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HomeMy WebLinkAbout2017 03-27 EDAPC 0 EPA MEETING City of Brooklyn Center March 27, 2017 AGENDA Call to Order—The EDA requests that attendees turn off cell phones and pageis during the meeting. A copy of the frill City Council packet, including EDA (Economic Development Authority), is available to the public. The packet ring binder is located at the podium. 2.Roll Call 3.Approval of Agenda and Consent Agenda—The following items are considered to be routine by the Economic Development Authority (EDA) and will be enacted by one motion. There will be no separate discussion of these items unless a Commissioner so requests, in which event the item will be removed from the consent agenda and considered at the end of Commission Consideration Items. a. Approval of Minutes 1. February 13, 2017—Regular Session 4.Commission Consideration Items a. Resolution Authorizing the Acquisition of Blighted Property in Connection with the Remove and Rebuild Program (5315 James Avenue North) Requested Commission Action: —Motion to adopt resolution. 5.Adjournment IM ixwATsriItem No. 32- MINUTES OF THE PROCEEDINGS OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA REGULAR SESSION FEBRUARY 13, 2017 CITY HALL - COUNCIL CHAMBERS I..91 M 0XIINUM It The Brooklyn Center Economic Development Authority (EDA) met in Regular Session called to order by President Tim Willson at 8:45 p.m. -uj President Tim Willson and Commissioners Marquita Butler, April Graves, Kris Lawrence- Anderson, and Dan Ryan were present. Also present were Executive Director Curt Boganey, Interim Assistant to the City Manager Reggie Edwards, Public Works Director/City Engineer Steve Lillehaug, Director of Business and Development Gary Eitel, Planning and Zoning Specialist Tim Benetti, Deputy Director of Building and Community Standards Jesse Anderson, City Attorney Troy Gilchrist, and Michaela 1s'ujawa-Daniels, TimeSaver Off Site Secretarial, Inc. ttIA'I'I SJ ffI'I Jkl 7VI IXIII]IJ K1 Wi ahI I7'I Commissioner Ryan moved and Commissioner Graves seconded to approve the Agenda and Consent Agenda, and the following item was approved: 3a. APPROVAL OF MINUTES 1. January 9, 2017 - Regular Session Motion passed unanimously. 013011 0 so D1 4"T.11 i u 4a. RESOLUTION APPROVING AUTHORIZATION OF BLIGHTED PROPERTY IN CONNECTION WITH THE MOVE AND REBUILD PROGRAM (5315 JAMES AVENUE NORTH) Director of Business and Development Gary Eitel introduced this item and provided a presentation on the background of this property. 02/13/17 -1- DRAFT Executive Director Curt Boganey requested this item be tabled to further review other possible acquisition options with Mr. Eitel. The Commissioners had no objections to this request. Commissioner Ryan moved and Commissioner Graves seconded to table Resolution Approving Authorization of Blighted Property in Connection with the Move and Rebuild Program (5315 James Avenue North) until a future date. Motion passed unanimously. 4b. PARCEL FROM TAX INCREMENT FINANCIING DISTRICT NO. 3 WITHIN HOUSING DEVELOPMENT AND REDEVELOPMENT RESOLUTION of Business and Development Gary Eitel introduced this item and provided a presentation on the background of this property. Commissioner Ryan moved and Commissioner Lawrence-Anderson seconded to adopt RESOLUTION NO. 2017-03 Approving the Removal of a Parcel from Tax Increment Financing District No. 3 Within Housing Development and Redevelopment Project No. 1 (2500 Co. Rd. 10-Former Brookdale Ford Site). Motion passed unanimously. 5. ADJOURNMENT Commissioner Graves moved and Commissioner Ryan seconded adjournment of the Economic Development Authority meeting at 9:09 p.m. Motion passed unanimously. 02/13/17 -2- DRAFT EDA Agenda Item No. 4a EDA UF]EM MEMDRANDUM DATE: March 27, 2017 TO: Curt Boganey, City Mana FROM: Gary Eitel, Director of Business & Development SUBJECT: Resolution Authorizing the Acquisition of Blighted Property in Connection with the Remove and Rebuild Program (5315 James Avenue North) Recommendation: It is recommended that the Economic Development Authority consider approval/adoption of Resolution Authorizing the Acquisition of Blighted Property in Connection with the Remove and Rebuild Program (5315 James Avenue North). Background-. January 11, 2017, a fire at 5315 James Ave. N. resulted in extensive interior and exterior damage to this single family home, resulting in the structure being declared a hazardous building. The property owner was aware of the EDA's program of acquiring and removing blighted buildings and inquired if the EDA would be interested in possibly acquiring his property. On February 13, 2017, the EDA considered the proposed