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#3 Authorize acquisition of 1110 Hamilton (File Res. #2010-669) NEIGHBORHOOD SERVICES MEMORANDUM January 12, 2010 TO: City Council FROM: Jennifer Petruzzello, Neighborhood Services Director SUBJECT: Action on a Proposed Resolution Authorizing the Acquisition of Property at 1110 Hamilton Avenue (File Resolution #2010-669) Summary The property located at 1110 Hamilton Avenue was substantially damaged during the June 2008 Flood event. The property had a pre-flood value appraised value of $80,000 and a post-flood appraised value of $0. The property is located within the flood plain in the Mole Sadler Neighborhood, where the City Council has authorized the purchase of eleven other properties. The City has attempted to obtain grant funding to acquire this property under the Hazard Mitigation Grant Program and the Community Development Block Grant Emergency Assistance Program (CDBG-EAP), but was denied due to concerns over ground water contamination and the fact that the property was not the owner’s primary residence. The City has submitted a request for additional funding under the CDBG-EAP Program to pay for the cost of demolishing the structures at 1110 Hamilton Avenue and completing site restoration work. An offer to purchase the property has been negotiated in the amount of $30,000 subject to City Council approval and subject to grant funding being approved to cover the cost of demolition and site restoration. Department Recommendation Neighborhood Services is recommending that the Council authorize the purchase of 1110 Hamilton Avenue at a price of $30,000. The recommended source of funding for this acquisition and demolition would be: $15,000 in 2009 note issue funds for neighborhood property acquisitions and $15,000 in parkland acquisition funds. City Manager Recommendation The City Manager recommends approval. Suggested Motion I move to approve File Resolution #2010-669 authorizing the purchase of real property located at 1110 Hamilton Avenue for the purpose of flood hazard mitigation, blight elimination and parkland development contingent upon CDBG- 1 EAP grant funding being approved by the Wisconsin Department of Commerce for demolition and site restoration costs. Background The property located at 1110 Hamilton Ave. is a single family rental property located at the corner of Joseph St. and Hamilton Ave. The property owners had used this property as their primary residence until approximately three months prior to the flood, during which time they had converted it to rental property. The property is 66 feet wide by 112 feet deep, totaling 7,392 sf. The residence is a 1930 cottage style home on a concrete slab, totaling 576 sf. The property was in very good condition before the flood, with recent remodeling. The pre-flood appraisal for the property is $80,000. The 2009 assessed value (after flood) for the lot and improvements is $12,200 with and estimated fair market value of $14,889. The post-flood appraisal indicated a value of $0. The site is surrounded by flood plain, and the home cannot be rebuilt at this time because there is not dry land access to the site. The damaged, now blighted, existing improvements are considered a liability to the property’s value. The proposed acquisition of this flood damaged property is consistent with the City’s goals of mitigating flood risk in a manner that will reduce or eliminate future disaster damages to property in flood prone areas. Future flood damages will be eliminated through acquisition of the residential structures and the conversion of the properties to public greenspace. The property is located along the Rock River adjacent to or near public parkland, bike and pedestrian trail facilities and Rock River parkway lands. Acquisition is consistent with the City’s plans and policy for continued riverfront acquisition and preservation. The acquisition furthers the Parks and Open Space Plan which states that land along the Rock River should continue to be acquired to preserve as much shoreline and abutting property as possible to enable the City to increase public access to the river, control buildings, run-off, erosion and filling, improve aesthetics and decrease development pressures on the floodplain of the river. Upon acquisition and demolition of the structures, ownership of the properties will be retained by the city who will ensure long-term maintenance in an open space use. On July 28, 2008 the City Council authorized the Administration to apply for the Hazard Mitigation Grant Program (HMGP). The HMGP assists state and local communities in implementing long-term hazard mitigation measures following major disaster declaration. The City of Janesville submitted twelve properties for review under this program. On July 1st, 2009, Wisconsin Emergency Management contacted staff to inform them that nine of the twelve properties had been approved by FEMA; however three properties were removed from the application because of concerns about ground water contamination, including nd 1110 Hamilton Ave. On November 2, 2009, the City of Janesville received an official denial from FEMA regarding these three properties. The sites were 2 identified as contaminated during the environmental review process. The Department of Natural Resources has written a clearance letter for these properties citing natural attenuation as the solution to the contamination, meaning that no clean-up will be required. This contamination was caused by the former Riverside Plating Co., and was not caused by the current property owner. The Community Development Block Grant-Emergency Assistance Program (CDBG-EAP) can be used to fund the acquisition of properties damaged by the 2008 flood that were owner occupied by a low to moderate income household. The City of Janesville has submitted an amendment to the original CDBG-EAP contract with the Wisconsin Department of Commerce and anticipates funding for two of the three properties that were denied by FEMA. CDBG-EAP funding may also be used to acquire rental property at current value ($0), demolish the structure and restore the site. Properties purchased under the HMGP and owner occupied properties purchased under the CDBG-EAP program were purchased at a cost equal to the pre-flood appraisal minus any duplication of benefits including insurance and FEMA assistance. If FEMA had funded the acquisition of this property under the HMGP, the purchase price would have been $50,419 plus closing costs. The participation in this “Buy-Out” is completely voluntary and the citizens could choose to terminate negotiations with the city at any time. However, this particular property is not able to be re-built upon because it does not have dry land access. If a property is damaged greater than 50% of its equalized assessed value, steps must be taken to bring the property into compliance with current floodplain requirements. Requirements related to floor and fill elevations must be addressed by the individual property owner. In addition to these steps, contiguous dry land access must be provided. If dry land access cannot be provided, written assurance must be obtained from the police and fire chief that they can provide emergency services in a flood event or an emergency evacuation plan must be developed. In August, the Council voted not to prepare an emergency evacuation plan due primarily to safety concerns. The City currently has parkland acquisition funds in the amount of: $151,729. The purpose of the Parkland Acquisition fund is to finance improvements, acquisitions/purchases, changes or additions to any public park lands; neighborhood, regional or community parks; or greenbelts. This property is in the neighborhood bordered by Riverside Park to the north and the Rock River to the east. Fifteen thousand dollars ($15,000) in parkland acquisition funds is proposed for the purchase of 1110 Hamilton. The 2009 note issue included $500,000 in funding to acquire vacant and/or blighted neighborhood and downtown properties and demolish these properties. Due to the extensive flood damage to this property, it is now in a blighted 3 condition. Fifteen thousand dollars ($15,000) in capital funding is proposed for the purchase of 1110 Hamilton. Analysis Advantages of the proposed acquisition include: 1. Consistent with the City’s goals of mitigating flood risk in a manner that will reduce or eliminate future disaster damages to property in flood prone areas. 2. Consistent with the Parks and Open Space Plan which states that land along the Rock River should continue to be acquired to preserve as much shoreline and abutting property as possible to enable the City to increase public access to the river, control buildings, run-off, erosion and filling, improve aesthetics and decrease development pressures on the floodplain of the river. 3. City purchase of the property allows the property owners to receive compensation for their property. An offer to purchase in the amount of $30,000 is greater than the current appraised value of $0, greater than the estimated fair market value of $14,889, but is less than the $50,419 they would have received if funded under the grant programs. 4. Results in the elimination of a flood-damaged, now blighted property located within the Mole Sadler Neighborhood. Disadvantages of the proposed acquisition include: 1. The City did not provide a local share to acquire the other flood damaged properties. The $30,000 acquisition cost will utilize parkland acquisition funds and capital funds that could have been used for other properties. 2. Since the current owners are unable to rebuild at this location, they would be responsible for demolishing the property and maintaining the property at their expense should the City not acquire the property. Attachments: Map and GVS Property Data Information cc: Eric Levitt, City Manager Jay Winzenz, Assistant City Manager and Director of Administration 4 RESOLUTION NO. 2010-669 RESOLUTION AUTHORIZING THE ACQUISITION OF REAL PROPERTY LOCATED AT 1110 HAMILTON AVENUE 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 has a Parkland Acquisition Fund with a balance of $151,729, which is available to finance improvements, acquisitions/purchases, changes or additions to any public park lands; neighborhood, regional or community parks; or greenbelts; and WHEREAS, the City Council approved Five Hundred Thousand Dollars ($500,000) in the 2009 Note issue for vacant and/or blighted neighborhood and downtown property acquisitions; and WHEREAS , the acquisition is consistent with the City’s goals of mitigating flood risk in a manner that will reduce or eliminate future disaster damages to property in flood prone areas; and WHEREAS, the acquisition is consistent with the Parks and Open Space Plan which states that land along the Rock River should continue to be acquired to preserve as much shoreline and abutting property as possible to enable the City to increase public access to the river, control buildings, run-off, erosion and filling, improve aesthetics and decrease development pressures on the floodplain of the river; and WHEREAS, the acquisition and demolition of 1110 Hamilton Avenue will eliminate a flood damaged, blighted property in the Mole Sadler Neighborhood; and WHEREAS , the Janesville Plan Commission has reviewed this proposed acquisition on December 17, 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 1110 Hamilton Avenue 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 Six Thousand Eight Hundred Dollars ($6,800) and will be funded through the Community Development Block Grant Emergency Assistance Program; and WHEREAS, the funding source for the acquisition is $15,000 Parkland Acquisition Funds, $15,000 2009 Note Issue. NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Janesville that the City’s acquisition of 1110 Hamilton Avenue 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 îðïð îððç îððì îððí ïçîð îððï ïçîê ïçîï ïçïì ïçïì ïçðç ïçðç ïçïð ïîðè ïïîîïçðí Î±½µ Î·ª»® ïïðç ïîïé ïîïï ïîðë ïèîî ïîîç ïèîï ïîîí ïèïë ïèïë ïèðç ïèðç ïèðí ïèðí ïèðì ïéîé ïéîé ïéîî ïéïë ïéïë ïìðð ïéðè ïéðç ïéïï ïïïê ïïïð ïéðð ïêðê q Ô»¹»²¼ Ý·¬§óÑ©²»¼ Ð®±°»®¬·» Ý±«²½·´ ß°°®±ª»¼ Ð«®½¸¿» Ü¿¬»æ ïñïîñïð ïïïð Ø¿³·´¬±² ßª»²«» Ó¿° Ý±±®¼·²¿¬»æ Õóïè ÔÑÝßÌ×ÑÒ ÓßÐ Ý×ÌÇ ÑÚ ÖßÒÛÍÊ×ÔÔÛ ÓßÐ ï ïïïð Ø¿³·´¬±² ßª»²«» ÐÔßÒÒ×ÒÙ ÍÛÎÊ×ÝÛÍ