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Property 346 E. 19th Purchase D'G~~E ~Y4-~ MEMORANDUM December 14, 2006 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Purchase of House for Demolition in Washington Neighborhood 346 East 19th Street Housing and Community Development Department Director David Harris is recommending City Council approval to purchase a house located at 346 East 19th Street for the purpose of demolition. As part of the strategy for revitalizing the Washington area, the City has considered demolition of selected properties. Some houses would be acquired for reason of their derelict condition and removed. The strategy includes contacting adjacent owners to determine their interest in acquiring all or part of the resulting vacated lot, in order to determine whether demolition is a feasible option for the City. The property at 346 East 19th has appraised at $86,000. The owner has offered to sell for the balance due on the mortgage, or $58,000. It is estimated that asbestos removal and demolition would total an additional $11,000, for a final cost of $69,000 to the City. I concur with the recommendation and respectfully request Mayor and City Council approval. (lJ ~1/1tJ-- Micllael C. Van Milligen MCVM/jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager David Harris, Housing and Community Development Department Director OO~~E ~ok~ MEMORANDUM 11 December 06 To: Michael ~~ Milligen, City Manager From: David Harris, Housing and Community Development Department Re: Purchase of house for demolition in Washington Neighborhood Introduction The purpose of this memorandum is to request City Council authorization to purchase a house located at 346 East 19th Street for the purpose of demolition. Background As part of the strategy for revitalizing the Washington area, we have considered demolition of selected properties. Housing staff are currently assessing this approach for five identified properties. Some houses would be acquired for reason of their derelict condition and removed. Our strategy includes contacting adjacent owners to determine their interest in acquiring all or part of the resulting vacated lot, in order to determine whether demolition is a feasible option for the City. Other properties would be acquired for demolition for reason of "over-density," meaning that they are placed so close to adjacent structures that no yard space (or off-street parking) is possible. Particularly on the 'cross streets' in the Washington Neighborhood - 11th through 20th - we see an opportunity to remove some of these structures and open up yards and parking spaces, thus making the neighborhood more 'livable' and the marketing of homes for new investment more feasible. This situation is unique to corner properties, as this 'over-building' occurs only at the cross streets. Homes in the middle of the block have full back yards, usually with garages, accessed by rear alleys. A number of corner houses, however, have the adjacent structure located immediately behind them, creating this highly-dense built environment. However, this strategy - for acquisition and clearance -- can be costly, particularly when homes proposed for demolition have market value. Discussion The first home proposed for acquisition and demolition is located at 346 East 19th Street. It is vacant and in need of significant rehabilitation, estimated by our rehab staff at about $57 000. It is, however, marginally habitable, and not a candidate for demolition because of derelict condition. This house is sited, essentially, in the 'back yard' of the adjacent, comer house, located at 1896 Washington Street. For this reason, there is no yard space for either property; there is no off-street parking. The comer home has been purchased by Dubuque Bank and Trust's community development corporation, one of four properties they have acquired in cooperation with the City's Washington: Revitalize! initiative. The DB&T property is a substantial four-bedroom dwelling and could be restored to prominence. Over the past six months, however, we have found no market interest. It does not 'show' well, particularly due to the lack of private yard space. The property at 346 East 19th has appraised at $86 000. The owner has offered to sell for the balance due on the mortgage, or $58 000. It is estimated that asbestos removal and demolition would total an additional $11 000, for a final cost of $69000 to the City. General Funds would be made available for this purpose, from Engineering's Replacement Gunite/Rock Storm Sewer CIP No. 720-1363. The cleared lot would then be made available for sale to DB& T, at an undetermined price. Creating a full lot for the home at 1896 Washington would then increase opportunity for resale to an owner occupant willing to reinvest in the neighborhood. Recommendation It is recommended that the Council approve the acquisition of this property. This recommendation, however, is made with recognition of both the public expense and the fact that we are removing a potentially habitable dwelling from the housing inventory. It is recommended because, on balance, the neighborhood can be better-served through reduction of density, in selected cases. This provides opportunity for enlarged yard spaces and/or off-street parking, in the interest of better marketability of housing for owner-occupant families. Action Step The action requested of the City Council is to approve the attached resolution, authorizing the purchase of property located at 346 East 19th Street, from the owner, Lagari M and Penny A Nard, for $58 000. RESOLUTION NO. 611-06 A RESOLUTION APPROVING THE ACQUISITION OF REAL ESTATE LOCATED AT 346 E. 19th STREET, IN THE CITY OF DUBUQUE WHEREAS, the City of Dubuque intends to acquire certain properties located in the Washington Neighborhood Revitalization Area; and WHEREAS, a purchase agreement has been finalized with the owner. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the City of Dubuque hereby approves the acquisition of the following legally described property: North'/ of Lot 97, except the West 57'6" thereof, in East Dubuque, in the City of Dubuque, Iowa according to the recorded plats thereof At the cost of Fifty-eight thousand dollars ($58 000). Section 2. That the City of Dubuque be and is hereby authorized to accept a Quit Claim deed from the owner, conveying the owner's interest to the City of Dubuque, Iowa for the herein described real estate. Section 3. That the City Clerk be and she is hereby authorized and directed to cause said Quit Claim Deed to be recorded in the office of the Dubuque County Recorder, together with certified copy of the Resolution. Section 4. That the City Clerk be and she is hereby directed to forward a copy of this Resolution to the Dubuque County Assessor and the Dubuque County Auditor. PASSED, APPROVED AND ADOPTED this 18th day of December, 2006. Roy D. uol, Mayor Attest: Jeanne F. Schneider, CMC, City Clerk