acquisition of 5315 James Ave. N. for its assessed land value ($35,000); the estimated demolition cost to remove the fire damaged building and accessory structure ($15,000); the potential resale of the property; and the potential of other possible acquisition options. The EDA moved to table this matter to review other possible acquisition options. Remove and Rebuild Program: On January 12, 2009, the EDA adopted Resolution No. 200902, A Resolution Establishing Housing Programs and Approving the Use of Funds from Tax Increment District No. 3 Housing Account, which authorized the Remove and Rebuild Program. The program was created to remove blighted, distressed, and unmarketable properties and to return these properties to an enhanced and compatible use with the neighborhood and consistent with zoning regulations and the City's Comprehensive Plan. Additionally, the program recognized that if an appropriate use for the land is not imminent, the property will be land banked until such time an appropriate use becomes available. The program has resulted in the construction of 7 new single family homes that have been sold to owner occupants meeting the affordability requirement of the TIF 3 Housing Fund ( a family of 2 or less not to exceed the average household median income for the metro area or 115% of the average household median for a family of 3 or more). Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust Novak & Fleck Construction, the developer of 6 of these properties, has indicated that they would be interested in building a split entry home with a 2+ car garage on this property. Attached is a copy of the floor plan of the proposed single family home which meets the minimum side yard setback of 10 feet on the house side and 5 feet on the garage side. Proposed Acquisition: The property is an interior lot, with 50' of frontage on James Avenue N. and 119.03' of depth with rear access from a 30 foot wide alley. The tax records indicate that the residence was built in 1942. The home to the north was constructed in 1959 and the home to the south was constructed in 1958. The 2017 property tax value is shown at $97,000. Bldg. Value $62,000 Lot Value $35,000 There are no special assessments levied on this property. Staff now understands that the property owner's insurance policy is sufficient to cover the outstanding mortgage and the property owner is in a position to reduce the sales price to cover the estimated cost of the demolition. Budget Issues: The acquisition of this blighted property for its assessed lot valuation of $20,000 is proposed to be funded from the Tax Increment District No. 3 Housing Account. The estimated cost for a single family demolition and site restoration is approximately $15,000. The proceeds from the sales of this lot are considered to be future tax increment revenue for Tax Increment Financing District No. 3 Housing Account. Strategic Priorities: Enhanced Community Image Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public (rust Commissioner introduced the following resolution and moved its adoption: EDA RESOLUTION NO.__________ RESOLUTION AUTHORIZING THE ACQUISITION OF BLIGHTED PROPERTY IN CONNECTION WITH THE REMOVE AND REBUILD PROGRAM (5315 James Avenue North) WHEREAS, Tax Increment Finance (TIF) District No. 3 was created in 1994 as a Redevelopment District to provide assistance to various commercial redevelopment and housing development projects within the District. The housing objectives included the following: o To acquire blighted or deteriorated residential property for rehabilitation or clearance and redevelopment; and • To develop housing opportunities for market segments underserved by the City including housing for the disabled and elderly; and WHEREAS, On January 12, 2009, the EDA adopted Resolution No. 2009-02, "A Resolution Establishing Housing Programs and Approving the Use of Funds from the Tax Increment District No. 3 Housing Account" which authorized the following: • The creation of the Renew Loan and Renew Grant programs. • The creation of the Remove and Rebuild program. • The initial budgets for the Renew Loan and Renew Grant Program and Remove and Rebuild Program. • The use of the Greater Metropolitan Housing Corporation to administer the programs; and WHEREAS, the Remove & Rebuild Program was created to remove blighted, distressed, and unmarketable properties and to return these properties to an enhanced and compatible use with the neighborhood and consistent with zoning regulations and the City's Comprehensive Plan; and WHEREAS, on January 11, 2017, a house fire at 5315 James Avenue North caused extensive damage to the interior and exterior of this residence resulting in the home to be declared to be uninhabitable and a blighted building; and WHEREAS, the real property located at 5315 James Avenue North, (the "Subject Property") is a voluntary sale of a vacant and uninhabitable single family residence for the amount of $20,000 (the 2017 assessed land value of $35,000 minus the estimated demolition costs of $15,000). WHEREAS, the EDA has determined acquisition of the Subject Property is consistent with the goals and objectives of the Tax Increment District No. 3 Housing Program EDA RESOLUTION NO. and is in the best interest of the City of Brooklyn Center and its citizens. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of Brooklyn Center, Minnesota, as follows: 1.The purchase agreement for the Subject Property is hereby approved. 2.The President and Executive Director of the EDA are authorized and directed to execute the purchase agreement, and the Executive Director is authorized and directed to take all such further steps as are necessary to effect the terms thereof. March 27, 2017 Date 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. •,iu :raM*uatl 1.PARTIES. This Purchase Agreement ("Purchase Agreement") is entered into this day of February, 2017, by and between Michael Thomas Stewart, a single person ("Seller") and the Economic Development Authority of Brooklyn Center, Minnesota, a public body corporate and politic under the laws of the State of Minnesota ("Buyer"). 2.SALE OF PROPERTY. Seller is the owner of that certain real estate ("Property") located at 5315 James Avenue North, Brooklyn Center, MN 55429, Hennepin County, Minnesota and legally described as follows: Lot 4, Block 3, "Humbolt Addition" [Torrens Certificate No. 550735] 3, OFFER/ACCEPTANCE. In consideration of the mutual agreements herein contained, Buyer offers and agrees to purchase and Seller agrees to sell and hereby grants to Buyer the exclusive right to purchase the Property and all improvements and fixtures thereon, together with all appurtenances, including, but not limited to, plant, shrubs, trees, and grass. 4. NO PERSONAL PROPERTY INCLUDED IN SALE: There are no items of personal property or fixtures owned by Seller and currently located on the Property included in the Purchase Price for purposes of this sale. oil No RIFA A. PURCHASE PRICE: The total Purchase Price ("Purchase Price") for the Property is Twenty Thousand and No/lOOths Dollars ($20,000.00). IL (1)EARNEST MONEY. The sum of Zero Dollars ($0.00) Earnest Money ("Earnest Money") shall be paid by the Buyer to the Seller, the receipt of which is hereby acknowledged. (2)BALANCE DUE SELLER: Buyer agrees to pay by check or wire transfer on the Closing Date ("Closing") any remaining Balance Due according to the terms of this Agreement. (3) DEED/MARKETABLE TITLE: Subject to performance by Buyer, Seller agrees to execute and deliver a Warranty Deed conveying marketable title to the Property to Buyer, subject only to the following exceptions: a. Building and zoning laws, ordinances, state and federal regulations. 4937800 CBR BR305-145 b. Reservation of minerals or mineral rights to the State of Minnesota, if any. C. Public utility and drainage easements of record which will not interfere with Buyer's intended use of the Property. d. Title defects waived by Buyer pursuant to paragraph 12 below. 1piIiIJhuaIhu'ItsiH3u o:am Iaai i,i iiZ •iiici;v&i arimani A.Warranty Deed free and clear of encumbrances subject only to the exceptions stated in 5B (3) a, b, c and d. B.Standard form Affidavit of Seller. C. Well disclosure certificate, if required. E. Such other documents as may be reasonably required by Buyer's title examiner or title insurance company. 7.CLOSING DATE. The closing of the sale of the Property shall take place within 60 days after the date of this Agreement and receipt of Title Evidence ("Closing") or at an earlier date as mutually agreed by the parties. The closing shall take place at the offices of Economic Development Authority of Brooklyn Center, 6301 Shingle Creek Parkway, Brooklyn Center, MN 55430. 8.ENVIRONMENTAL INSPECTION. Seller, prior to vacation of the Property, shall remove all substances that, under state or federal law, must be disposed of at an approved disposal facility. This requirement does not apply to hazardous substances integrated into the building improvements (e.g., asbestos) or soil but applies only to movable equipment, supplies and materials that are located or stored on the Property. Buyer and Seller will conduct a joint inspection of the Property at a time to be mutually agreed upon prior to Closing for the purpose of identifying materials that must be removed by Seller. 