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#06 Authorize acquisition and demolition of 527 North Pearl (File Res. #2011-804) NEIGHBORHOOD SERVICES MEMORANDUM May 2, 2011 TO: City Council FROM: Kelly Lee, Neighborhood Development Specialist SUBJECT: Action on a Proposed Resolution Authorizing the Acquisition and Demolition of Property at 527 N. Pearl Street (File Resolution 2011- 804) Summary A total of seven hundred Thousand ($700,000) dollars were included within the 2009 and 2010 Note Issues for neighborhood and downtown property acquisitions. Funding for neighborhoods was included to acquire vacant and/or blighted properties in the central city residential neighborhoods and the downtown area. The property located at 527 N. Pearl Street is a vacant single family home located in Census Tract 4 within the Look West Neighborhood. The property is an owner occupied dwelling that was listed for sale on January 17, 2011, at an asking price of $41,000. The structure is in very poor condition and staff recommends demolition of the property after acquisition. An offer to purchase the property has been negotiated in the amount of $16,000, following a property appraisal and subject to City Council approval. The property would then be demolished at an estimated cost of $7,500. The site would be restored as green space for the time being and offered to a not for profit for construction of a new single family home or offered for sale to adjoining property owners. Any new construction would be reviewed by staff for compatible neighborhood design and all future sales transactions would return to council for approval. Department Recommendation Neighborhood Services Staff is recommending that the City acquire the residential property located at 527 N. Pearl Street under the Neighborhood and Downtown Blight Elimination Program for the purpose of blight elimination and neighborhood stabilization. City Manager Recommendation The City Manager concurs with the recommendation. Suggested Motion I move to approve File Resolution #2011-804 authorizing the purchase and demolition of real property located at 527 N. Pearl Street for the purpose of blight elimination and neighborhood stabilization as consistent with the City of 1 Janesville Comprehensive Plan and Look West and Old Fourth Ward Neighborhood Revitalization Plan. Background The property located at 527 N. Pearl is developed with a two-story single family residence built in 1900. The property is zoned R2, Limited General Residence District and is located on a .2 acre lot. The 1,176 square foot, two-story single family home has 3 bedrooms and 2 baths. Although the property is listed as a contributing structure within the Look West District, the property does not individually represent a structure of historic significance to be retained. th The property is listed in fair condition on the 4 Ward and Look West Housing Conditions Report; however, this report is based on an exterior inspection from the public right of way done in early 2009. Neighborhood Services staff performed an interior inspection with a real estate agent and the property condition has deteriorated significantly. Both the exterior and the interior of the dwelling are in poor condition. The exterior stucco is falling off of the building. The front and back porches are in poor condition, there are parts of the soffit that are open. There are major foundation cracks on the southwest corner of the foundation in addition to a significant amount of open air cracks in the crawlspace. The second floor bathroom is not functioning and had not been for several years. The electrical system is unsafe. (See Attached Photos). The cost to rehabilitate this structure to comply with current building code, and minimum housing standards, including lead based paint abatement would significantly exceed the current value of the home City Staff has negotiated an offer to purchase the property for $16,000. The property has a current assessed value of $65,800. The property is an owner occupied dwelling that was listed for sale on January 17, 2011 in the amount of $41,000 Because staffs original Offer to Purchase was over $25,000. The offer was written contingent upon an appraisal of the property. The appraisal came in at $16,000, and staff renegotiated the offer to purchase at $16,000. The appraisal found that “except for most of the roof covering, the subject property’s exterior is in poor condition; the three bedrooms are in average condition, otherwise, the interior is in fair-poor condition. Some areas of the interior are not finished; the staircase to the basement is steep, narrow and not safe”. Following demolition, the site would be restored as green space for the time being and offered to a not for profit for construction of a new single family home or offered for sale to adjoining property owners. Any new construction would be 2 reviewed by staff for compatible neighborhood design and all future sales transactions would return to council for approval Funding for the acquisition and demolition of this property is proposed to be funded through the prior note issue funding. The 2009 and 2010 note issues included $700,000 in funding for vacant and/or blighted projects. As of March 31, 2011 a balance of $376,000 is available. 