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HomeMy WebLinkAbout1991 03-11 EDAP Regular Session EDA AGENDA CITY OF BROOKLYN CENTER MARCH 11, 1991 (following adjournment of City Council meeting) 1. Call to Order 2. Roll Call 3. Approval of Minutes: a. January 2, 1991 - Special Session b. February 12, 1991 - Special Session 4. Discussion Item: a. Consideration of Acquisition of the Single- Family Property Located at 5538 Colfax Avenue North 5. Adjournment MINUTES OF THE PROCEEDINGS OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA SPECIAL SESSION JANUARY 2, 1991 CITY HALL CALL TO ORDER The Brooklyn Center Economic Development Authority met in special session and was called to order by President Todd Paulson at 9:21 p.m. ROLL CALL President Todd Paulson, Commissioners Celia Scott, Jerry Pedlar, and Dave Rosene. Also present were EDA Director Gerald Splinter, Finance Director Paul Holmlund, City Attorney Charlie LeFevere, EDA Coordinator Brad Hoffman, Fire Chief Ron Boman, and Deputy City Clerk Patti Page. APPROVAL OF MINUTES - DECEMBER 18 1990 - SPECIAL SESSION There was a motion by Commissioner Scott and seconded by Commissioner Pedlar to approve the minutes of the December 18, 1990, EDA meeting. The motion passed unanimously. APPROVAL OF MINUTES - DECEMBER 18 1990 - SPECIAL SESSION - HRA There was a motion by Commissioner Pedlar and seconded by Commissioner Scott to approve the minutes of the December 18, 1990, HRA meeting. The motion passed unanimously. DISCUSSION ITEM ESTABLISHING THE BUDGET FOR TENANT IMPROVEMENTS TO D BARN AND AUTHORIZING THE TAKING OF QUOTES FOR WORK The EDA Director stated the satellite dish which will be on the water 'tower is • two foot dish, and staff has been assured it will not be noticeable. There was • brief discussion regarding the clause for the right of first refusal on the G Barn lease. The EDA Coordinator stated a period of time for refusal should be added if the clause is to be left in the contract. He noted it can be removed from the lease completely. Commissioner Pedlar stated he has problems with the right of refusal and would prefer to have it removed completely. There was a motion by Commissioner Pedlar and seconded by Commissioner Scott to approve the lease with the deletion of the right of refusal clause. The motion passed unanimously. ADJOURNMENT There was a motion by Commissioner Scott and seconded by Commissioner Rosene to adjourn the meeting. The motion passed unanimously. The Brooklyn Center Economic Development Authority adjourned at 9:29 p.m. President Pro to m 1/2/91 -1- 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 FEBRUARY 12, 1991 CITY HALL CALL TO ORDER The Brooklyn Center Economic Development Authority met in special session and was called to order by President Todd Paulson at 12:11 a.m. ROLL CALL President Todd Paulson, Commissioners Jerry Pedlar, Dave Rosene, and Philip Cohen. Also present were EDA Director Gerald Splinter, Director of Public Works Sy Knapp, Finance Director Paul Holmlund, Director of Planning and Inspection Ron Warren, City Attorney Charlie LeFevere, EDA Coordinator Brad Hoffman, Assistant EDA Coordinator Tom Bublitz, City Engineer Mark Maloney, Assistant Finance Director Charlie Hansen, Personnel Coordinator Geralyn Barone, and Council Secretary Ann Odden. Commissioner Scott was absent due to illness. APPROVAL OF MINUTES NOVEMBER 19, 1990 There was a motion by Commissioner Pedlar and seconded by Commissioner Cohen for approval of the minutes of the November 19, 1990 EDA meeting. Vote: Three ayes. The motion passed. Commissioner Rosene abstained. DECEMBER 3. 1990 There was a motion by Commissioner Cohen and seconded by President Paulson for approval of the minutes of the December 3, 1990 EDA meeting. Vote: Two ayes. The motion passed. Commissioners Rosene and Pedlar abstained. JANUARY 14, 1991 There was a motion by Commissioner Pedlar and seconded by Commissioner Rosene for approval of the minutes of the January 14, 1991 EDA meeting. Vote: Three ayes. The motion passed. Commissioner Cohen abstained. 2/12/91 - 1 - RESOLUTIONS APPROVAL OF QUOTATIONS FOR TENANT IMPROVEMENTS TO THE D BARN (DAVID C. BELL LEASE) The EDA Coordinator reviewed the staff report on this item. He noted the term of the proposed lease would be five years and would result in a negative cash flow of $55,000. He indicated the tenant planned to make improvements to the structure, which would be subject to approval by the EDA. RESOLUTION NO. 91 -02 Commissioner Jerry Pedlar introduced the following resolution and moved its adoption: RESOLUTION AUTHORIZING THE SIGNING OF A LEASE FOR THE "D" BARN AT THE EARLE BROWN HERITAGE CENTER AND ACCEPTING WRITTEN QUOTATION FOR WORK The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Philip Cohen. Vote: Three ayes and one nay. The motion passed. President Paulson voted nay. RESOLUTION NO. 91 -03 Commissioner Philip Cohen introduced the following resolution and moved its adoption: RESOLUTION APPROVING A MODIFIED TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 02 The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Jerry Pedlar and the motion passed