#6 Acquisition of 404 Johnson Street (File Res. #2009-654)
NEIGHBORHOOD SERVICES MEMORANDUM
November 25, 2009
TO: City Council
FROM: Jennifer Petruzzello, Neighborhood Services Director
SUBJECT: Action on a Proposed Resolution Authorizing the Acquisition of
Property at 404 Johnson Street (File Resolution #2009-654)
Summary
Five hundred Thousand ($500,000) dollars were included within the 2009 Note
Issue for neighborhood and downtown property acquisitions. Funding for
neighborhoods was included to acquire vacant and/or blighted properties in the
central city residential neighborhoods.
The property located at 404 Johnson Street is 2-unit rental property at the corner
of High Street and Johnson Street. It is located across the street from the Fourth
Ward Neighborhood Park. The residential units are in poor condition.
An offer to purchase the property has been negotiated in the amount of $30,000,
subject to City Council approval. The property would then be demolished at an
estimated cost of $12,000. One tenant would be eligible for relocation benefits
not to exceed $7,000. Options for the reuse of the property include leasing it to
adjoining property owners or the donation of the property to a non-profit for the
construction of a new single family home.
Department Recommendation
Neighborhood Services has viewed the property and site and recommends that
the property be acquired and demolished. Staff will continue to explore options
for the reuse of the site, and will come back to Council with a recommendation to
either lease the lot to adjoining property owners or donate the lot to a non-profit
for the construction of a single family home.
City Manager Recommendation
The City Manager concurs with the Department recommendation.
Suggested Motion
I move to approve File Resolution #2009-654 authorizing the purchase of real
property located at 404 Johnson Street for the purpose of blight elimination and
neighborhood stabilization as consistent with the City of Janesville Look West
and Old Fourth Ward Neighborhood Revitalization Plan.
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Background
The property located at 404 Johnson Street is 2-unit rental property at the corner
of High Street and Johnson Street. It is located across the street from the Fourth
Ward Neighborhood Park. The property is 49 feet wide by 120 feet deep, totaling
.135 acres. There is a 1792 square foot, 2-story, 2-unit home located on the lot.
There is no garage on the property. The residential units are in poor condition.
The 2008 assessed value for the lot and improvements is $56,500 with and
estimated fair market value of $68,953.
The owners of 404 Johnson Street have approached city staff requesting the City
consider purchasing their 2 unit rental property. The property owners recently
inherited the property and have found it to be in poor condition. They had heard
about the City’s Neighborhood Development efforts and contacted the City prior
to contacting a real estate agent, and they have agreed to sell the property for
$30,000. They would like to close on the property before the end of the year.
Because the property sits on an irregular shaped lot with regard to size and
width, and the property is in poor condition, Neighborhood Services proposes to
demolish the house and either lease the lot to adjoining property owners or
donate the property to Habitat for Humanity for the future construction of a single
family home. This project would be consistent with City goals for addressing
housing quality in the Look West and Old Fourth Ward Neighborhoods.
If rehabbed, numerous repairs would be needed In order to meet minimum
housing quality standards, including chipping and peeling lead paint, windows,
roof leaks, and electrical issues. The building’s asbestos siding is also pealing
and there appears to be significant structural issues. Staff believes that
demolition of this property is preferable to rehabilitation.
Acquisition and demolition of this property and relocation benefits is anticipated
to cost approximately $49,000 and is proposed to be funded through the 2009
note issue. The 2009 note issue included $500,000 in funding for vacant and/or
blighted projects. Funding is proposed in recognition of the major neighborhood
planning effort underway and the insufficient funds that are available under the
Community Development Block Grant (CDBG) Program. This would be the first
property funded under the 2009 note issue funding.
Analysis
This proposal addresses some critical issues of The Look West and Old Fourth
Ward Neighborhood Revitalization Plan, including:
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Eliminates a nuisance property (5 housing and nuisance complaints in the last
5 years and 44 calls for Police Service in the last 3 years)
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Increases the rate of home ownership by eliminating a 2 unit rental property
?
Improves conditions for neighboring property owners
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Eliminates poor quality housing
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Allows for the expansion of the Fourth Ward Neighborhood Park (if lease is
ultimately pursued rather than redevelopment)
Given the property condition and the local housing market, acquisition costs are
anticipated to be low relative to the potential benefits. Staff estimates the cost of
demolition will not exceed $12,000 and the cost of relocation will not exceed
$7,000; bringing the net cost for the project to a maximum cost of $49,000.