9.LEAD. If the dwelling structure on the Property was constructed prior to 1978, a lead paint disclosure accompanies this Agreement. 10.REAL ESTATE TAXES. A.Seller will pay at or prior to Closing all real estate taxes due and payable in 2016 and prior years on the Property, including any delinquent real estate taxes. B.Real estate taxes due and payable in 2017 shall be prorated as of Closing between Buyer and Seller. If the amount of real estate taxes due and payable in 2017 are 4937800 CBR BR305-145 2 not available on the date of closing, the pro-rated taxes will be based on the amount of real estate taxes due and payable in 2016. 11. SPECIAL ASSESSMENTS. A.Seller shall pay on or prior to Closing the balance of all special assessments levied or pending. B.Seller shall pay any deferred real estate taxes or special assessments, payment of which is required as a result of the Closing of this sale. C.As of the date of this Agreement, Seller has not received a notice of hearing for a new public improvement project from any governmental assessing authority, the costs of which project may be assessed against the Property. If a notice of pending special assessment is issued after the date of this Agreement and on or before Closing, Buyer shall assume payment of all of any such special assessments and Seller shall provide for payment on date of closing of none of any such special assessments. D.Notwithstanding any other provision of this Agreement, Seller shall at all times be responsible to pay special assessments, if any, for delinquent sewer or water bills, removal of diseased trees prior to the date of this Agreement, snow removal, or other current services provided to the Property by the assessing authority while the Seller is in possession of the Property. 12. MARKETABILITY OF TITLE. Buyer shall, at its expense and within a reasonable time after Seller's acceptance of this Agreement, obtain a commitment for title insurance or other evidence satisfactory to Buyer ("Title Evidence") for the Property or examine the abstract of title. Buyer shall have ten (10) business days after receipt of a fully executed purchase agreement and the Title Evidence to examine the same and to deliver written objections to title, if any, to Seller. Seller shall have until the Closing (or such later date as the parties may agree upon) to make title marketable, at the Seller's expense. In the event that title to the Property cannot be made marketable or is not made marketable by the Seller by the Closing, then, at the option of the Buyer, this Agreement shall be null and void and all Earnest Money will be returned to Buyer, if any. 13. CLOSING COSTS AND RELATED ITEMS. Seller will pay: (a) any deed transfer taxes and conservation fees and recording fees for all instruments required to establish marketable title in Seller; (b) any deed transfer taxes and conservation fees required to enable the Buyer to record its deed from Seller under this Agreement. Buyer shall be responsible for the payment of the following costs: (a) recording fees for deed from Seller under this Agreement (b) the title search, name search and assessment search fees and other fees incurred in preparation of the Commitment for title insurance or other Title Evidence, and title insurance premium, if any; and (c) any closing fee charged by the title insurance or other closing agent, if any, utilized to close the transaction contemplated by this Agreement. Each party shall be responsible for its own attorneys' fees and costs. 4937800 CBR BR305-145 14. POSSESSION/CONDITION OF PROPERTY. Seller shall deliver possession of the Property to Buyer immediately after Closing. Seller shall remove all personal property from the Property prior to Closing. Any furniture, fixtures, equipment or other personal property remaining at the Property as of Closing shall be deemed the property of Buyer and may be used by Buyer or disposed of by Buyer as Buyer sees fit. Buyer and Seller will conduct a joint inspection of the Property at a time to be mutually agreed upon prior to Closing. • iS. DISCLOSURE; INDIVIDUAL SEWAGE TREATMENT SYSTEM. Seller discloses that there is not an individual sewage treatment system on or serving the Property. If there is an individual sewage treatment system on or serving the Property, Seller discloses that the system is not in use. In the event there is a sewage treatment system, a map .of said location of the system is attached. ir. []Seller discloses that there is a well on or serving the Property. . A well disclosure Certificate accompanies this agreement. Or Seller does not know of a well on the described real Property. 