unanimously. ADJOURNMENT There was a motion by Commissioner Cohen and seconded by Commissioner Pedlar to adjourn the meeting. The motion passed unanimously. The Brooklyn Center Economic Development Authority adjourned at 12:26 a.m. President Pro tem Recorded and transcribed by: Ann J. Odden Northern Counties Secretarial Service 2/12/91 .2- CITY OF BROOKLYN CENTER Council Meeting Date 3 -11 -91 Agenda Item Number REQUEST FOR COUNCIL CONSIDERATION ITEM DESCRIPTION: Consideration of Acquisition of the Single - Family Property Located at 5538 Colfax Avenue North in Brooklyn Center. DEPT. APPROVAL: i Assistant EDA Coordinator Signature - title MANAGERS REVIEW /RECOMMENDATION: No comments to supplement this report Comments below /attached «««««««««««««««««««««««««««««««««««««««««««««««««««««« « « « « « « « « « « « « « « « « « « « « « « « « « « « « « «« SUMMARY EXPLANATION: (supplemental sheets attached Yes ) Staff is proposing the Brooklyn Center Economic Development Authority acquire the single - family property located at 5538 Colfax Avenue North and described in the appraisal report included with this request. The purpose of the acquisition would be to acquire the property, demolish the home currently occupying the lot and sell the lot for construction of a new single - family home. Proposed funding for the acquisition would be from current Community Development Block Grant (CDBG) funds. The use of CDBG funds for this acquisition would require an amendment of the City's Year XVI Community Development Block Grant Program. Since the property at 5538 Colfax is not occupied, relocation assistance is not a factor in this acquisition. The estimated cost of the acquisition including demolition, legal expenses and administration is $57,000. If the Economic Development Authority concurs with the staff proposal to acquire the property using CDBG funds, the following items would be accomplished: 1. The City Council would hold a public hearing on March 25, 1991, to consider the amendment reallocating Year XVI funds from rehabilitation to scattered site acquisition. 2. The Economic Development Authority would be required to adopt a resolution establishing an offer of just compensation for the property and to authorize City staff to make a written offer on the property. The offer of just compensation would be based on the appraisal. The only action required this evening for the project to continue is a motion from the Economic Development • Authority to direct staff to proceed with all necessary actions required to acquire the property using Community Development Block Grant funds. J. Scott Renne, MAI Real Estate Appraiser . Consultant . REALTOR S617 CHOWEN AVENUE SOUTH EOINA, MINNESOTA 55410 (612) 926-3948 rr t: 1 February 24, 1991 I Brad Hoffman EDA Coordinator City of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center, MN 55430 Subject: Market Value Appraisal on Lindbloom property. 5538 Colfax Avenue North, Brooklyn Center, Minnesota. Dear Mr. Hoffman: Pursuant to your request, I have completed a Market Value Appraisal Report on the above referenced property. The PP ose ur of the appraisal is to arrive at an estimate of P P market value of the fee simple interest of the property. Market value is defined within the definitions section of this report. The definition of market value and the other contents of the report comply with the Standards of Professional Practice of the Appraisal Foundation. This report is subject to the assumptions and limiting conditions contained herein. It is my opinion that as of February 15, 1991, the market value of the property is: FORTY FIVE THOUSAND DOLLARS ($45,000.00) This conclusion is based upon my personal inspection and review of the property, comparable sales, and application of the appraisal process. Respectfully Submitted, J. Scott Renne, MAI, CAE -I- I L MARKET VALUE APPRAISAL OF THE PROPERTY LOCATED AT 5538 COLFAX AVENUE NORTH BROOKLYN CENTER, MINNESOTA FOR BRAD HOFFMAN EDA COORDINATOR CITY OF BROOKLYN CENTER 6301 SHINGLE CREEK PARKWAY BROOKLYN CENTER MINNESOTA 55430 BY J. SCOTT RENNE, MAI r i' TABLE OF CONTENTS INTRODUCTION PAGE Letter of Transmittal .............................. I Summary of Important Facts and Conclusions ......... II Certification ............................... III Reference ........... ............................... IV Definitions ............................... V DESCRIPTION, ANALYSIS AND CONCLUSIONS Purposeof Report ... ............................... 1 Function of the Report ............................. 1 LegalDescription ..................... 1 Ownership ........... ............................... 1 SalesHistory ........ ............................... 1 RealEstate Taxes ... ............................... 1 Area Analysis ....... ............................... 2 City /Neighborhood Analysis .......................... 4 SiteAnalysis ....... ............................... 6 ImprovementsAnalysis ............................. 7 _ Highest and Best Use .............................. 8 Appraisal Methodology 9 IncomeApproach ..... ............................... 10 ComparableSales ... ............................... 