIV 3 COU HENN ASB$O ASP N N LOT 75X242 ACR o HS FOR 1993/ F YBL 1942-N DIR HUMBOLDT TO 69TFI AVE NO EAST TO HOME #713591 LARGE LOT W/ MATURE TREES, QUIET NEIGHBORHOOD & LOW TRAFFIC. SELLER WILL CARRY CONTRACT FOR DEED 15% DOWN 9.5 INTEREST 7 YEARS, FOR BUYER THAT MEETS SELLERS APPROVAL. PRICED BELOW, ASSESSORS VALUE. HOME NEEDS TLC. LGL LONG LEGAL PID 3611921120033 WAT CONNECT REF,RNG L APROX L APROX SEW CONNECT MPH.WSH,DRY,SUN LR M 19X11 19 M 7X12 FF 'L AIRN TRM C/D DR 29 M 7X12 HEA FA /GAS MTG INT 0 % FR 3B EXT SHA EXF CLR ODO ASM N KT M 12X9 49 BSM N PIN $ o 2MC N 2MA N GAR 0 NA SR M iiXil BBT N MBT N NA SDN 286 SDP 561-2120 FSZ 780 AGF 780 BGF FSF 780 AGN IRV BRODY 588-6158 99 Y-3.15 SA 3.15 ER OFFICE VALLEY WEST REALTY L05432 PH 544-5060 APT 544-5060 LISTING NUMBER(S)? MLS DATA CITY OF BROOKLYN CENTER Council Meeting Date August l 1992 Agenda Item Number 4 5 � REQUEST FOR COUNCIL CONSIDERATION ITEM DESCRIPTION: RESOLUTION ACCEPTING PROPOSAL FROM THOMPSON ASSOCIATES, INC., TO PROVIDE PROFESSIONAL SERVICES FOR A RENTAL TO OWNER CONVERSION PROGRAM DEPT. APPROVAL: Tom Bublitz, Assistant EDA Coordinator MANAGER'S REVIEW/RECOAEMENDATION: • No comments to supplement this report . Comments below /attached SUM MLARY EXPLANATION: (supplemental sheets attached Yes At its July 27, 1992 meeting, the EDA board reviewed and discussed the proposal from Thompson Associates, Inc., for a single - family rental to owner conversion program. The EDA board passed a motion accepting the proposal from Thompson Associates, Inc., and directing staff to prepare the necessary documents to execute the contract. The purpose of the program is to convert single - family rental property to owner- occupied property. The goals of the program are to improve the maintenance of single - family homes which have experienced deferred maintenance because of reduced profitability of rental property and to assure quality property owners occupy and maintain the homes. The proposal from Thompson Associates, Inc., reflects a focused, concentrated effort to begin marketing the single - family rental properties, initially, in a portion of the City's southeast neighborhood. The specific area identified as the Identified Treatment Area (ITA) consists of an area bounded by 57th Avenue on the north, 53rd Avenue on the south, Logan Avenue on the west and the Mississippi River on the east. The resolution presented this evening authorizes the EDA President and Executive Director to • execute the contract with Thompson Associates, Inc., and also authorizes the transfer of funds from the EDA contingency account to the EDA professional services account to provide funds for the proposal. � Staff recommends apprortd of the r te. ,t is k. 1 r di. c � k n� fry t x y 6 � 7 + v � k w� t F p y. THOMPSON ASSOCIATES INC. Iris Park Place 1885 University Avenue Saint Paul, Minnesota 55104 (612) 644 -2710, FAX (612) 644 -3282 BROOKLYN CENTER PROPOSAL July 1, 1992 Development and successful implementation of a housing program with a primary focus on conversion of absentee -owned property in the City of Brooklyn Center will require a variety of components to provide a holistic approach to revitalization and increased homeownership in the City. These various components nts will require quire input and participation from many people, organizations and agencies working in and around the City of Brooklyn Center. Early communication with these entities will foster a greater degree of ownership and participation in the program, which is imperative for success. 1. DEVELOPMENT OF THE PROGRAM AND SOURCES OF FUNDS Thompson Associates will negotiate modifications to existing housing program guidelines when creativity and flexibility is required to meet the needs of the community. Where needs are not met with existing programs, Thompson Associates will develop additional programs and seek sources of funds. Efforts will include working with Minnesota Housing Finance Agency, the Department of Housing and Urban Development and private sources. The purpose is to provide a variety of options for mortgage financing, mortgage financing enhancements (Equity Participation Loans, Graduated Payment Loans, Closing Cost Loans, Downpayment Grants, etc.), and rehabilitation loans and grants. Since some of the absentee -owned properties may require varying degrees of improvement, an important program for homebuyers to access will be one consolidated loan for acquisition and rehabilitation of a home. Estimated Time: 80 hours Page 2 2. PUBLICITY TO IMPROVE PERCEPTION AND CREATE INTEREST Thompson Associates will work with the Star Tribune and community newspapers to create and write feature stories which will "spotlight" Y the City's focus on converting absentee -owned properties to owner - occupied housing. t the Stories may include substantial rehab efforts on art h Y P of individual homeowners, the comprehensive housing program offered in the Identified Treatment Area in the southeast corner of the City and other major efforts that may positively affect perception or interest. This endeavor will complement current city staff efforts with the Chamber of Commerce and other local institutions. This should be viewed as an effort to market the Brooklyn Center community and to instill a renewed sense of pride and interest by residents. Estimated Time: 8 hours 3. PREPARE COLLATERAL MATERIAL Thompson Associates will prepare material for a