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. Analysis The proposed property acquisition is consistent with established City plans as described below: The project is consistent with the City of Janesville Comprehensive Plan, which calls for the revitalization of neighborhoods that have experienced decline. The structure is not historically or architecturally significant and based on its poor physical condition does not represent a critical use in the Look West Neighborhood. Removal of this structure would provide an opportunity to enhance the appearance of this block and offer potential redevelopment opportunities consistent with the character of traditional downtown neighborhood development. It should be noted that the adjoining properties are in very good physical condition (See Photos). The project is consistent with The Look West and Old Fourth Ward Neighborhood Revitalization Plan, which has been guiding redevelopment efforts in the central city neighborhoods. 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 with some large scale housing complexes having as high as a 25% vacancy rate); although it is arguable that we are experiencing a shortage of quality affordable housing. Plan Commission Action Acquisition of 527 N Pearl Street. Kelly Lee, Development Specialist, presented the written staff report. Commissioner Voskuil stated that she was surprised that based on an exterior condition back in 2009 that the City’s original offer to purchase was over $25,000. Lee explained that is the reason that the offer was written with an appraisal contingency. It allowed for an accepted offer to move forward, but 3 assure that the offer would only be for what the property was worth. Lee added that the City is not responsible for the relocation costs for this family. Commissioner Marklein referred to the staff report regarding the resale of this property and asked if adjoining property owners could divide up the vacant lot for open space or for the addition of a detached structure. Lee confirmed that was a potential use for the property. There was a motion by Commissioner Adams with a second by Commissioner Marklein to find the proposed acquisition 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. The motion carried on a 5-0-0 vote. Attachments: Property Data Information Site Map Property Photos Appraisal Addendum Property Checklist cc: Jennifer Petruzzello, Neighborhood Services Director Eric Levitt, City Manager Jay Winzenz, Assistant City Manager and Director of Administration 4 RESOLUTION NO. 2011-804 RESOLUTION AUTHORIZING THE ACQUISITION AND DEMOLITION OF REAL PROPERTY LOCATED AT 527 NORTH PEARL 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 authorized $500,000 to be used for blight elimination in the central city in a 2009 General Fund Note Issue; and WHEREAS , the Community Development Authority (CDA) and the Neighborhood Action Team assisted in formulating criteria for potential Neighborhood Services Department Property Acquisition 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 December th 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 th condition on the 4 Ward and Look West Housing Condition Report (or of similar condition for census tracts 6 &10); and WHEREAS , the City of Janesville Administration has negotiated an offer to purchase 527 North Pearl Street in the amount of Sixteen Thousand Dollars ($16,000.00); and WHEREAS , the Janesville Plan Commission has reviewed this proposed acquisition on May 2nd, 2011 and found it to be consistent with long range City plans, but not commenting upon the financial aspects of the transaction; 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 funding source for the acquisition and demolition is the 2009 General Fund Note Issue Blight Elimination Fund: NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Janesville that the City’s acquisition of 527 North Pearl Street in the amount of Sixteen Thousand dollars ($16,000.00) 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 Dongarra-Adams Eric J. Levitt, City Manager Liebert McDonald ATTEST: Rashkin Steeber Voskuil Jean Ann Wulf, City Clerk-Treasurer APPROVED AS TO FORM: Wald Klimczyk, City Attorney Proposed by: Neighborhood Services Department Prepared by: Neighborhood Development Specialist ëîé q Ô»¹»²¼ ëîé Òò л¿®´ ͬ®»»¬ Ü¿¬»æ ìñîîñïï ͽ¿´»æ ïþã ïëðù Ó¿° ݱ±®¼·²¿¬»æ Õóïê ÔÑÝßÌ×ÑÒ ÓßÐ Ý×ÌÇ ÑÚ ÖßÒÛÍÊ×ÔÔÛ ÓßÐ ï ß½¯«·­·¬·±² ±º ëîé Òò л¿®´ ͬ®»»¬ ÐÔßÒÒ×ÒÙ ÍÛÎÊ×ÝÛÍ ÍæÐ®±¶»½¬­Äд¿²²·²¹ÄÝ¿­»­ÄÝ¿­»­óîðïïÄÕóïêÁëîéóÒóл¿®´ 527 N Pearl Street 527 N Pearl Street 527 N Pearl Street 527 N Pearl Street 527 N Pearl Street Neighboring Properties Property Condition Checklist for Acquistions Address:527 N Pearl Building ExteriorRepair or ReplaceComments RoofAppears OK at this time Siding/PaintXStucco falling off structure WindowsX PorchesXStructurally Unsound Stairs Guardrails/Handrails FoundationXVisable Cracks Chimney MechanicalsRepair or ReplaceComments Heating SystemNewer Furnance/Water Heater Electrical SystemXunsafe conditions Plumbing SystemsXUpper Bath doesn't work Building InteriorRepair or ReplaceComments StairsXUnsafe Guardrails/HandrailsX FlooringX CabinetsX Counters Plumbing FixturesX Electrical FixturesXunsafe conditions ** See appraisal adendum for additional information