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90-1587 � • Council File � �- V� 7 Green Sheet � RESOLUTION CITY F SAINT PAUL, MINNESOTA . Presented B �/�� - � Y Referred To Committee: Date RESOLUTION MAKING CERTAIN DETERMINATIONS AND FINDINGS NECESSARY TO ACQUIRE THE OF PROPERTY AT 73 NORTH FAIRVIEW, HAMLINE MIDWAY, DISTRICT 11 WHEREAS, the prop rty at 730 North Fairview Avenue is improved by a 2-1/2 story wood frame nd brick exterior walk-up apartment complex built in 1960 consisting of el ven, one-bedroom units with off-street parking for eight to ten cars; and WHEREAS, followi an inspection on January 29, 1986, on February 3, 1986, the Department of Fi e and Safety Services notified the property owner that certain code def'ciencies existed which required correction before renewal of the Certificate f Occupancy for the building with notices again served on April 16, 1986, uly 24, 1986, and December 2, 1986 without response; and WHEREAS, on July 22, 1987, the property was reinspected and on November 22, 1987, a Notice o Condemnation and Order to Vacate was posted on the premises for vacation eff ctive December 26, 1987, the building has remained vacant and the owner has ta en no steps to sell the property, or to remedy fire and other code deficiencie ; and WHEREAS, the Dis rict Council, neighborhood residents and real estate agents/developer have contacted the property owner indicting an interest to purchase and reh bilitate it for housing, the owner has indicated no interest in selling the b ilding or maintaining it; and WHEREAS, by rea on of continued inadequate maintenance, physical damage and unsanitary cond tions the building constitutes a fire hazard, a hazard to public safety a d health and a blighting influence and detriment to the neighborhood an abutting properties, which conditions require remedial public action; and WHEREAS, the Ha line Midway Coalition, neighborhood residents and City staff continuen to ev luate various options for resolving this continuing blighting influence on th neighbork�ood, in hopes of securing City action for resolution of this problem four options were presented to the Housing and Economic Development Co ittee (HEDC) on March 14, 1990; and WHEREAS, HEDC a proved Option 4 recoaunending soliciting proposals for a period � of 60 days, of ring a commitment to provide $115,000 in CDBG Rental Rehab funds towards evelopment and that if developer interest is established, with private financ ng source to help supplement the project, HEDC would recommend the HRA/City p oceed with acquisition of 730 North Fairview; and WHEREAS, over ifty letters were sent out by the Hamline Midway Coalition and PED soliciting developer interest in the purchase and rehabilitation of 730 North Fairview this undertaking allowed the neighborhood and the City to determine if t ere was a developer willing and able to bring other financial resources to b ar to allow the development of this property; and � ' . � ��- /�`S7 WHEREAS, the neig borhood received five proposals covering the rehabilitation of this building, presentations to the neighborhood were made on July 9, 1990 with the neighbor ood selecting the partnership of Kent Hagen and Hubert Nelson, who propo e to purchase and totally rehabilitate the building as 11 1-bedroom units r nting at $405-$425 per month and have the financial resources to carr overall development cost of $220,000-$240,000 which include both acquisition nd rehabilitation costs; and WHEREAS, in order to proceed with this acquisition, a Public Hearing was held before City Coun il which identified this property, and allowed testimony for or against such ndertaking, this Notice was published in the Pioneer Press on August 18, 1990, with a public hearing before City Council, August 30, 1990, with the propert owner being notified by certified mail of the hearing; and WHEREAS, the bui ding continues to remain vacant and deteriorating, the City Council has take abatement action against the owner of 730 North Fairview over the last mo th and previously, with no willingness shown by owner that this issue will mprove. NOW, THEREFORE, E IT RESOLVED by the City of Saint Paul, in view of the foregoing hereby adopted findings that the public acquisition of 730 North Fairview legal scribed as: Lot 11, B ock 12, College Place West Division is hereby appro ed in accordance with these findings: 1. That the uilding at 730 North Fairview is presently vacated and has been vaca ed since December 26, 1987; that the building at 730 North Fairview onstitutes a hazardous building within the definition of Minnesota Statutes, Section 463.15 Subd. 3 is substandard and is eligible or public acquisition pursuant to authorization of Minnesota Statutes, Section 469.012 Subd. 1(7) . 