11 MarketApproach ..... ............................... 14 Cost Approach ............ 15 Reconciliation and Value Conclusion ................. 16 Contingent and Limiting Conditions .................. 17 L Qualifications of J. Scott Renne, MAI, CAE 18 i TABLE OF CONTENTS continued ADDENDA Photographs ............................... PlatMap ............................................ ZoningMap ........... ............................... Building Sketch ............. ComplianceOrder ...... ............................... Transfer Disclosure Statement ....................... t s' d SUMMARY OF IMPORTANT FACTS AND CONCLUSIONS Property Appraised: Wood frame single family home with 720 square feet of area located on a 6090 square foot lot. Address: 5538 Colfax Avenue North, Brooklyn Center, Minnesota Owner: Robert Lindbloom Appraisal Date: February 15, 1991 Appraisal Purpose: Estimate fair market value of the fee simple title. Zoning: R1, Single Family Residential Highest and Best Use: Current use Estimate of Value: 45 000 $ .00 -II- i CERTIFICATION I certify that I have personally inspected the subject property. To the best of my knowledge and belief the statements contained in this report and upon which the opinions are based, are true and correct subject to the "Limiting Conditions" herein set forth; also that this report conforms with and is subject to requirements of the Code of Ethics and Standards of Professional Conduct of the American Institute of Real Estate Appraisers. Employment in and compensation for making this appraisal are in no way contingent upon the value reported. I certify that I have �J no interest, either present or contemplated, in the subject property. The American Institute of Real Estate Appraisers conducts a voluntary program of continuing education for its designated members. MAIs and RMs who meet the minimum standards of this program are awarded periodic educational certification. J. Scott Renne is certified under this program through September 15, 1993. I- I Sc,�A-T?z J. Scott Renne, MAI, CAE -III - r REFERENCES s The methods, facts and conclusions used in the preparation of this appraisal were obtained from my experience in real estate and the real estate appraisal field; discussions with lending an 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 Park, Minnesota Taxes and Special Assessments: Hennepin County Minneapolis, Minnesota Cost Approach: Marshall & Swift Publication 1617 Beverly Boulevard Los Angeles, California 90026 Market Information: Hennepin County Various Realtors Multiple Listing Service Appraisal Terms and Methodology: Appraisal of Real Estate, 9th Edition 1987 Copyright, American Institute of Real Estate j Appraisers Uniform Appraisal Standards for Federal Land Acquisitions , Intraa enc Land g Y Acquisition Conference, 1973 -IV- t 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. Fair Market Value (From UASFFLA) Fair Market Value is defined as the amount in cash, or on terms reasonably equivalent to cash, for which in probability the property will be sold be a knowledgeable owner willing but not obligated to sell to knowledgeable purchaser who desired but is not obligated to buy. In ascertaining that figure, consideration should be given to all matters that might be brought forward and reasonably be given substantial weight in bargaining by persons of ordinary prudence, but no consideration whatever should be given to matters not affecting market value. The cash, or on terms reasonably equivalent to cash, requirement is important and numerous courts have noted this factor. An alternative definition from the Dictionary of Real Estate Appraisal is, "the most probable price in cash, terms equivalent to cash, or in other precisely revealed terms, for which the appraised property will sell in a competitive market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, and for self interest, and assuming that neither is under undue stress." Fundamental assumptions and conditions presumed in this definition are: 1. Buyer and seller are motivated by self interest. y 2. Buyer and seller are well informed and are acting prudently. 3. The property is exposed for a reasonable time ime on the open market. 4. Payment is made in cash, its equivalent, or in specified financing terms. 5. Specified financing, if any, may be the financing actually in place or on terms generally available for the property type in its locale on the effective appraisal date. 6. The effect, if any, on the amount of market value of atypical financing, services, or fees, shall be clearly and precisely revealed in the appraisal report. -V- DEFINITIONS (continued) Fee Simple Estate Absolute ownership unencumbered by any other interest or estate; r subject only to the limitations of eminent domain, escheat, police power, and taxation. Easement A nonpossessing interest held by one person in land of another person whereby the 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- 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 February 15, 1991. The definitions of market value and fee simple interest are included in the definitions section of this appraisal. FUNCTION OF THE REPORT The function of this report is to serve as the basis for negotiating a purchase price by the City of Brooklyn Center's Economic Development Authority and the owner of the property. LEGAL DESCRIPTION N1 12 of w1 /2 of Lot 45, Gracleyn's Addition PID 01- 118 -21 -31 -0059 OWNERSHIP According to Heenepin County records, fee owner is Terry Charles Leslie; vendee under a contract for deed is Robert Lindbloom. SALES HISTORY According to City records, Mr. Linbloom purchased the property in December 1978 for $ 34,900. REAL ESTATE TAXES Non homestead real estate taxes payable in 1990 are $ 1467.00. -1- c 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 365,000, and St. Paul, population 220,000 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. The metro area population was estimated as 2,118,000 in 1986 which is up from 1,874,000 in 1970. This makes the area 16th in total population among US cities. Growth has been consistent and the population stable. 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 metropolitan area has a strong and well diversified industrial base. There are over 2,500 manufacturers base in the area including: - Minnesota Mining and Manufacturing - General Mills - Pillsbury - Cargill - Control Data Corporation - Northwest Airlines - Land O Lakes - Unisys - West Publishing Other major manufacturers include Ford Motors Truck Division, General Motors Parts Division, General Electric, and a cross section of many other national firms. 1 -2- 1 - AREA ANALYSIS (continued) 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 three 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. Other financial service organizations include Prudential Insurance Companies regional office, St. Paul Companies, Lutheran Brother Hood, and many other financial /insurance companies. The Twin Cities have an excellent educational system including the University of Minnesota, with enrollment of over 50,000 full > time students on four campuses. Other private colleges include McCallister 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. Downtown areas of both Minneapolis and St. Paul as well as the suburbs, specifically the southwest suburban area, have a reputation for vitality and growth. In recent years there has been extensive growth of commercial and to a lesser extent industrial property. The Central Business Districts of the Twin Cities have experienced a great deal of redevelopment.. 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. '- -3- CITY /NEIGHBORHOOD ANALYSIS Brooklyn Center is a first tier suburb located on the north side �- of Minneapolis. It was first settled in the 1850's and incorporated as a village in 1911. Brooklyn Center's residential areas are almost fully developed and its commercial industrial P commercial/ industrial which boasts a regional shopping center and a variety of commercial, technical and light manufacturing industrial uses is also well developed. Demographics for the city reveal a relatively stable population since 1970. Population estimates are: - 1960: 24,356 - 1970: 35,173 - 1980: 31 30 - 1990: 33,500 (projected) The median family income in 1983 was $27,960, which compares with the state median of $23,230 and Hennepin County's median of $31,000. Major employ in the area are. j - Brookdale shopping center employing 1700 people in a number of retail outlets - Promeon, division of Medtronics manufacturing medical components employing 450 people - Ault Inc. manufacturing electronic components and employing 270 - Hoffman Engineering manufacturing electrical enclosures and employing 175 - And a number of other manufacturing and service businesses within the area A 1983 survey of the business community indicates that out of 556 total businesses there are 148 service 122 retail 41 manufacturing, 39 medical facilities, 33 restaurants and many others. Major transportation routes in the city includes 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. -4- s CITY NEIGHBORHOOD ANALYSIS _ CITY/NEIGHBORHOOD (continued) i Multiple Listing Service statistics for the sub area in which the subject property lies (area 571; sub area 3) for the past six months reveals: 39 homes on the market; average list price $80,092; - average market time 60 days 33 homes sold; 38% of properties on the market, average sale price $79,895; average market time 73 days For two bedroom homes, such as the subject property in the same sub area, the statistics reveal: I - 4 homes on the market; average list price $62,650; average market time 72 days - 3 homes sold; 25% of those listed; average sale price $66,266; average market time 103 days The subject property is located in the southern portion of the city. 53rd Avenue North is the city boundary between Brooklyn Center on the north and Minneapolis on the south. The neighborhood is developed primarily with single family homes with an average age of about 30 to 40 years. �- -5- SITE ANALYSIS The subject's site is rectangular in shape with a frontage on Colfax Avenue of 72 feet. The total area is 9,756 square feet. The dimensions are 72 b 13 . y 5 5 (average depth). Land Area: 9,756 