#4 Acquisition process for Neighborhood Stabilization Program (File Res. #2009-592)
NEIGHBORHOOD SERVICES MEMORANDUM
April 10, 2009
TO: City Council
FROM: Jennifer Petruzzello, Neighborhood Services Director
SUBJECT: Resolution Establishing the Acquisition Process for Acquiring
Properties under the Neighborhood Stabilization Program (File Res.
#2009-592)
Summary
The Neighborhood Services Department has prepared a resolution for City
Council consideration, which would stream-line the process for acquiring
properties under the Neighborhood Stabilization Program (NSP). Specifically, the
resolution recognizes that there are program criteria, which must be met under
the NSP grant program. The resolution authorizes staff to negotiate with banks
directly without holding a closed session discussion with the Common Council
prior to negotiations. Offers to purchase would then be made contingent upon
review by the Plan Commission and approval by the City Council in open
session.
Department Recommendation
The Neighborhood Services Department recommends that the Council approve
Resolution # 2009-592, which establishes the acquisition process for acquiring
properties under the Neighborhood Stabilization Program.
Suggested Motion
I move to approve file resolution # 2009-592, which establishes the acquisition
process for acquiring properties under the Neighborhood Stabilization Program.
City Manager recommendation:
The City Manager recommends the above approach in order to expedite the
purchase of foreclosed properties while staying within the criteria guidelines.
Background
In January 2009, the City Council authorized staff to apply for a Neighborhood
Stabilization Program (NSP) grant through the State of Wisconsin Department of
Commerce. This program allows municipalities and qualified non-profit
organizations to acquire foreclosed properties for the purpose of rehabilitation,
redevelopment, or demolition.
The City is awaiting its official notice from the State, however, results of a
regional allocation meeting indicate the City will receive about $918,000 in
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housing funds and $69,000 in administrative funds for this program. This level of
funding should allow for the rehabilitation of six single family and rental projects,
and the demolition of four structures (2 lots to be donated for redevelopment).
The intent of the NSP programs is to move quickly to stabilize neighborhoods
that are impacted by the falling values and declining property conditions resulting
from an increase in the number of foreclosures. All properties must be identified
by September 20, 2010. However, the State will begin monitoring communities
for progress within three months and may reallocate funds if sufficient progress is
not shown. It is also in the City’s best interest to proceed quickly because funds
that are returned to the program (through resale to income eligible houses) can
be re-used for up to four years.
NSP program criteria require a minimum discount of 15% of a current appraised
value. Program criteria also require that a minimum of 30% of the grant dollars
be used to benefit individuals at or below 50% of County Median Income
($32,500 for a family of 4). Projects meeting this criterion could include single
family rehab or rental rehab
The City’s grant application indicates that following additional criteria will be used
to evaluate projects:
1. Located within census tracts 3, 4, 6 or 10. (Including the Historic Fourth
Ward and Look West Neighborhoods, the area directly east and south of
the General Motors Plant, and the area to the north of the downtown.
2. Located within one of two redevelopment sites as identified in the City of
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Janesville’s Look West and Old 4 Ward Neighborhood Revitalization
Plan.
3. Located along collector, major arterial streets, or minor arterial streets.
4. Located near schools or parks.
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5. Properties identified as poor or fair condition on the 4 Ward and Look
West Housing Condition Report (or of similar condition for census tracts 6
& 10).
6. Potential for density reduction.
These criteria were developed through communications with the Neighborhood
Action Teams, Community Development Authority and City Council.
Analysis
With the clearly defined evaluation criteria above, the advantages of resolution #
2009-592 include more efficient program administration and quicker approval
process. Program administration includes a reduction in management reporting,
agenda coordination and City Council review time. A quicker approval process
means that the City will be able to make an offer to purchase prior to City Council
review of each individual acquisition. For many of these property acquisitions the
City will need to move quickly in making an offer to purchase or risk losing the
property to other interested parties.
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The City Council would forgo its opportunity to discuss further negotiating
strategy on a property by property basis. However, eliminating the closed session
does not commit the City Council to purchase a property at a staff negotiated
price because the offer will be contingent upon Plan Commission review and City
Council Approval.
cc: Eric Levitt, City Manager
Jay Winzenz, Director of Administrative Services
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RESOLUTION NO. 2009-592
A RESOLUTION ESTABLISHING THE ACQUISITION PROCESS FOR ACQUIRING
PROPERTIES UNDER THE NEIGHBORHOOD STABILIZATION PROGRAM (NSP)
WHEREAS
, the Housing and Economic Recovery Act (HERA) of 2008 created the
Neighborhood Stabilization Program (NSP) to acquire, rehabilitate, demolish, and
redevelop foreclosed and abandoned residential properties that might otherwise
become sources of abandonment and blight within their communities; and
WHEREAS,
the City Council approved Resolution No. 2009-571 on January 12, 2009,
authorizing staff to submit an application to the Wisconsin Department of Commerce for
Neighborhood Stabilization Program (NSP) grant funding; and
WHEREAS
, the intent of NSP grant funding is to quickly identify foreclosed properties
that will be acquired with all properties being identified within 18 months of the State's
award from the Department of Housing and Urban Development; and
WHEREAS
, the NSP program establishes a maximum amount that may be paid to
acquire a property based upon its appraised value; and
WHEREAS
, the current council practice relative to property acquisitions requires a
closed session discussion before staff makes an offer to purchase, and before the
acquisition is reviewed by the Plan Commission and Common Council in open session;
and
WHEREAS
, the City Council recognizes that grant criteria will determine the
negotiation strategy for property acquisitions under the NSP Program.
NOW, THEREFORE BE IT RESOLVED
by the Common Council of the City of
Janesville that it authorizes and directs the Neighborhood Services Director, or her
designee, to enter into negotiations on the subject properties without holding closed
session discussion; and
BE IT FURTHER RESOLVED
, by the Common Council that any offer to acquire
property will be made contingent upon final approval of the Plan Commission and City
Council in open session; and
BE IT FURTHER RESOLVED,
that the Neighborhood Services Director, and her
designee, is hereby authorized to negotiate, draft, prepare, execute, file and modify
such other documents, papers and agreements ancillary and/or pertaining thereto and,
from time to time, to take and/or make whatever other minor actions and/or minor
modifications to the above described agreements as the Neighborhood Services
Director and/or her designee may deem necessary and/or desirable to effectuate the
purposes of such agreements and the intent of this resolution.
ADOPTED:
Second by:
APPROVED:
Councilmember Aye Nay Pass Absent
Brunner
Perrotto
Eric J. Levitt, City Manager
McDonald
Rashkin
ATTEST:
Steeber
Truman
Voskuil
Jean Ann Wulf, City Clerk-Treasurer
APPROVED AS TO FORM:
City Attorney
Proposed by: Neighborhood Services Director
Prepared by: Neighborhood Services Director