17, . SELLER'S WARRANTIES. Seller warrants that buildings, if any, are entirely within the boundary lines of the Property. Seller warrants that there is a right of access to the Property from a public right-of-way. Seller warrants that there has been no labor or material furnished to. the Property for which payment has not been made. Seller warrants that there are no present violations of any restrictions relating to the use or improvement of the Property. Seller has good and marketable simple title interest to the Property and no consents or approvals from any third parties are required'Seller will not enter into a lease after the date of this Agreement. Seller represents that the Property is vacant. Seller agrees to pay all charges for sewer, water, electric, gas, rubbish removal and cable television incurred prior to Closing. These warranties shall survive the Closing of this transaction. 18.`RELOCATION BENEFITS. Seller acknowledges that the Seller initiated negotiations with Buyer for the transaction contemplated by this purchase agreement, and that this transaction is not made under threat of condemnation by Buyer. Seller represents that the Property is vacant and unoccupied. Seller agrees to waive any and all relocation benefits, assistance and services to which Seller might otherwise be eligible. Seller agrees to provide to Buyer at Closing an executed waiver of relocation benefits in substantially the form of the attached Exhibit A. 19.NO MERGER OF REPRESENTATIONS, WARRANTIES. All representations and warranties contained in this Agreement shall not be merged into any instruments or conveyance delivered at Closing, and the parties shall be bound accordingly. 1. 20. ENTIRE AGREEMENT; AMENDMENTS. This Agreement constitutes the entire agreement between the parties, and no other agreement prior to this Purchase Agreement or contemporaneous herewith shall be effective except as expressly set forth or incorporated herein. 4937800 CBR BR305-145 4 Any purported amendment shall not be effective unless it shall be set forth in writing and executed by both parties or their respective successors or assigns. 21.BINDING EFFECT; ASSIGNMENT, This Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, executors, administrators, successors and assigns. Buyer shall not assign its rights and interest hereunder without notice to Seller. 22.NOTICE. Any notice, demand, request or other communication which may or shall be given or servd by the parties shall be deemed to have been given: Orserved on the date the same is deposited in the United States Mail, registered or certified, postage prepaid and addressed 'as follows: SELLER: Michael Thomas Stewart 3813 38th Avenue North Minneapolis, MN 55406 BUYER: Economic Development Authority of Brooklyn Center Attn: Gary Eitel 63 01 Shingle Creek Parkway Brooklyn Center, MN 55430-2113 AGENT: Kennedy & Graven, Chartered Attn: Troy Gilchrist 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 23.BROKER COMMISSIONS. Buyer and Seller each represents and warrants to each other. that there is no broker involved in this transaction with whom either has negotiated or to whom the representing party has agreed to pay a broker commission or finder's fee in connection with, negotiations for purchase or sale of the Property. 24.SPECIFIC PERFORMANCE. This Agreement may be specifically enforced by the parties, provided that any action for specific enforcement is brought within six months after the date of the alleged breach. This paragraph is not intended to create an exclusive remedy for breach of this agreement; the parties reserve all other remedies available at law or in equity. 4937800 CBR BR305-145 5 IN WITNESS WHEREOF, the parties have executed this agreement as of the date written above. By Mc6e1 Thomas Stewart IIiuid Economic Development Authority of Brooklyn Center, Minnesota By: Its: President By: Its: Executive Director 4937800 CBRBR305-145 6 EXHIBIT A WAIVER OF RELOCATIONP I, the undersigned, acknowledge that I met with a representative of the Economic Development Authority of Brooklyn Center, Minnesota (EDA) on 20_. The representative, explained that in the event that the EDA acquires my residence located at 5315 James Avenue North, Brooklyn Center, Minnesota, I may be entitled to certain relocation benefits, in addition to the amount of money being paid to me to acquire my residence. These benefits may include: Moving Expenses: a.A payment for actual reasonable moving expenses; or b.A fixed payment determined in accordance with the applicable schedule approved by the Federal Highway Administration. 