sq. ft. Shape: Rectangular Frontage: 72 feet on Colfax Avenue North Topography: Level Drainage: Adequate, to the east 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 and cable television, sanitary sewer, storm sewer and water. Sidewalks: None Curb and Gutter: Concrete Street Surface: Colfax Avenue is a two lane bituminous surface street. -6- IMPROVEMENTS ANALYSIS Type: Wood frame single family residential Style: One Story with full basement with hip roof Size: 36 feet X 20 feet for a round floor area of 720 s . ft. g q Age: 1941 Exterior: Wood shakes Roof Cover: Asphalt shingles; Hip frame; Reroofed in January 1991 per disclosure statement in addendum. Garage: None Windows: Double hung and glider with aluminum combination storms and screens. Plumbing: One full bath; one laundry tub in basement; kitchen sink; 50 gallon electric hot water heater Electrical: 100 amphere capacity with cicuit breakers; the . kitchen has a ceiling fan /light fixture Heating: Gas forced air heat; 76,00 BTU capacity; Mayflower brand Interior Finishing: she interior is finished into two bedrooms, living room, bathroom and kitchen area. Interior floor cover is carpet and linoleum, wall cover is painted sheetrock and fiberboard with some paneling. There is some acoustic tile on the ceiling. Other features: The floor joists are 2 x 8 both 18" and 24" on centers. Basement walls are nine courses of concrete block. The kitchen cabinets are plywood. Condition/ repairs: The addendum has a letter stating work orders required by the City. Some have been done such as the reroofan drear door but some have not such as the soffit and fascia repair. The interior has had cosmetic updating with paint carpet etc. The bedrooms are off the living room rather than a hallway thus causing some functional obsolescence. -7- i HIGHEST AND BEST USE The definition of highest and best use is contained within the definitions section of this appraisal. The highest and best use of the subject property will be analyzed both of the site as if vacant and the site as improved. The subject property is zoned R -1, one family residence. The site is 72 x 135 which complys with the minimum zoning requirements. R -1 zoning provides for single family residential propertyies exclusively. Based on application of the four tests of highest and best use of the site as if vacant, the highest and best use of the subject site as if vacant is for a single family residential development. Applicatition of the highest and best use of the subject site if improved reveals a single family residence which is in comformance with the balance of the neighborhood and the zoning ordinance. Based on this analysis, the highest and best use of the subject property as improved is its current use. i -8- 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 Market Data 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. Market Data Approach PP h The Market Data Approach or Sales Comparison Approach is based upon the principle of substitution, that is, when a t 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 ro e then four units a rt of less it P P Y gross rent multiplier plier is developed b dividing the sale P Y g 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. -9- 1 s ,# r INCOME APPROACH The income approach was considered 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 4 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. -10- { COMPARABLE SALE #1 i - i i 1 LOCATION: 5322 Morgan Ave. No., Brooklyn Center, MN. r i SALE PRICE: $33,000 SALE DATE: 6 -90 *_ TERMS: Market rates SITE: 52 x 118 ZONING: R -1 BUILDING: 1 story single family dwelling YEAR BUILT: 1942 SIZE: 550 square feet GARAGE: 1 car detached T CONDITION: Fair COMMENTS: Located one mile southwest; Partial basement; one bedroom. -11- F'i► a s I.+ ♦ if s @ ♦ f e:� r ��e. .per- f rt ' t 3 � � i 'g • �� r ms's _..K +, wL � } �aY�e�. Yi 'Y _ � ��� `� � •'d mw RJAWFA - °°� g. �,� "�sa � ,�,,,,•�. •.�'.�..,.`> � t Tc.g. �,ar.:. .,y h.� °s`45SS� '{n.'af:::.: COMPARABLE SALE #3 to t - 1 -- •. - r - .- Z � - LOCATION: 5741 Bryant Ave. No., Brooklyn Center, MN. SALE PRICE: $50,000 SALE DATE: 9 -90 TERMS: Contract for Deed SITE: 75 x 100 ZONING: R -1 BUILDING: 1 story single family dwelling YEAR BUILT: 1940 SIZE: 700 square feet GARAGE: 1 car detached CONDITION: Fair COMMENTS: Located one half mile northeast; Partial basement; one bedroom. -13- MARKET ANALYSIS OF COMPARABLE SALES The method of estimating value by the use of the market data technique is a method where sales of similar improved property are compared with the subject. In the following chart, I have applied a dollar amount either plus of minus to the comparable properties to adjust them to the subject. The time adjustments were taken from a recent market study. SUBJECT COMP #1 COMP #2 COMP #3 ADDRESS 5538 Colfax 5322 Morgan 5339 Emerson 5741 Bryant Brkn Ctr Brkn Ctr Brkn Ctr Brkn Ctr SALE PRICE NA $33,000 $47,000 $50,000 DATE ADJ 2 -15 -91 6 -90 3 -90 9 -90 AGE ADJ Blt 1941 Blt 1942 Blt 1930 Blt 1940 FIN BSMT Full Bsmt Part Bsmt Full /Fin Bmt Part Bsmt 2,500 (1,500) 2,500 REPAIRS Def. Mtce. (1,500) (1,500) (1,500) i