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Intent to Dispose of Property_2008 Foye Street_Rath_Initiate Copyright 2014 City of Dubuque Items to be set for Public Hearing # 4. ITEM TITLE: Intentto Dispose of Property- 2008 Foye Street SUMMARY: City Manager recommending the City Council set a public hearing for February 15, 2016, on the City's intent to dispose of property located at 2008 Foye Street to David and Ellen Rath. RESOLUTION Intent to dispose of an interest in City of Dubuque real estate, setting a time and place for hearing and providing for the publication of notice thereof SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Adopt Resolution(s), Set Public Hearing for 2/15/16 ATTACHMENTS: Description Type 2008 Foye Street Contract for Sale of Properly-MVM City Manager Memo Memo Staff Memo Staff Memo Resolution Intent to Dispose Resolutions Notice of Hearing Supporting Documentation Offer to Buy Draft Supporting Documentation Contract Agreement Draft Supporting Documentation THE CITY OF Dubuque UBE I erica .i Masterpiece on the Mississippi 2007-2012-2013 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Contract for Sale of Property Located at 2008 Foye Street DATE: January 26, 2016 Housing and Community Development Department Director Alvin Nash requests the City Council set a public hearing for February 15, 2016, on the City's intent to dispose of property located at 2008 Foye Street to David and Ellen Rath. David and Ellen Rath have agreed to deconstruct the home at 2008 Foye Street and rehabilitate the 1-stall detached garage. I concur with the recommendation and respectfully request Mayor and City Council approval. Micliael C. Van Milligen MCVM:jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Teri Goodmann, Assistant City Manager Alvin Nash, Housing and Community Development Department Director THE CITY OF Dubuque AII-Ame1 rica City DUBgkE r Masterpiece on the Mississippi 2007.2012.2013 TO: Michael Van Milligen, City Manager FROM: Alvin Nash, Housing and Community Development Department SUBJECT: Contract for Sale of Property Located at 2008 Foye Street DATE: January 25, 2016 Introduction The purpose of this memo is to propose the Contract for Sale of the property located at 2008 Foye Street to David and Ellen Rath who currently own and occupy the property located at 595 West Locust, which is the property directly to the east of 2008 Foye Street. 2008 Foye Street is a vacant/abandon property in which the City of Dubuque took possession of in October of 2015 through Court Order by filing for Petition for Title. This property has been left abandon for at least four years. Background The City of Dubuque took possession of 2008 Foye Street in October of 2015 through Court Order by filing for Petition for Title. Previous to the City taking possession, the property was abandon for approximately four years and under constant Code Enforcement for multiple issues. Upon taking possession in late October the City of Dubuque Rehabilitation Inspector performed a detailed inspection and property assessment and put together projected construction costs to rehabilitate the property. The cost of rehabilitation exceeded the projected sale cost of the property considerably due to the current condition of the structure. The projected loss factor in rehabilitation of the property minus the projected sale cost would have been $15,000 to $20,000 which prompted us to move towards deconstruction of the property. The City of Dubuque was contacted by David and Ellen Rath who live directly to the east of 2008 Foye Street at 595 West Locust Street. They have expressed interest in obtaining ownership of 2008 Foye Street to deconstruct the home for green space/additional yard space and maintain/rehabilitate the garage. In exchange for the Raths' agreement to deconstructing the home and rehabilitating the garage, they request clear title and ownership of the lot at 2008 Foye Street. Discussion Step 1: The City of Dubuque will place a Restrictive 21-year single family owner- occupied covenant on 2008 Foye Street. Additionally, as part of this agreement the Raths' have agreed to place a 21-year single family owner-occupied covenant on 595 West Locust Street. Step 2: The City of Dubuque will cover removal of asbestos containing materials from the home and removal/disconnection of sewer/water connections at the mains. The asbestos removal will cost the City $2,000.00, and the sewer/water disconnection will cost the City $3,750. Step 3: David and Ellen Rath of 595 West Locust will be responsible for the remaining deconstruction of the home located at 2008 Foye Street in accordance with our local building codes and will obtain the necessary permit for the deconstruction work. David and Ellen Rath will accept all financial responsibility to rehabilitate and save the existing 1-Stall detached garage which is located at 2008 Foye Street. They have further agreed to obtain all necessary permits to perform the construction work on the garage as well as adhere to the Rehabilitation Standards set forth in our agreement. See attached Contract Agreement. Step 4: Upon completion and final inspection of the agreed upon work above, David and Ellen Rath will obtain clear title and ownership of the property and 1-stall detached garage located at 2008 Foye Street. Conclusion The Contract for Sale and Agreement will benefit both the City of Dubuque, David and Ellen Rath and the neighborhood. The City of Dubuque will suffer less of a financial loss in this agreement, due to the Rath's accepting financial responsibility to deconstruct the house and rehabilitate the garage located at 2008 Foye Street. The Rath's will benefit from their investment by increasing the size of their yard or available green space, adding a 1-stall detached garage for functionality, and increasing the value of their property. In addition, this eliminates the underlying issue of a vacant/abandon structure in the neighborhood. Action Step The action requested of the City Council is to approve the attached resolution, declaring the City's intent to dispose of the property and set the date for the public hearing to receive comments on the proposed sale and recommend the City Council approve the Contract for Sale of the property to David and Ellen Rath of 595 West Locust in accordance with the above discussion and attached Agreement. 2 RESOLUTION NO. 34-16 INTENT TO DISPOSE OF AN INTEREST IN CITY OF DUBUQUE REAL ESTATE, SETTING A TIME AND PLACE FOR HEARING AND PROVIDING FOR THE PUBLICATION OF NOTICE THEREOF WHEREAS, the City of Dubuque, Iowa (City) is the owner of 2008 Foye Street (the Property) legally described as: East 24 feet of Lot 22 in Cox's Addition to Dubuque, in the City of Dubuque, Iowa, according to the recorded plat thereof. WHEREAS, City acquired the Property as vacant/abandoned property in which the City of Dubuque took possession of in October 2015 through Court Order by filing for petition for; and WHEREAS, City and David and Ellen Rath entered into a Contract Agreement pursuant to which City will convey the Property to David and Ellen Rath to deconstruct the single family Property and rehabilitate the existing garage in accordance with the Rehabilitation Standards and all applicable City Codes as approved by the City Council; and WHEREAS, conveying the Property to David and Ellen Rath is consistent with the City's intent for this specific property; and WHEREAS, City desires to hold the required public hearing and conveyance of the Property to David and Ellen Rath. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the City of Dubuque, Iowa intends to dispose of its interest in the following legally described property: East 24 feet of Lot 22 in Cox's Addition to Dubuque, in the City of Dubuque, Iowa, according to the recorded plat thereof. Section 2. That the City of Dubuque, Iowa, proposes to dispose of its interest in the Property to David and Ellen Rath for the sum of one dollar ($1.00). Section 3. That the City Clerk is hereby authorized and directed to cause this Resolution and a notice to be published as prescribed by Iowa Code Section 364.7 of a public hearing on the City's intent to dispose of the Property to be held on the 15th day of February, 2016, at 6:30 o'clock p.m. at the Historic Federal Building, 350 West 6th Street, Dubuque, Iowa. Passed, approved and adopted this lst day of Febr ary, 2016. Roy D. By. I, Mayor ATTEST: Kevin S% Firnstahl, Cit Jerk CITY OF DUBUQUE, IOWA OFFICIAL NOTICE PUBLIC NOTICE is hereby given that the City Council of the City of Dubuque, Iowa, will hold a public hearing on the 15th day of February, 2016, at 6:30 p.m. in the Historic Federal Building, 350 West Sixth Street, second floor, Dubuque, Iowa, at which meeting the City Council proposes to dispose of an interest in the following described real property by sale to David and Ellen Rath: East 24 feet of Lot 22 in Cox's Addition to Dubuque, in the City of Dubuque, Iowa, according to the recorded plat thereof. (2008 Foye Street) At the meeting, the City Council will