2. That the proposal for public acquisition and sale for private renovation and reha ilitation of the property at 730 North Fairview will afford maximum pportunity, consistent with the sound needs of community as a whole, f r the provision of housing by redevelopment of existing housing by priva e enterprise and the acquisition by negotiation or by eminent domain i hereby authorized following approval by the City Council. 3. That in ccordance with Minnesota Statute 117.52 all acquisitions undertak n by an acquiring Authority, which Authority shall provide all relocati n assistance, services, payments and benefits, if necessary, in accor ance with the Uniform Relocation Assistance and Real Property Acquisi ion Act of 1970 (24 CFR 42 and 570.1 CDBG regulations contained in HUD andbook 1377, effective April l, 1989) . 4. That, a quisition of the property herein may be undertaken by the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota by dire t purchase or exercise the power of eminent domain together with a quick take action and further request needed legal action to secure propert from further deterioration. . � � . � , �J -%g� 5. That acq isition of the property herein identified is necessary in order to remove conditions of blight constituted by this vacant and substand rd building which exist in the Hamline-Midway District 11 area and to c rry out the necessary redevelopment to provide housing for low/mode ate income families. as Navs Absent Requested by Department of: imon osw z Planning and Economic Development on acca ee et man ' ' vne J z son By� �— Adopted by Council Date AUG 3 p 19g0 Fo�► Approved by Cit Attorney Adoptio ��ertified by Council Secretary By: �", r, By� ' - Approv d by Mayor for Submission to Approved �3� Mayor: Dat�UG 31 1990 Council . , By: r ,'•�/2'" -6��+ $y: l�-��1'-,��.�Z/� '�"^�1S#I�fl ��P - 8199U �-• � • ��c�;v�� q�_�g � -�� , ' �PED ��p��Npl DATEINI7'IATED GREEN SHEET � �. 3��1� uuc 2 � � CONTACT PERSON�PHONE �DEPARTMENT aRECTOR CITY 4.. S Sheri Pemberton 3358 Nu�� AnOqNEY ''��`' �� '"� A�18T BE ON COUNCIL AOENDA BY(DAT� ROUTINO �BUDCiET DIRECTOR �FIN.d MOT.SERV1�8 DIR. �MAYOR(OR A8818TANTl � TOTAL#k OF 81GNATURE PAGES (CLIP ALL LQCATIONS FOR 8KiNATUREj ACTION RFAUE8TED: Resolution to make certa n determinations and findings necessary for the Hous� � �� Redevelopment Authority o acquire the property at 730 North Fairview. � f � RECOMMENDATIONB:Approw W a Rej�ct(R) COUNqL COMMITTEE/RESEARCH REPORT OPTIONAL ANALY3T PFIONE NO. _PLANNIN(i COMMISSION _GVIL SEH ICE COMMISSION _CIB COMMITTEE _ COMMENTS: �y� • A sT� — _DISTRIC'T COURT _ 8UPPORT3 WHICFI OOUNGL OBJECTIVE? INITIATINO PROBLEM,IS8UE,OPPOR7UNITY(Who Whet,WMn,Whero,Why): On August 30, 1990, Cit Council will hold a Public Hearing concerning the acquisition of 730 North Fairview and ecommend a Resolution be drafted for final approval of the acquisition. ADVMITA(iE8 IF APPFlOVED: Acquisition of this pro erty will remove a deteriorating and blighting influence from the neighborhood; inimize further hardship to adjacent property owners and neighborhood as a whole provide rehabilitation of a vacant building, creating affordable housing for low/moderat income families. Approved by City Counci sitting as the Housing and Redevelopment Board by Resolution 90-8/14-9. pISADVANTApE81F APPROVED: a811DVANTAOES IF NOT APPFmVED: 1 The structure remains acant, continues to deteriorate and create neighborhood problems. Extensive title proble s make it impossible for an outside develog�er to acquire the property privately (th's has been attempted for