NECESSARY GARAGE None Single Double Single (1,500) (2,000) (1,500) BATH 1 Same Same Same BEDROOMS 2 1 2,000 1 2,000 1 2,000 HEATING GFA GFA GFA GGravity (700) LDSC /IMPS Fair Same Same Same LIVING S.F. 720sf 550sf 788sf 700sf 5,950 (2,380) 700 LAND SIZE 72 X 136 52 x 118 40 x 120 75 x 100 2,500 3,000 TERMS OF SALE NA NO ADJ FHA(1,610pts) C /D(1,500) NET ADJ NA $9,950 ($3,990) 0 INDICATED VALUE OF SALE $42,950 $43,010 $50,000 Greatest weight is given to sales two and three as they required the least adjustment. The repairs are estimates as described in the t narrative of the appraisal. A reconciled value via the market '- approach is $45,000. -14- J COST APPROACH TO VALUE 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 and site values were taken from the market. House 1 story 720 sq. ft. @ $ 55.22 = $ 39,758 Extras Features 0 Replacement Cost New $ 39,758 Depreciation Physical 40% $15,900 Functional 1,000 Economic 0 $(15,000) Landscaping 1,500 Land $ 18,500 $ 42,858 Rounded To $ 42,900 '' -15- t RECONCILIATION AND VALUE CONCLUSIONS }} i The value estimate developed by the applicable approaches: Estimate of Value - Income Approach NA Estimate of Value - Cost Approach $42,900 Estimate of Value - Market Approach $45,000 It is the appraiser's belief that the cost approach tends to set the upper limit of value, since by the principle of substitution, a buyer would not pay more for a property than the cost of reproducing the structure, less depreciation plus the market value of a similar site. The repairs necessary on the subject property make it difficult to properly assign a level of depreciation therefore in this application the cost approach does reflect a lower value than the market approach. The market comparison approach is the most reliable technique when adequate comparable sales are available. Three properties within the same neighborhood were compared and contrasted to the subject property. This approach receives the greatest weight in the final value estimate. 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 February 15, 1991 is: FORTY FIVE THOUSAND DOLLARS ($45,000) i r 3 -16- CONTINGENT AND LIMITING CONDITIONS The certification of the appraiser appearing in this appraisal report is subject to the following conditions and to such other specific and limiting conditions as set forth by the appraiser in this report. The appraiser assumes no responsibility for matters of a legal nature affecting the property appraised or the title thereto, nor does the Appraiser render any opinion as to the title, which is assumed to be marketable. The property is appraised as though under responsible ownership. The sketches in this report are to assist the reader in visualizing the property, and the appraiser assumes no responsibility for its accuracy. The appraiser has made no survey of the property. The appraiser is not required to give testimony or appear in court because of having made this appraisal, with reference to the property in question, unless arrangements have been made previously therefore. ~ The distribution of the total in this report between land and improvements applies only under the existing program of utilization. The separate valuations for land and building must not be used in conjunction with any other appraisal and are valid if so used. The appraiser assumes that there are no hidden or unapparent conditions of the property, subsoil or structures which would render it more or less valuable. The appraiser assumes no responsibility for such conditions as for engineering which might be required to discover such factors. Information, estimates and opinions furnished to the appraiser and contained in this report were obtained from sources considered reliable and believed to be true and correct. However, no responsibility for accuracy of such items furnished the appraiser can be assumed by the appraiser. Disclosure by the appraiser of the content of this appraisal report is subject to review in accordance with the by -laws and regulations of the professional appraisal organizations with which the appraiser is affiliated. • -17- 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 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. 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; g, Residential Appraisal, Apartment Appraisal, Assessment Laws; History nd Procedures; dures Property Valuation Short C p y al i nurses; Business Site Selection and Analysis. PROFESSIONAL DESIGNATIONS: Member, Appraisal Institute; Senior Accredited Minnesota Assessor; Certified Assessment Evaluator; Residential Evaluation Specialist. L 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. '- -18- i T QUALIFICATIONS OF J. SCOTT RENNE (continued) i . 