receive oral and written comments from any resident or property owner of said City to the above action. Written comments regarding the above public hearing may be submitted to the City Clerk's Office, City Hall, 50 W. 13th Street, on or before said time of public hearing. Copies of supporting documents for the public hearings are on file in the City Clerk's Office, and may be viewed during normal working hours. Any visual or hearing impaired persons needing special assistance or persons with special accessibility needs should contact the City Clerk's Office at (563) 589-4100 or TTY (563) 556-9948 at least 48 hours prior to the meeting. Dated this (Day)th day of (Month), (Year). (date of publication) Kevin S. Firnstahl, CMC City Clerk 1 t XX/XX (clerk use) The Resolution on Intent to Dispose is inserted here for the newspaper. OFFER TO BUY REAL ESTATE AND ACCEPTANCE TO: City of Dubuque, Iowa, a municipal corporation (Seller) SECTION 1. REAL ESTATE DESCRIPTION. The undersigned BUYER hereby offers to buy and the undersigned SELLER by its acceptance agrees to sell the real estate (Real Estate) situated in Dubuque, Iowa, locally known as 2008 Foye Street, Dubuque, IA 52001 and legally described as: East 24 feet of Lot 22 in Cox's Addition to Dubuque, in the City of Dubuque, Iowa, according to the recorded plat thereof. legal description to be confirmed per continued abstract per Section 10, together with any easements and appurtenant servient estates, but subject to the following: a. any easements of record for public utilities or roads, b. any zoning restrictions and other ordinances, and c. any covenants of record. SECTION 2. PURCHASE PRICE. The purchase price shall be one dollar ($1 .00). SECTION 3. REAL ESTATE TAXES. Seller shall pay any unpaid real estate taxes payable for fiscal year 2014-2015 and prior years. Seller shall also pay real estate taxes for fiscal year 2015-2016 prorated through the date of closing. Buyer shall pay all subsequent real estate taxes due and payable after the date of closing. SECTION 4. SPECIAL ASSESSMENTS. Seller shall pay all special assessments which are a lien on the Real Estate as of the date of acceptance of this Offer. All other special assessments shall be paid by Buyer. SECTION 6. RISK OF LOSS AND INSURANCE. Seller shall bear the risk of loss or damage to the Real Estate prior to closing or possession, whichever first occurs. Seller agrees to maintain existing insurance and Buyer may purchase additional insurance. In the event of substantial damage or destruction prior to closing, this agreement shall be null and void; provided, however, Buyer shall have the option to complete the closing and receive insurance proceeds regardless of the extent of damages. The property shall be deemed substantially damaged or destroyed if it cannot be restored to its present condition on or before the closing date. SECTION 6. CARE AND MAINTENANCE. The Real Estate shall be preserved in its present condition and delivered intact at the time of possession is delivered to Buyer, provided, however, if there is loss or destruction of all or any part of the Real Estate from causes covered by the insurance maintained by Seller, Buyer agrees to accept such damaged or destroyed Real Estate together with such insurance proceeds in lieu of the Real Estate in its present condition and Seller shall not be required to repair or replace same. 1 SECTION 7. POSSESSION AND CLOSING. 7.1 If Buyer timely performs all obligations, possession of the Real Estate shall be delivered to Buyer on or before June 17, 2016, or such earlier date as the parties may agree in writing, with any adjustments of rent, insurance, and interest to be made as of the date of transfer of possession. 7.2 Closing shall occur after the approval of title by Buyer and vacation of the Real Estate by Seller, but prior to possession by Buyer. Seller agrees to permit Buyer to inspect the Real Estate within seventy two (72) hours prior to closing to assure that the premises are in the condition required by this agreement. If possession is given on a day other than closing, the parties shall make a separate agreement with adjustments as of the date of possession. 