Our recent experience indicates that many residential properties are being
bought throughout Janesville and are being used as rental properties with no
improvements or minimal improvement being made to the properties. Janesville
does not currently have a shortage of affordable housing (we are hearing of a
15% vacancy rate); although it is arguable that we are experiencing a shortage of
quality affordable housing.
The Parks and Open Space Plan notes that properties adjacent to substandard
Neighborhood Parks should be reviewed for possible acquisition when they come
on the market. The Plan defines substandard neighborhood parks as those that
are less than two acres in size. The Fourth Ward Park is just over 2 acres at 2.05
acres. The expansion of Fourth Ward Park was identified within the City of
Janesville Look West and Old Fourth Ward Neighborhood Revitalization Plan
adopted in December of 2008. The plan indicated that both Fourth Ward and
Washington Parks are currently very small given their level of usage and
importance to the neighborhoods. The plan notes that the parks are essentially
surrounded by development, and expansion would need to be coordinated with a
careful, strategic effort to acquire surrounding blighted properties. Pursuing the
lease of the lot to adjoining property owners would facilitate the future expansion
of the park. As further support for this concept, the Fourth Ward Neighborhood
Plan, approved in 1991, included a land use development plan for the expansion
of the Fourth Ward Park. The proposed expansion included the triangle of land to
the north of the park, boarded by Park Street, Johnson Street, and High Street.
Staff has contacted Habitat for Humanity regarding their interest in vacant lots for
the redevelopment of housing. They indicated that they would in fact be
interested in acquiring a vacant lot in the City sometime after March of 2010.
Staff has contacted the adjoining property owners regarding their potential
interest in purchasing or leasing the lot once vacant. At this time, the owners are
not interested in purchasing the land, however, they are considering a lease
agreement.
Attachments: Property Data Information
Site Map
Fourth Ward Neighborhood Plan Map
cc: Eric Levitt, City Manager
Jay Winzenz, Assistant City Manager and Director of Administration
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RESOLUTION NO. 2009-654
RESOLUTION AUTHORIZING THE ACQUISITION OF REAL PROPERTY LOCATED AT
404 JOHNSON STREET
WHEREAS
, Wis. Stats. §§ 62.22 (1), 62.23 (17)(a), 62.23 (17)(b), 66.0101, 62.11(5), Chapter
32, and other pertinent Wisconsin Statutes permit the City’s acquisition, development,
ownership, protection, improvement, conservation, public use, demolition, disposition, and other
disposal of parkland, open space, riverfront properties, blighted properties, redevelopment, and
development properties; and
WHEREAS,
the City Council approved Five Hundred Thousand Dollars ($500,000) in the 2009
Note issue for neighborhood and downtown property acquisitions, in part to acquire vacant
and/or blighted properties in the central city residential neighborhoods; and
WHEREAS
, the acquisition of 404 Johnson Street for the purpose of blight elimination and
neighborhood stabilization is consistent with the City of Janesville Look West and Old Fourth
Ward Neighborhood Revitalization Plan adopted December 8, 2008, which identifies home and
property maintenance, home ownership and parks and open space among the critical issues for
neighborhood improvement; and
WHEREAS
, the Janesville Plan Commission has reviewed this proposed acquisition on
November 16, 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 City of Janesville Administration has negotiated an offer to purchase 404
Johnson Street in the amount of Thirty Thousand dollars ($30,000); and
WHEREAS
, the Council find this acquisition and proposed public use(s) in the best interest of
the City and of benefit to the public; and
WHEREAS
, the demolition cost is estimated at Twelve Thousand Dollars ($12,000); and
WHEREAS
, the relocation cost is estimated at less than Seven Thousand Dollars ($7,000); and
WHEREAS,
the funding source for the acquisition and demolition is the 2009 Note Issue.
NOW, THEREFORE, BE IT RESOLVED
by the Common Council of the City of Janesville that
the City’s acquisition of 404 Johnson Street in the amount of Thirty Thousand Dollars ($30,000)
for the above described public purpose(s) is hereby approved and authorized; the City Manager
and/or his designee(s) may acquire and close upon the City’s purchase of the Property from the
owner(s) 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:
Wald Klimczyk, City Attorney
Proposed by: Neighborhood Services Department
Prepared by: Neighborhood Services Director