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#3 Acquisition & demolition of 316 Linn (File Res. #2009-622) NEIGHBORHOOD SERVICES MEMORANDUM June 9, 2009 TO: City Council FROM: Kelly Lee, Neighborhood Development Specialist SUBJECT: Action on a Proposed Resolution Authorizing the Acquisition and Demolition of 316 Linn Street (File Res. 2009-622) Summary The Neighborhood Services Department is anticipating a Neighborhood Stabilization Program (NSP) grant award of $1,003,743 to acquire, rehabilitate, demolish and redevelop foreclosed and abandoned properties. The property located at 316 Linn is a foreclosed home that is consistent with the grant application and award criteria. Department Recommendation The Plan Commission and the Neighborhood Services Department recommend that the City Council support a motion to approve Resolution 2009-622 authorizing the purchase of the property located at 316 Linn Street, at an acquisition price not to exceed $5,000 as part of the Neighborhood Stabilization Grant Program (NSP). City Manager Recommendation The City Manager recommends approval. Suggested Motion I move to approve file resolution 2009-622 authorizing the purchase of 316 Linn Street, at an acquisition price not to exceed $5,000 as part of the Neighborhood Stabilization Grant Program. Background The Housing and Economic Recovery Act (HERA) of 2008 created the Neighborhood Stabilization Program, under which states, cities and counties will receive a total of $3.92 billion to acquire, rehabilitate, demolish, and redevelop foreclosed and abandoned residential properties. NSP funds are considered Community Development Block Grant (CDBG) funds. The U.S. Department of Housing and Urban Development (HUD) has made a total of $38,779,123 available to the State of Wisconsin and $9,187,465 to the City of Milwaukee. The City of Janesville anticipates an award of $1,003,743 . 1 In January 2009, the City Council authorized staff to apply for a Neighborhood Stabilization grant Program 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 Community Development Authority (CDA) and the Neighborhood Action Team assisted in formulating criteria for potential Neighborhood Stabilization Program grant projects, including: location in area of greatest need; located within either of the two redevelopment sites as identified in the City of Janesville Look West & Old Fourth Ward Neighborhood Revitalization Plan (Adopted th December 8, 2008); properties located along collector, major arterial streets, or minor arterial streets; properties located near schools or parks; properties th 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). The property located at 316 Linn Street is a foreclosed, two unit home in poor condition. On April 10, 2007 there was a kitchen fire at the property that resulted in a substantial amount of damage. It appeared that the owner of the property intended on repairing the fire damage when they pulled an electrical and a building permit in 2007; however repairs were never completed and the property was foreclosed in February of 2009. Building Services issued an Order to Raze or Repair in March of 2009. While official action could have been taken to raze the house at this time, Neighborhood Services felt that this was a good candidate for the Neighborhood Stabilization Program grant. The property is located in census tract 3, which has been identified as one of the areas of greatest need. The property is in walking distance to both parks and th schools. In addition, the property is identified in fair condition according to the 4 Ward and Look West Housing Condition Report. This was an exterior assessment of the property and did not take into account the interior condition. Staff has toured the property and found the interior of the property to been completely gutted. The Janesville Police Department has had 18 calls for service and Neighborhood Services has had 4 complaints at this address since 2006. The grant does not require the City of Janesville to have an appraisal done for properties with a purchase price under $25,000; however a qualified individual must provide a fair market estimate for the property. The assessment for the property is $29,600 which includes $16,000 for the lot and $13,500 for the improvement. The Neighborhood Services Department feels that it is in the best interest of the neighborhood to remove the fire damaged property that has been sitting vacant for the last two years and has reached an agreement with the bank for a purchase price of $5,000 contingent upon Plan Commission and City Council Approval. 2 The project would include acquisition and demolition of the property funded by the Neighborhood Stabilization Program (NSP) grant. The estimated cost for demolition is $12,500. Once the project is complete, the City of Janesville will explore the possibility of the dividing the lot between the two adjoining property owners or donating the lot to Habitat for Humanity for redevelopment with a single family home. The City has negotiated a conditional purchase price of $5,000. This falls within the limits established in the grant application. Analysis A. The property is zoned R-2, Limited General Residential. B. The project will include acquisition and demolition of the property funded through the Neighborhood Stabilization Program (NSP) grant. C. The project is consistent with the criteria outlined by the Community Development Authority and the Neighborhood Action Team. The home is located in census tract 3 which has been identified as one of the areas of greatest need in Janesville. The property is within walking distance of th both parks and schools. The property is listed as fair in the 4 Ward and Look West Housing Condition Report based on an exterior inspection. D. The project is consistent with the City of Janesville Look West & Old Fourth Ward Neighborhood Revitalization Plan as well as the City of Janesville Comprehensive Plan. Plan Commission Action Al Hulick, Development Specialist, presented the written staff report. There was a motion by Commissioner Hanewold with a second by Chairman Helgerson to forward the proposed acquisition to the City Council with a favorable recommendation noting that the Plan Commission has not reviewed the financial aspects of this transaction. The motion carried on a 5-0-1 vote with Commissioner Werner abstaining. cc: Eric Levitt, City Manager Jay Winzenz, Dir. of Administrative Services/Assistant City Manager Jennifer Petruzzello, Neighborhood Services Director 3 RESOLUTION NO. 2009-622 RESOLUTION AUTHORIZING THE ACQUISITION AND DEMOLITION OF REAL PROPERTY LOCATED AT 316 LINN STREET 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 City of Janesville has been awarded $1,003,743 through the Neighborhood Stabilization Program (NSP) grant; and WHEREAS , the Neighborhood Stabilization Program (NSP) grant must be used for acquisition, rehabilitation or demolition of foreclosed properties; and WHEREAS , the Community Development Authority (CDA) and the Neighborhood Action Team assisted in formulating criteria for potential Neighborhood Stabilization Program grant projects, including: location in area of greatest need; located within either of the two redevelopment sites as identified in the City of Janesville Look West & Old th Fourth Ward Neighborhood Revitalization Plan (Adopted December 8, 2008); properties located along collector, major arterial streets, or minor arterial streets; properties located near schools or parks; properties identified as poor or fair condition th on the 4 Ward and Look West Housing Condition Report (or of similar condition for census tracts 6 &10) WHEREAS , the City of Janesville Administration has negotiated an offer to purchase 316 Linn Street in the amount of Five Thousand dollars ($5,000); and WHEREAS , the Janesville Plan Commission has reviewed this proposed acquisition on July 6th, 2009 and found it to be consistent with long range City plans, but not commenting upon the financial aspects of the transaction; and WHEREAS , the funding source for the acquisition and demolition is the Neighborhood Stabilization Program (NSP) grant: 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. 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: Prepared by: