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#3 Sale of 305 South Pearl Street (File Res. #2010-718) City Manager’s Office Memorandum July 12, 2010 TO: Janesville City Council FROM: Al Hulick, Management Analyst SUBJECT: Action on a proposed resolution authorizing the sale of property located at 305 South Pearl Street (File Resolution No. 2010-718). Staff Recommendation Staff and Plan Commission recommend that the City Council support a motion to approve File Resolution No. 2010-718 which authorizes the sale of land at 305 South Pearl Street. City Manager Recommendation The City Manager concurs with staff’s recommendation. Suggested Motion A motion to approve File Resolution No. 2010-718 which authorizes the sale of land located at 305 South Pearl Street for $5,000 to Mr. James L. Hager. Background The City of Janesville acquired the property located at 305 S. Pearl Street in September 2009. The subject site was developed with a vacant single-family residence that was built in approximately 1880 and was in very poor condition. The property is zoned M4-Central General District and is surrounded by industrial zoning on all four sides. The property is located directly adjoining an active railroad line to the north, and a single-family residence to the south. The property is approximately 0.25 acres and has an assessed land value of approximately $8,900. The property was purchased in September 2009 through the Rock County Tax Foreclosure program. Because the City had an interest in the property through unpaid taxes, the City had a first right to acquire the property before Rock County would sell the property at a public auction. The purchase price was set by Rock County in the amount equal to the delinquent taxes and interest, plus closing costs. The City’s portion of the outstanding taxes is then returned to the City. Therefore, the City acquired the property for $4,568.83 ($6,856.22 less $2,287.39 City’s share of taxes). The City used TIF funds to acquire the site. Due to the deteriorated, blighting condition of the building at the time of acquisition the building was demolished in the early spring of 2010. Analysis A. Because the subject property is zoned M4 it cannot be redeveloped as a residence without being rezoned. Staff would not support a rezoning to a residential district in this area. The property could be developed with a permitted M4 use. Therefore, the most appropriate uses of this property would be to sell it to an adjoining property owner, or left as public open space. B. If the property were to remain in public open space, there could be ongoing annual costs of up to $2,354 to maintain the site (mowing and sidewalk shoveling). Beyond public open space, the site has no other viable public purpose. Therefore, it would be ideal for the City to sell this property. C. The City of Janesville purchased the property for $4,568.83, incurred demolition costs of $9,638.80, and had an additional $3,543 in other miscellaneous expenses. Therefore, the City has a total of $17,750 invested in the property. D. When the City Administration contacted all adjoining property owners, only Mr. Hager of 309 S. Pearl expressed any interest in the purchasing the site. Realizing that the City has nearly $18,000 invested in a site, but only has assessed value of $8,900; it would be difficult to sell the property for the amount of the City’s investment in the site. However, also realizing that Mr. Hager is the only adjoining property owner to express interest in the site, Staff would not be in support of rezoning the site, the site has no viable public purpose, and there would be ongoing annual maintenance costs to keep the site in public open space, Staff anticipated negotiating with Mr. Hager at a price less than the City’s investment in the property. Staff believes that a public good has been provided by removing a blighting influence in the area, and that returning the property to the City’s tax rolls as opposed to incurring ongoing maintenance costs would be fiscally responsible. E. Therefore, the City Administration extended an offer to sell the property to Mr. Hager for $8,900 (the assessed value of the site). Mr. Hager countered with an offer of $5,000. Mr. Hager cites that the additional work needs to be done on the site to clear demolition debris, the options for building on the site are very limited, and recently 5 vacant lots in the neighborhood were sold at a Sheriff’s sale of $3,200. The City Administration understands Mr. Hager’s concerns with the site, and recommends that the City Council accept Mr. Hager’s counter offer of $5,000 and authorize the City Administration to execute the sale of property at 305 S. Pearl St. If the Council decides to not accept Mr. Hager’s offer, it is unlikely that another prospective buyer would come forward, and the City would continue to incur ongoing maintenance costs at the site. Plan Commission Action – 6 July 2010 Al Hulick, Management Analyst, presented a written staff report. Commissioner Werner asked what ongoing maintenance would be required on the site if the City were to hold the property. Hulick indicated that the lot would need to be mowed periodically throughout the year, and the sidewalk would need to be shoveled and maintained during the winter months. Chairperson Zolidis asked if the Administration considered selling the property before demolishing the structure on the site. Hulick indicated that the City did not contact prospective purchasers before demolition. Hulick noted that it would have been difficult to find a private property owner who would have been willing to take on the liability and cost of demolishing the existing structure. Hulick also noted that the structure was extremely dilapidated and nonconforming. Hulick stated that the City was in the best position to remove this blighting influence and decrease the nonconformity in this area, and therefore, wanted to ensure that it was mitigated properly before marketing the site for sale. Commissioner Helgerson asked how long it would take before the costs would be fully recovered after this transaction. Hulick indicated that he did not have an exact number of years, but that it may take several due to the properties low taxable value. Commissioner Werner noted that based on the properties undesirable location, he was in support of the sale. Werner noted that if the location was different, he would consider holding the property. A motion was made by Commissioner Werner with a second by Commissioner Adams to forward the sale of 305 South Pearl Street to the City Council with a favorable recommendation noting that the Plan Commission had not reviewed the financial aspects of the transaction. The motion passed on a 6-0-0 vote. cc: Jacob Winzenz Eric Levitt q Ô»¹»²¼ ÍËÞÖÛÝÌ Í×ÌÛ Ü¿¬»æ íñïïñïð Í½¿´»æ ïþã ïëðù Ü®¿©² Þ§æ Þò Þ´«³»® ÔÑÝßÌ×ÑÒ ÓßÐ Ý×ÌÇ ÑÚ ÖßÒÛÍÊ×ÔÔÛ íðë Íò Ð»¿®´ Í¬ò ÓßÐ ï ÐÔßÒÒ×ÒÙ ÍÛÎÊ×ÝÛÍ ÍæÐ®±¶»½¬ÄÐ´¿²²·²¹ÄÓ·½ÄíðëÍÐ»¿®´ò³¨¼ RESOLUTION NO. 2010 – 718 A resolution authorizing the City Manager to proceed with the sale of surplus property located at 305 South Pearl Street. WHEREAS, the City of Janesville owns the following described parcel of real property: SMITH'S ADD. LOT 14 & S.1/2 VACATED W. HOLMES ST. EX.RR. ROW BLK 19 DAF:Pt SE1/4, Sec 35, T3N, R12E, 4th PM, City of Janesville, Rock Co, WI JC6107333 WHEREAS , The City of Janesville acquired the property located at 305 S. Pearl Street in September 2009 though the Rock County Tax Foreclosure program with TIF District No. 9 funds. The City’s portion of the outstanding taxes is then returned to the City. Therefore, the City acquired the property for $4,568.83 ($6,856.22 less $2,287.39 City’s share of taxes); and WHEREAS, the proceeds from the sale of this property will be returned to TIF District No. 9 funds. WHEREAS , this property is now surplus and no longer needed for any public purpose; and. WHEREAS , the City of Janesville has negotiated an agreement to sell the property to Mr. James L. Hager for $5,000.00; and WHEREAS , the sale of this surplus property is in the best interest of and benefit to the City and community; and WHEREAS , the Plan Commission has reviewed this land sale at their July 2, 2010 meeting and found the sale to be consistent with established City plans and recommended that the City Council proceed with the sale of this property, but further noted that the Plan Commission had not reviewed the financial aspects of this transaction. NOW THEREFORE BE IT RESOLVED BY THE COMMON COUNCIL of the City of Janesville that the City Manager and others on his behalf are authorized to sell and convey this parcel of surplus property to James L. Hager for $5,000.00 on behalf of the City of Janesville; and to negotiate and execute such documents, papers, and forms as the City Manager may, from time to time, determine necessary and/or desirable to effectuate this transaction and the intent of this Resolution; and BE IT FURTHER RESOLVED that the City Manager and his designee(s) are hereby authorized to take whatever other actions and to make whatever other changes that may find necessary and/or desirable to effectuate this land transaction. 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 Wald Klimczyk Proposed by: City Manager’s Office Prepared by: City Manager’s Office