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 and Minnesota School of Real Estate. CURRENT PROFESSIONAL ACTIVITIES: 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 Assessment Valuation Global Editor; AIREA Chapter 35 Admissions Committee; AIREA Regional Ethics and Counseling Panel. PROFESSIONAL MEMBERSHIPS: Minnesota Association of Assessing Officers; Minnesota Chapter of International Association of Assessing Officer; International Association of Assessing Officers; American Institute of Real Estate Appraisers; Citizen's League; International Right of Way Association; Minneapolis Board of Realtors; Minnesota Association of Realtors; National Association of Realtors. - Qualified as an Expert Witness in Minnesota Tax Court and Condemnation Commissioner's Hearings - Licensed Minnesota Real Estate Broker #07545920. - Licensed Real Estate Appraiser #4000733 t -19- P hoto g ra p h �`'nx � � �� ��,,�r � ��:: - • 'h.+T' `^ b • 4 .� �' ,b� rr� ���q� � �' f4;�'�, a�_t t� ;i�4'� �� � '� j /���4'� �,. Rt r t3'• id,Cy �� ri ��� t. .+w'�^^ I { .,a. • -t '+ 'b�� :" c 4 y 'fig ^ -: ILW , W-W ARAM L r 5 � s .,a - �t� s r � �� . w ,r r � ki *+ f �?` ," �� •,:.; p �r �'�'Z' + � �r � � ,'►�, to � T � ��, a-# � ��� � E i E r L 2 t . 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W t Exrrgs a rsxfe'�^ro ,awi♦,, "> i y e"{ ;s'` ..c•~, S id s. � t'> h».x #r ''� s i. _:•`, ;t `, :P•'"�Y*c F'"`.f ..... o•a, k _ ®� ..1s�E,� �!fl �� � t �.. �. z - - '� r .F 1fn+ -£yt .'ij`> } A •.� F' t i�a t��. ac lN,l/ �= .... M «fis�l 4 � >� raY,ws !k` r.. -w- w.. �r f 'J' •`vF$"�t`.4�y- 37.�.z•h^e 7F' _ N c 3! i s -. fi �� '� � ,� .ice � w_� =� a �' yss 7' n rg. .. 4 y, g r N r ( „a s i.. q ♦ a: �'d `—�� fir' IQS01 � � E i . � }• x. a ^'x+'r � f > �'"'�. 't t � `°' tt � h4 _ ��' `� \�yt:�r+ss,��,,r� �'^� � `l %ar � �i n • �y. �-C� t Y � �. � i tea r U /i7 � '°. �;'J,..i�'h,'� �' �.Y,.y'"nf.y :•e " , a " c'a sx�. -.a. X, ��Cf�. `"&.irg r�•S.a a x . c� a �32' i ,�f 11 �"�!'._ �'� x 3° j� . '• r? . •,+•� : - � r '•3� -- ��Y���,A^�•� � ?t - v '.S�'T� y cv. �• �Xe 7 ! + '. L I f € t 4 s e 3 rr a.s i� t r: ^ms r � will 9 i e � . a ^ R r � �f } � S3 • ®® • • 1 1 �i+�b..* ee,a -Lw } $S� r`S °x'yfi ''Y-,i`y',..'�+.,..axa'4} °z xi ? �, ;x ' ilk '',t' i ''4 °€ ' t a. •=`� — si _ CITY OF BROOKLYN CENTER DEPARTMENT OF PLANNING AND INSPECTION (612) 569 -3344 FAX (612) 561 -0717 HOUSING MAINTENANCE COMPLIANCE ORDER DATE: August 8, 1990 COMPLIANCE DATE: September 7, 1990 TO: Robert Lindbloom 11429 65th Place North Maple Grove, MN 55369 cc: Current Resident LOCATION: 5538 Colfax Avenue North SECOND Notice COMPLIANCE OFFICIAL: Karen Barton The following violations of the Housing Maintenance and Occupancy Ordinance were cited during a recent inspection of the above premises. You are hereby informed that these violations must be corrected on or 3 before the COMPLIANCE DATE indicated. Failure to correct or to make satisfactory arrangements to correct violations may result in suspension or revocation of a rental dwelling license, if applicable, and, in any case, may result in issuance of a citation which, upon conviction, is punishable by fine and/or imprisonment. Section 12 -1202 of the Ordinance provides for Right of Appeal, when it is alleged that a Compliance Order is based upon erroneous interpretation of the Ordinance. The Appeal must be submitted to the Inspection Department, in writing, specifying the grounds for Appeal, within five (5) business days after service of the order, and must be accompanied by filing fee of $15.00 in cash or cashier's check. DESCRIPTION OF VIOLATIONS AND ORDINANCE SECTION Failure to make corrections by compliance date may result in a citation. 1. Control weeds and seed or sod bare patches in yard. (12 -317) 2. Replace missing window lock in right and left bedroom and living room. (State Code, 12 -703) 3. Replace gasket on refrigerator. (12- 402 -3) 4. Repair rear entrance door. (12 -703) 5. Add grippable handrail to basement stairs. (12 -406) 6. Repair duct work to humidifier on furnace or remove humidifier. (12 -709) 7. Seal crack in step between house and step. (12 -406) 8. Replace rotted wood around threshold by south steps. (12 -406) 9. Repair screen and provide window for rear storm door. (12 -307) 10. Repair roof on east side of house. (12 -703) il. Replace rotted fascia and soffit on east side of house. (12 -707) F Ae REAL ESTATE TRANSFER DISCLOSURE STATEMENT # This form approved by the Minnesota Association of REALTORS: Minnesota Association of REALTORSa disclaims any liability arising out of use or misuse of this form. 1. Date J " 5 ' __/ / i 2. Page / of 2 Pages 3. This disclosure statement concerns the real property located in the City of 4. County of q,Jro� ✓ State of Minnesota, described as 55 3 .� L'n /�'r� x It e, ✓. ' 5. This disclosure is not a warranty of any kind by the Seller(s) or any Agents) 6. representing any Party(s) in this transaction, and is not a substitute for any inspections or warranties the Party(s) may wish to obtain. 7. BUYER(S) AND SELLER(S) MAY WISH TO OBTAIN PROFESSIONAL ADVICE AND /OR INSPECTIONS 8. OF THE PROPERTY AND TO PROVIDE FOR APPROPRIATE PROVISIONS IN A CONTRACT BETWEEN 9. BUYER(S) AND SELLER(S) WITH RESPECT TO ANY ADVICE/INSPECTIONS/DEFECTS. 10. SELLERS INFORMATION: The Seller discloses the following information with the knowledge that even though this is not 11. a warranty, prospective buyers may rely on this information in deciding whether and on what terms to purchase the subject 12. property. The Seller(s) authorizes any Agent(s) representing any party(s) in this transaction to provide a copy of this statement s 13. to any person or entity in connection with any actual or anticipated sale of the property. 