7.3 This transaction shall be considered closed upon the delivery of the title transfer documents to Buyer and receipt of all funds then due at closing from Buyer under the Agreement. SECTION 8. USE OF PURCHASE PRICE. At time of settlement, funds of the Purchase Price may be used to pay taxes and other liens and to acquire outstanding interests, if any, of others. SECTION 9. FIXTURES. Included with the Real Estate shall be all fixtures that integrally belong to, are specifically adapted to or are a part of the real estate, whether attached or detached. Also included shall be the following: N/A. The following items shall not be included: N/A. SECTION 10. ABSTRACT AND TITLE. Seller, at its expense, shall promptly obtain an abstract of title to the Real Estate and deliver it to Buyer's attorney for examination. It shall show marketable title in Seller in conformity with this Agreement, Iowa law, and title standards of the Iowa State Bar Association. Seller shall make every reasonable effort to promptly perfect title. If closing is delayed due to Seller's inability to provide marketable title, this agreement shall continue in force and effect until either party rescinds the Agreement after giving ten (10) days written notice to the other party. The abstract shall become the property of Buyer when the Purchase Price is paid in full. Seller shall pay the costs of any additional abstracting and title work due to any act or omission of Seller, including transfers by or the death of Seller or Seller's assignees. Unless stricken, the abstract shall be obtained from an abstracter qualified by the Guaranty Division of the Iowa Housing Finance Authority. SECTION 11. DEED. Upon payment of the Purchase Price, Seller shall convey the Real Estate to Buyer by Special Warranty Deed, free and clear of all liens, restrictions, and encumbrances, except as provided in this agreement. General warranties of the title shall extend to the time of delivery of the deed excepting liens and encumbrances suffered or permitted by Buyer. 2 SECTION 12. CONTRACT BINDING ON SUCCESSORS IN INTEREST. This contract shall apply to and bind the successors in interest of the parties. This agreement shall survive the closing. SECTION 13. RIGHTS OF INSPECTION, ENVIRONMENTAL TESTING AND REVIEW. Real Estate deeded herein is taken in "as is" condition with no guarantees or warranties express or implied. SECTION 14. ENCUMBRANCES. Seller warrants that the Real Estate will as of the date of closing be free and clear of all liens, security interests, and encumbrances. SECTION 15. TENANTS. The Real Estate is free and clear of any occupants, and no party has a lease to or other occupancy or contract right in the Real Estate which shall in anyway be binding upon the Real Estate. Seller shall hold harmless and indemnify the Buyer for and against any claims, which may arise or be based upon any alleged leasehold interest, tenancy, or other right of occupancy or use for any portion for the Real Estate. This covenant shall survive the closing. SECTION 16. NO REAL ESTATE AGENT OR BROKER. Neither party has used the service of a real estate agent or broker in connection with this transaction. SECTION 17. CERTIFICATION. Buyer and Seller each certify that they are not acting, directly or indirectly, for or on behalf of any person, group, entity or nation named by any Executive Order or the United States Treasury Department as a terrorist, "Specially Designated National and Blocked Person" or any other banned or blocked person, entity, nation or transaction pursuant to any law, order, rule or regulation that is enforced or administered by the Office of Foreign Assets Control; and are not engaged in this transaction, directly or indirectly on behalf of, any such person, group, entity or nation. Each party hereby agrees to defend, indemnify and hold harmless the other party from and against any and all claims, damages, losses, risks, liabilities and expenses (including attorney's fees and costs) arising from or related to breach of the foregoing certification. SECTION 18. REMEDIES OF THE PARTIES. 18.1 If Buyer fails to timely perform this contract, Seller may forfeit it as provided in the Iowa Code, and all payments made shall be forfeited or, at Seller's option, upon thirty (30) days written notice of intention to accelerate the payment of the entire balance because of such failure (during which thirty (30) days such failure is not corrected) Seller may declare the entire balance immediately due and payable. Thereafter this contract may be foreclosed in equity and the Court may appoint a receiver. 