2. Replacement Housing Payment: A 180-day homeowner is eligible to receive a replacement housing payment to cover the following costs: a.If homeowner must pay more to buy a comparable replacement home than homeowner receives for the property, then homeowner may be compensated for the difference. b.Homeowner may be entitled to compensation for incidental and closing expenses related to the purchase of a decent, safe, and sanitary replacement home, such as recording fees, title insurance, appraisal and inspection fees. c. If homeowner must pay a higher interest rate on a mortgage to finance the purchase of a replacement home than the rate on the mortgage of the property, then homeowner may be entitled to compensation for increased mortgage interest costs. Other Relocation Assistance: This includes referrals and other assistance to help the owner(s) relocate to a comparable decent, safe and sanitary dwelling. These payments and services are required under the regulations of the Department of Housing and Urban Development (HUD). The owner(s) cannot be required to move from his/her home unless he/she is given reasonable opportunities to relocate to a comparable decent, safe and sanitary dwelling unit that he/she can afford. Finally, it was explained to me that the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 as amended, entitles me to these relocation benefits; and if I sign this agreement, I will be waiving those relocation benefits. After having these benefits explained to me, I agree to waive them. In signing this agreement, I acknowledge that no threats have been made to me, either expressly or by implication; and that the property will not be taken from me through condemnation. If after signing this agreement, I attempt to collect relocation benefits, I will have to prove that, contrary to what I am agreeing to in this agreement, my waiver of relocation benefits was not entered into voluntarily. This agreement is conditioned upon the Economic 4937800 CBR BR305-145 7 Development Authority of Brooklyn Center, Minnesota purchasing my property for the gross purchase price of $40,000.00. If this commitment to me is not fulfilled, the agreement is null and void. Date Michael Thomas Stewart, Seller WITNESS: 4937800 CBR BR305445 iLjT - VOW- - ONAW LO - p 1 ! IV jtr : r E - .r. :fl -r TTli)_-L L ) __ .. ,I.w •I 1) ICL •• 'JISIr. :4' k ML :E!-•' A•._1 II' - I• I ; - - I• - 4' : I i : '1-I -t I i•'. I r ,11 rN INI;ION H D R. 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BACKGROUND January 11, 2017 - fire resulted in extensive interior and exterior damage to home; structure later declared a hazardous building. Owner was aware of EDA's program of acquiring/removing blighted buildings; inquired if the EDA would be interested in possibly acquiring his property. Remove and Rebuild Program January 12, 2009 - EDA adopted Resolution No. 2009-02, a Resolution Establishing Housing Programs and Approving the Use of Funds from Tax Increment District No. 3 Housing Account, which authorized the Remove and Rebuild Program. Program was created to remove blighted, distressed, and unmarketable properties and to return these properties to an enhanced and compatible use with the neighborhood and consistent with zoning regulations and the City's Comprehensive Plan. Additionally, the program recognized that if an appropriate use for the land is not imminent, the property will be land banked until such time an appropriate use becomes available. Proposed Acquisition Property is an interior lot, with 50-ft. of frontage on James Avenue N. and 119.03 ft. Depth Rear access from a 30 foot wide alley. Tax records indicate residence was built in 1942. The 2017 property tax value is shown at $97,000. Bldg. Value = $62,000 Lot Value = $35,000 There are no special assessments levied on this property BUDGET ISSUES The acquisition of this blighted property for its assessed lot valuation of $20,000 is proposed to be funded from the Tax Increment District No. 3 Housing Account. The estimated cost of demolition and site restoration is approximately $15,000. The proceeds from the sales of this lot are considered to be future tax increment revenue for Tax Increment Financing District No. 3 Housing Account. Novak & Fleck Construction, the developer of 6 of the 7 Remove & Rebuild properties, has indicated that they would be interested in building a split entry home with a 2+ car garage on this property. The proposed single family home would meet the minimum side yard setback of 10 feet on the house side and 5 feet on the garage side. RECOMMENDATION Economic Development Authority adopt the Resolution Authorizing the Acquisition of Blighted Property in Connection with the Remove and Rebuild Program, for the property located at 5315 James Avenue North QUESTIONS?