15.is a disclosure =.c! is 3 16. A. GENERAL INFORMATION: 17. (1) When did you purchase or build the home? A,'bL !�7 18. (2) Have you lived in this home for the past 12 months? Yes No >C 19. (3) Has there been any flood or other disaster(s) at the property? Yes No X 20. If yes, give details of what happened and when: 1 21. 22. 23. (4) Has the structure ever been altered? (For example, additions, altered roof lines, changes to load bearing walls.) 24. -Yes No If yes, please specify what was done, when and by whom (owner or contractor): 25. 26. 27. (5) Is the property suitable for year round use? X Yes No 28. B. STRUCTURAL SYSTEMS: Do any of the following conditions currently exist or have they previously existed? 29. t C :ve details to 30. (1) THE BASEMENT 31. (a) Foundation problem Yes No _X (e) Drain tiling problem Yes No X 32. (b) Flooding Yes No (f) Cracked floors/wails Yes No 33. (c) Wet Walls Yes _k No (g) Sewer backup Yes No -X 34. (d) Leakage /seepage Yes_ No _ (h) Other Yes No 35. Give details to any question answered "yes ": c (Je %AJeL!�S C-- ' Lvg //s V 36. 37. 38. (2) THE ROOF? 39. (a) What is the age of the roofing material? Z I Comments: 214" - 40. (b) Has there ever been interior damage from ice buildup? Yes X No 41. (c) Has there ever been any leakage or other problems? Yes X No 42. (d) Have there ever been any repairs or replacement made to the roof? Yes X No 43. Give details to any question answered "yes ": 44. fee 45. 46.C. SPECIAL COMMENTS ON HEATING. PLUMBING. ELECTRICAL AND MECHANICAL SYSTEMS: 47. The following are in working order and shall be at time of closing unless otherwise stated in comments below. All items listed 48. below are not necessarily part of this sale. 49. YES NO YES NO YES NO 50. Range y _ Intercom Central Heating System 51. Oven X _ Garage Door Openers _ Central Air Conditioning 52. Hood and all controls Wall Air Conditioners) 53. Refrigerator Ventilating FanslFixtures _ Furnace Humidifier 54. Microwave Oven Security System Electronic Air Purifier 55. Dishwasher Smoke Detectors _�_X Supplemental Heater 56. Freezer Central Vacuum _X_ Solar Collectors X 57. Washer _ Door Bells Fireplace Equipment 58. Dryer , _ Window Treatments Fireplace and/or Inserts _ 59. Trash Compactor Water Heater Woodburning Stove 60. Garbage Disposal Sump Pump _Y Incinerator 61. Plumbing Systems Drain Tiling _ X Water Softener t 62. Toilet Mechanisms y _ t � � Private Sewer System Sprinkler System 63 Private Well Attached Antenna and R4 REAL ESTATE TRANSFER - DISCLOSURE STATEMENT 66. Address 67. Page 2 68. Unused Well: Is there a well on the property which is no longer in use? []Yes fl�Vo 69. If yes, has it been sealed according to State Regulations MSA 156A? []Yes ENO 70. Comments: 71. Contaminated Well: Is there a well on the property containing contaminated water? Yes_ No AJ!" 72. Date well water last tested for contaminants Comments: 73. D. LAND USE AND PROPERTY CONDITION: 74. Are you aware of any of the following existing: 75. Encroachments? Yes_ No Soil proolems? Yes_ No-.Z- 76. Diseased Trees? Yes_ Nom Rodent Infestation? Yes_ NoX- insect Infestation? Yes_ NoZ- 77. Restrictions or Reservations on the use of the property? Yes No x 78. Easements other than utility or drainage easements which do not interfere with present improvements? Yes No Y_ 79. Is the property located in a designated flood plain? Yes No X 80. Comments: 11 r) / l4 740- 7-5 ( 81. I 82. 83. E. INSULATION DISCLOSURE: 84. Does the insulation in the property contain urea formaidehvde foam? Yes No Unknown 85. Date insulation installed: Lon 16 (, L.� pj - Type: Company: 86, Comments: 87. F. OTHER KNOWN DEFECTS: 88. Are there any other known defects in or on the property? Yes No X If yes, explain below: 89. �� f '•, �• G � J T' g l S , ry r I J S 7""C •� j 90. /2,2 ✓e 1>Tc I 91. 92. �1�/� 93. G. SELLER'S STATEMENT: 94. We /I, owner(s) of the property at S5 3 Ccs W^ J?vC 95. ac kn owleage the above Real Estate Transfer Disclosure Statement and give permission to Listing Broker to disclose 96. t It s , information to the Prospective buyers. 98. H. BUYER'S ACKNOWLEDGEMENT: ( 99. We /I, the Buyer(s) of the property at i 100. do acknowledge receipt of the Real Estate Transfer Disclosure Statement and agree that no representations 101. regarding the condition of the property have been made, other than those made above. LISTING BROKER AND 102. AGENTS MAKE NO REPRESENTATIONS AND ARE NOT RESPONSIBLE FOR ANY CONDITIONS EXISTING IN 103. THE PROPERTY. 104. f8W✓1 OV.I IBuy.ri D..1 105.1. SELLER'S ACKNOWLEDGEMENT: 106. AS OF THE DATE OF THE ACCEPTANCE OF THE PURCHASE AGREEMENT, We /I, the Seller(s) of the above 107. property, agree that the condition of the property is the same as noted above and will be in proper working order 108. on date of closing, except for th 9 p e changes indicated above and dated: 109. is-) (S-) (o..l 110. MN:RETDS (5/88) ORIGINAL COPY TO LISTING BROKER; COPIES TO SELLER, BUYER, SELLING BROKER. 12) i s - x