the past six months) . TOTAL AMOIlNT OF TRANSI�CTION 6O OOO COST/pEVENUE BUDOETED(GRCLE ON� YES NO ��z9 FUNDINO SOURCE New Housin Develo ment Fu d ACTIVITY NUMBER P6-132-36410-0551-�$ r�« FlNANCIAL INFORMATION:(EXPWI� Housing and Redevelop ent Authority of the City of Saint Paul, Minnesota (Resolution 90-$/14-9 � ' ' • � 1� . � � . • ��- ,��"S`� MOUSIN6 AND REDEY LOPMENT AUTHORITY OF TNE CITY OF SAINT PAUL, MINNESOTA REPORT TO THE C�M IsS10NERS DATE August 9, 1990 RE6ARDIN6 AUTHO IZATION TO SCHEDULE PUBLIC HEARING BEFORE CITY COUNCZL TO MAKE ECESSARY FINDINGS, SUBSEQUENTLY PROCEED WITH ACQUISITION AND , DESI ATE DEVELOPER FOR 730 NORTH FAIRVIEW, HAMLINE-MIDWAY DIST ICT 11 On August 8, 199 , the Housing and Economic Development Committee (HEDC) considered and r eommended for approval by HRA the acquisition and tentative developer design tion of 730 North Fairview. The following co tents are attached for your consideration and approval. 1. HRA Report dated August 2, 1990 presented to the HEDC 2. HRA Resolu ion 3. Original R port to HEDC dated March 14, 1990 4. City Council Resolution 90-293-Request for Analysis and Recommendation Respectin Remedial Action on 730 North Fairview Sheri Pemberton . . . . q � --%��a� �OUSINB AMD REDEY LOPMENT AUTHORITY OF TNE CITY OF SAINT PAUL, MIMNESOTA AEPORT TO TNE CO IVIIgS10NERS DATE August 2, 1990 �E6A�D11�6 AUTHO IZATION TO SCHEDULE PUBLIC HEARING BEFORE CITY COUNCIL TO MAKE ECESSARY FINDINGS, SUBSEQUENTLY PROCEED WITH ACQUISITION AND DESIG ATE TENTATIVE DEVELOPER FOR 730 NORTH FAIRVIEW, HAMLI E-MIDWAY DISTRICT 11 BACKGROUND The property at 30 North Fairview Avenue is improved by a 2-1/2 story wood frame and brick xterior walk-up apartment complex built in 1960. The building consist of eleven, one-bedroom units (three at garden level and four on each of the t o remaining floors) with off-street parking for eight to ten cars. Following an ins ection on January 29, 1986, on February 3, 1986, the Department of Fi e and Safety Services noti€ied the property owner that certain code de iciencies existed which required correction before renewal of -- the Certificate of Occupancy for the building. Notices were again served on the owner April 16, 1986, July 24, 1986, and December 2, 1986 without response. On J ly 22, 1987, the property was reinspected and on November 22, 1987, a Notice f Condemnation and Order to Vacate was posted on the premises for vacation ef ective December 26, 1987. Since that time the building has remained vacant and the owner has taken no steps to sell the property, or to remedy fire and other code deficiencies. The property co tinued to remain vacant and deteriorate. The City obtained a search warrant in February, 1990, to enter the building to determine extent of additional dam ge and secure from entry. The District C uncil, neighborhood residents and real estate agents/developers have contacted the property owner indicting an interest to purchase and rehabilitate i for housing. The owner has indicated no interest in selling 1 . � � �� J �� the building or ma ntaining it. The continued inadequate maintenance, physical damage an abandonment constitutes a fire hazard and a blighting influence and det iment to the neighborhood and abutting properties, which conditions requir remedial public action. The Hamline Midwa Coalition, neighborhood residents and City staff continued to evaluate vario s options for resolving this continuing blighting influence on the neighborho d. In hopes of securing City action for resolution of this problem, four opt ons were presented to the Housing and Economic Development Committee (HEDC) n March 14, 1990 (see attachment) . Option 4 was selected. OPTION 4: Solic"t Pro osals from Develo ers to Rehabilitate the Buildin : Under this scena io the City decided to solicit interest from potential developers. A 1 tter would be drafted indicating anticipated acquisition and rehabilitation c sts and indicate that a maximum loan of $115,000 could be made available f om CDBG Rental Rehab Program at 2� for 30 years. Another possibility woul be to apply for a Federal Supportive Housing Demonstration Grant and develo the property for transitional housing use. Benefits: 1. Thi proposal allows the City to determine if there is a developer wil ing and able to bring other financial resources to bear to _. all w the development of the property. 