18.2 If Seller fails to timely perform this contract, Buyer has the right to have all payments made returned to it. 18.3 Buyer and Seller also are entitled to utilize any and all other remedies or actions at 3 law or in equity available to them and shall be entitled to obtain judgment for costs and attorney fees as permitted by law. SECTION 19. WAIVER. Failure to promptly assert rights herein shall not, however, be a waiver of such rights or a waiver of any existing or subsequent default. SECTION 20. NOTICE. Any notice under this agreement shall be in writing and be deemed served when it is delivered by personal delivery or mailed by certified mail, addressed to the parties at the addresses given below. David & Ellen Rath 595 West Locust Street Dubuque, IA 52001 City of Dubuque Attn: Alvin Nash 50 W. 13th Street Dubuque, IA 52001 SECTION 21. TIME IS OF THE ESSENCE. In the performance of each part of this agreement, time shall be of the essence. SECTION 22. TIME FOR ACCEPTANCE. When accepted, this agreement shall become a binding contract. If this Offer is not accepted and delivered to Buyer on or before 5:00 p.m. on February 29, 2016, this agreement shall be null and void and all payments shall be returned immediately to the Buyer. SECTION 23. ENTIRE AGREEMENT. This agreement contains the entire agreement of the parties and shall not be amended except by a written instrument duly signed by Seller and Buyer. SECTION 24. PARAGRAPH HEADINGS AND CONSTRUCTION. Paragraph headings are for convenience of reference and shall not limit or affect the meaning of this Agreement. Words and phrases herein shall be construed as in the singular or plural number, and as masculine, feminine or neuter gender according to the context. SECTION 25. OTHER PROVISIONS. 25.1 This agreement is subject to the final approval of the City Council of the City of Dubuque, Iowa in its sole discretion. If the City Council of the City of Dubuque, Iowa does not approve this Offer, it shall become automatically void and neither party shall be bound by the terms and conditions set forth herein. 25.2 The Real Estate will have a restrictive covenant filed indicating the property must remain owner occupied for twenty-one (21) years. 4 25.3 The terms of the Contract Agreement attached to this Offer to Buy are hereby incorporated. SELLER BUYER CITY OF DUBUQUE, IOWA DAVID & ELLEN RATH By: By: Roy D. Buol, Mayor David A. Rath By: Ellen M. Rath Dated: Dated: 5 Contract Agreement Property: 2008 Foye Street Asbestos Removal Work: The City of Dubuque will take on financial responsibility to have the asbestos containing materials removed by a Licensed Contractor according to State Regulations. The total cost of the asbestos removal no more than $2,000. Sewer/Water Disconnection Work: The City of Dubuque will take on financial responsibility to have both the private water and sewer lines disconnected at the mains. The total cost of the water/sewer disconnections will be no more than $3,750. Work Description of Deconstructing the Home: The Raths' (Owner) to agree to all other financial responsibility for the work to be done at 2008 Foye Street. The Owner will be responsible to obtain a deconstruction permit to completely remove the entire existing single family home currently constructed on this lot. Owner to remove all portions of the structure up to the 1-stall detached garage down to the existing foundations. Owner to haul all materials off site and is encouraged to recycle and reuse any suitable materials, and haul all other materials and debris off site to the landfill. Owner to remove all foundation material around the perimeter of the structure to a minimum of 1 foot below grade prior to backfilling. Owner to haul in clean uncontaminated fill for backfill with a minimum of 6 inches of clean black dirt for topsoil. Owner to properly compact the fill and restore the lot to the natural condition upon final grading. Owner must install proper plant habitat in the soil that meets all applicable City Codes & Ordinances upon completion to avoid erosion and run-off in the newly compacted soil. See attached photo of house and garage. Work Description of Rehabilitating the Garage: Owner to agree to the following work to be done on the existing 1-stall detached garage. Owner to obtain a building permit for the rehabilitation work being done on the garage. The garage repairs and rehabilitation work to fall in accordance with the attached Rehabilitation Standards Manual, and be done in accordance with all applicable City Codes. Project Completion Date: Owner agrees to have all work completed and final inspections made by June 17, 2016. Buyers: Sellers: David Rath Roy D. Buol, Mayor City of Dubuque Ellen Rath �'� � 4+ .. vA+'�8 giE� �'h l�il1 , R+ N >`t•y - t a � 1 ._ - r � ._e �_ _ ... _ ! �