marketing brochure including logo development. Brochures will emphasize Brooklyn Center's focus on owner - occupied housing. Also included will be information on various programs available to potential homebuyers and existing homeowners, eligibility guidelines and the contact person(s). Estimated Time: 15 hours Estimated Material Cost: $1200 (4,000 brochures) 4. COORDINATION OF EFFORTS Thompson Associates will work with Minneapolis officials to coordinate similar program efforts in the area immediately adjacent to Brooklyn Center's Identified Treatment Area (ITA). This cooperative effort will create more interest and have a greater visual impact. In addition, it will be of great importance to communicate with local real estate offices, the Minneapolis Board of Page 3 Realtors, churches, day care centers, educational facilities, area businesses and local lenders advising them of the housing /community effort and asking for input, support and participation. Estimated Time: 20 hours 5. PROVIDE LANDLORD EDUCATION Thompson Associates will provide information /education to landlords of ITA properties which include 8 or fewer units. The primary focus will be absentee -owned single family and duplex properties. With the City's goal of increasing owner - occupancy, emphasis will be placed on marketing smaller buildings. For landlords who wish to continue renting their properties, information will include selection of tenants, how to maintain and manage the rental property and how to deal with problem tenants. The emphasis will be on improving the community as a whole and how additional efforts will result in a win /win situation. Estimated Time: 10 hours 6. PROVIDE TENANT EDUCATION Thompson Associates will conduct an informational seminar which will include an overview of the requirements for homeownership with emphasis on income, credit history, ability to maintain property and downpayment requirements. A subsequent one -on -one pre- screening session with interested ITA tenants will entail a more in depth review of the tenant's income and credit situation and a determination of their affordability range. Those tenants who appear to be in a position to purchase a home will be referred to a real estate agent for assistance. Those tenants who have obstacles or barriers preventing them from homeownership will be assisted in working out a plan to get them to a point where they can qualify for a mortgage. Estimated Time: 22 hours 0 Page 4 COMPENSATION Basic services include development of a program description and model plan as outlined in this proposal. The cost is indicated as a maximum not -to- exceed amount, thus the City of Brooklyn Center will know up -front the maximum costs. MAXIMUM NOT -TO- EXCEED FEES FOR DEVELOPMENT AND MARKETING OF THE PROGRAM 155 hours at $80.00 per hour $12,400.00 Estimated Cost for Collateral Material 1,200.00 Victoria M. Murray, Director of Marketing will be the primary contact for Brooklyn Center. Thompson Associates does not bill expenses such as transportation, copying, facsimile services or postage. Page 5 The City of Brooklyn Center and Thompson Associates, Inc., have agreed to the attached Proposal dated July 1, 1992. Development and implementation of the housing program will be concentrated initially in the area bounded by 57th Avenue, 53rd Avenue, Logan Avenue and the Mississippi River. The City of Brooklyn Center will advise Thompson Associates, Inc., if and when it chooses to expand the identified area. Thompson Associates, Inc., will submit monthly invoices for payment based upon time and /or collateral expenditures. ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF BROOKLYN CENTER BY: ITS: President DATED: BY: ITS: Executive Director DATED: THOMPSON ASSOCIATES, INC. BY: ITS: DATED: �U Commissioner introduced the following resolution and moved its adoption: EDA RESOLUTION NO. RESOLUTION ACCEPTING PROPOSAL FROM THOMPSON ASSOCIATES, INC., TO PROVIDE PROFESSIONAL SERVICES FOR A RENTAL TO OWNER CONVERSION PROGRAM WHEREAS, the 1992 EDA and HRA budget has appropriated funds for a Rental to Owner Conversion Program to provide funding to encourage the conversion of single - family rental and nonhomestead properties to owner - occupied properties; and WHEREAS, the EDA staff has received a proposal from Thompson Associates, Inc., to assist in the design and implementation of the Rental to Owner Conversion Program; and WHEREAS, at the July 27, 1992 EDA meeting, the EDA board approved a motion accepting the proposal from Thompson Associates, Inc., in the amount of $13,600.00 for the design and implementation of the Rental to Owner Conversion Program and directing staff to prepare a resolution accepting the proposal. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of Brooklyn Center, Minnesota that: 1. The proposal submitted by Thompson Associates, f Inc., to provide professional services for the design and implementation of the Rental to Owner Conversion Program is hereby accepted and approved. The President and Executive Director are hereby authorized and directed to execute a contract with said firm on the basis of said proposal. 2. Staff is hereby directed to transfer $13,600.00 from the 1992 EDA contingency account g y cco nt number 4995 to EDA professional services account number 4310 to provide funding for the proposal from Thompson Associates, Inc. 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.