#3 Authorize purchase of 614 West Court Street (File Res. #2009-610)
Economic Development Memorandum
Date: June 2, 2009
TO: City Council
FROM: Doug Venable, Director of Economic Development
SUBJECT: Action on a Resolution Approving an Offer to Purchase and Authorizing
the City Manager to Purchase 614 W. Court St. for $45,000 Using Funds
from TIF No. 9 – (File Resolution 2009 – 610)
I. Summary
The Project Plan for TIF No. 9 envisioned the purchase and demolition of property
within TIF No. 9 to eliminate blight and to assemble sites for redevelopment. Staff has
negotiated an offer to purchase a blighted property located at 614 W. Court St. The
property is improved by a vacant 2-unit dwelling and has an assessed value of $65,500.
The inside of the building has been damaged by frozen water pipes and has continued
to deteriorate.
The current owner has accepted the City’s offer to purchase this property for a
purchase price of $45,000. If the City Council approves the purchase of the property,
the structures on the property will be demolished at an estimated cost of $20,000. The
resulting 3,745 sf lot can be used to add an additional 7 parking stalls to the adjacent
City-owned High St. Parking Lot. This property may also be used to provide parking for
buses that bring tour groups to the Armory Dinner Theatre.
II. Recommendation
The Plan Commission reviewed the purchase of 614 W. Court St. at their meeting
on June 1, 2009 and found the purchase to be consistent with City plans, but did not
comment on the financial aspects of the transaction.
Staff recommends that the Council adopt File Resolution 2009 -610, approving the
offer to purchase 614 W. Court St.
III. Suggested Motion
Move to adopt File Resolution No. 2009 – 610 approving the offer to purchase
property at 614 W. Court St. for a purchase price of $45,000 with funding to come from
TIF No. 9.
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Economic Development Department Box 5005 Janesville, WI 53547-5005 755-3180
614 W. Court St.
June 2, 2009
Page 2
IV. City Manager Recommendation
It is my understanding that the purchase of this property will extend the TIF time frame
an additional 2 years.
V. Background
In 1992, the City created TIF No. 9 to stimulate the redevelopment of the W.
Milwaukee St. corridor. The Project Plan envisioned key anchor projects like the
redevelopment of buildings such as the Armory and Bennison & Lane Bakery
(Speakeasy). In addition, the Project Plan envisioned using the positive TIF increments
from these redevelopment projects to purchase and demolish blighted structures
throughout the TIF boundaries to slowly acquire future redevelopment sites.
The property at 614 W. Court St. is a 3,745 SF lot improved with a two-story, two-
unit dwelling and an outbuilding used as a garage. The property has an assessed value
of $65,500. The inside of the building was damaged several years ago when water
pipes froze, leaking water from the second floor down through the first floor.
Although the owner has tried to repair the damage, the property has remained vacant
and the structure has continued to deteriorate. The owner purchased the property in
2004 for $92,000 and in 2007, listed the property for sale at an asking price of $99,000.
Since then, the asking price has fallen with the most recent listing at an asking price of
$69,000.
The property is adjacent to the existing City-owned High Street Parking Lot. If the
property were purchased, the City could add 7 parking stalls to this lot. In addition, the
property could be used in the future to provide parking for 2 -3 tour buses that bring
patrons to shows at the Armory.
VI. Offer to Purchase
Recognizing the poor condition of the property, the City negotiated an Offer to
Purchase 614 W. Court St. for a purchase price of $45,000. The Engineering
Department estimates it will cost $20,000 to demolish the structures and restore the site
with topsoil and grass. Funding for the acquisition, demolition and site restoration can
come from TIF No. 9.
Since the property is vacant and has been unoccupied for the past 2 years, there
are no relocation costs associated with this purchase.
As of December 31, 2008, TIF No. 9 had total capital expenditures of $780,200
compared to the Project Plan estimate of $865,000. The TIF district had a negative
fund balance of $123,560 with $55,000 in outstanding debt. However, TIF No. 9
receives approximately $50,000 per year in TIF incremental revenues and is projected
614 W. Court St.
June 2, 2009
Page 2
to break even by 2012. If the Council approves the offer to purchase, the additional
$65,000 in capital expenditures will move the TIF breakeven back by two years to 2014.
Doug Venable
cc Mr. Jay Winzenz, Director of Administrative Services
Mr. Eric Levitt, City Manager
Attachments: Resolution 2009 – 610
Plan Commission Report
j:\development\economic development\tif districts\tif 9\614 wcourt st council memo.doc
Resolution 2009 – 610
A Resolution Approving an Offer to Purchase and Authorizing the City Manager
to Purchase Property Located at 614 W. Court Street for Redevelopment
Purposes Using Funds from TIF No. 9
WHEREAS
, Wis. Stats. §§ 62.22 (1), 62.23 (17) (a), 62.23 (17) (b), 66.0101, 62.11(5)
and Chapter 32 and other pertinent Wisconsin Statutes permit the City’s acquisition,
development, ownership, protection, and conservation of parkland, open space,
riverfront properties, and development properties; and
WHEREAS
, the Common Council have adopted a Project Plan for Tax Incremental
Finance District No. 9, which calls for the purchase of blighted properties for potential
redevelopment or green space; and
WHEREAS
, the Common Council hereby finds that such uses and acquisition constitute
public purpose(s) that benefit the community and promote the health, welfare, safety
and best interests of the City, its residents, businesses and visitors; and
WHEREAS
, the City of Janesville Administration has negotiated with the owner an offer
to purchase 614 W. Court St. (the “Property”) dated the day of May 13, 2009 in the
amount $45,000; and
WHEREAS
, the funding for this acquisition and building demolition will be provided by
Tax Incremental Finance District No. 9; and
WHEREAS
, the Janesville Plan Commission has reviewed this proposed acquisition on
June 1, 2009 and found it to be consistent with long range City plans, but not
commenting upon the financial aspects of the transaction:
NOW, THEREFORE, BE IT RESOLVED
by the Common Council of the City of
Janesville that they hereby approve and authorize the City Manager and/or his
designee(s) to acquire and close upon the City’s purchase of the Property from the
owners on behalf of the City; and
BE IT FURTHER RESOLVED
, that the City Manager and/or his designee(s) on behalf
of the City of Janesville is/are hereby authorized and empowered to negotiate, draft,
modify, review, execute, and enter into additional agreements, record, file and/or make
minor modifications and/or amendments to any and all documents, papers, forms, and
agreements, and to take whatever other actions as the City Manager may determine,
from time to time and at any time, necessary and/or desirable to effectuate the intent of
this resolution and/or the public good.
Resolution 2009 - 610
Page 2
ADOPTED:
Motion by:
Second by:
APPROVED:
Councilmember Aye Nay Pass Absent
Brunner
McDonald
Eric J. Levitt, City Manager
Perrotto
Rashkin
ATTEST:
Steeber
Truman
Voskuil
Jean Ann Wulf, City Clerk-Treasurer
APPROVED AS TO FORM:
City Attorney
Proposed by: City Manager
Prepared by: Director of Economic Development
Community Development Department Memorandum
June 8, 2009
TO: Janesville City Council
FROM: Al Hulick, Development Specialist
SUBJECT: Acquisition of 614 West Court Street
I. RECOMMENDATION
The Plan Commission and Community Development Department recommend
that the City Council support a motion to find the proposed acquisition of 614
West Court Street consistent with established City plans and further recommend
that the City Council proceed with the land acquisition. The City Council should
be advised that the Plan Commission has not reviewed the financial aspects of
this transaction.
II. REQUEST
The City Administration has negotiated an offer to purchase the property located
at 614 West Court Street for $45,000. The property is approximately 3,800 s.f. in
size, zoned O2-Central Office/Residence District, and developed with a vacant
two-story, two-family residence. The property is located adjacent to the High
Street public parking lot which is primarily used by the Armory Dinner Theatre
and the ECHO Food Pantry. If the existing structure was removed, the property
could be incorporated into the High Street public parking lot and an additional 7
parking spaces could be constructed. In addition, the lot could be used to
provide 2 to 3 bus parking spaces at some point in the future. The subject
property is designated as a non-contributing structure in the High Street
Entertainment District in the Downtown Vision & Strategy. Staff believes that the
acquisition and redevelopment of this blighted property is consistent with the
Downtown Vision & Strategy. State Statues require that Plan Commission review
the proposed acquisition to ensure consistency with established City plans.
III. ANALYSIS
A. The owner of the property located at 614 West Court Street contacted the
City Administration to see if the City might be interested in purchasing his
property in early 2008. At that time, the asking price was too high and the
Council directed staff to not exceed $50,000 for the purchase price. The City
Administration provided a counter-offer of $45,000, which was rejected.
Since that time, the property has gone into foreclosure and the bank has
agreed to sell the building in a short sale for $45,000 contingent on Council
approval. The property has an assessed value of $65,600 and an equalized
value of $80,100. The building is vacant so no relocation benefits would be
required. Additionally the staff is aware of a severe mold problem within the
building, so any reuse of the site would require considerable renovation and
investment. Demolition of the property is estimated at $16,000.
B. The acquisition and redevelopment of the property as a parking lot would be
paid for through TIF No. 9 funds. The acquisition and redevelopment of this
property as a public parking lot is consistent with the TIF No. 9 Project Plan.
C. The proposed property acquisition is consistent with established City plans as
described below:
a. The purchase is consistent with the recently adopted Downtown Vision
and Strategy. The Downtown Vision & Strategy identifies this property
as a non-contributing building within the High Street Entertainment
District. The plan specifically advocates for additional public parking
along the North High Street corridor. The acquisition and demolition of
this property would remove a blighting influence on the surrounding
neighborhood, and provides additional parking in an area that lacks
public parking during peak event times. The City Administration
believes that the removal of this building will be a positive step toward
cleaning up the area while providing additional needed parking.
b. The TIF No. 9 Project Plan specifically calls for the purchase and
demolition of blighted properties.
D. State Statutes require that the Plan Commission review any proposed acquisition
of land to determine if it is consistent with established City plans. Based on
staff’s analysis, this purchase is consistent with the Downtown Vision and
Strategy.
IV. PLAN COMMISSION ACTION – 1 JUNE 2009
Al Hulick, Development Specialist, presented the written staff report.
Commissioner Zolidis asked if staff was aware of any environmental issues or
historical significance with the site. Hulick indicated that the Downtown Vision
and Strategy Plan specifically identifies the site as a “non-contributing” structure
and therefore lacks any historical significance. Hulick also indicated that staff
has researched the site and is not aware of any environmental concerns.
Commissioner Hanewold made a motion, seconded by Commissioner Zolidis, to
find the proposed acquisition of 614 West Court Street consistent with
established City plans and further recommend that the City Council should
proceed with the land acquisition noting that the Plan Commission has not
reviewed the financial aspects of the transaction. The motion carried on a 4-0-0
vote.
cc: Brad Cantrell
Duane Cherek