2. If eveloper interest is determined, the City would proceed with con emnation with the knowledge that redevelopment of the property wou d be feasible and imminent. Costs: 1. Th building will continue to deteriorate from water damage due to a ole in the roof and the cost to rehabilitate the structure will in rease over time. 2 � � - � � � �ot-/��`7 HEDC ACTION Marc 14 1990 HEDC approved Opt on 4 recommending soliciting proposals for a period of 60 days. A commitme t to provide $115,000 in CDBG Rental Rehab funds towards development be of ered. That if developer interest is established, with private financing source to help supplement the project, HEDC would recommend � the HRA/City proc ed with acquisition of 730 North Fairview. Over fifty lette s were sent out by the Hamline Midway Coalition and PED soliciting devel per interest in the purchase and rehabilitation of 730 North Fairview. This ndertaking allowed the neighborhood and the City to determine if there was a d veloper willing and able to bring other financial resources to bear to allow the development of this property. Letters of Intent were due by June 1., 1990. CURRENT STATUS The neighborhood received five proposals covering the rehabilitation of this building. Sever 1 neighborhood meetings were held, with the developers making their presentati ns to the neighborhood on July 9, 1990. The neighborhood selected the pa tnership consisting of Kent Hagen and Hubert Nelson, who propose to purc ase and totally rehabilitate the building as 11 1-bedroom units renting a $405-$425 per month. The proposed developers have the - financial resou ces to carry on overall development cost of $220,000-$240,000 _ which must incl de both acquisition and rehabilitation costs. Kent Hagen is a active member of the community and has a strong interest in resolving this eighborhood problem. He has done development work in the neighborhood th t has been extremely successful. Hubert Nelson, owner of Nelson Brothers Construction is also a local City business and brings strong construction ex ertise to the project. The fact that both parties have the personal skills to undertake this development allows cost savings in the rehabilitation to some degree. 3 . � �J �r�� The building conti ues to remain vacant and deteriorating. The City Council has taken abatemen action against the owner of 730 North Fairview over the last month and pre iously, with no willingness shown, that this issue will improve: The Opti ns to demolish this property as outlined in the March 14 report basically r main the same. Option 3 is revised. REVISED OPTION 3: HRA Ac uires and Private Develo er Purchases Rehabilitates Buildin throu h se of CDBG Loan The Housing and R development Authority acquires the property in accordance with Mn. Statutes 469.012 (6) and (7) and under eminent domain proceedings Mn. Statutes 117. The estimate for cquisition of the property is $60,000, plus staff costs. The proposed deve oper indicates a rehab cost of $210,000 which allows for a potential acquis"tion purchase price of approximately $30,000. Under current gu'delines, the HRA could provide a CDBG Rental Rehabilitation Loan to a develo er to assist in project financing. This loan provides a maximum of $115, 00 for a project of this size and has a period of 30 years at 2� interest. Benefits: l. The roperty is purchased and rehabilitated and becomes a positive _ con ributing factor to the neighborhood and the City. 2. Cit no longer has to secure and maintain the property through the aba ement process. 3. Aff rdable housing units are provided at a cost of $25,500 per uni , compared. to $40,000 per unit for similar new construction. Costs: l. Co ts that are not recoverable are a portion of the acquisition an maintenance costs $35,000 plus staff costs and legal costs th ough condemnation averaging $10,000. 4 � � � � �3 v IS�� In reviewing the 0 tions, staff recommends Revised Option 3, to do so the following actions eed to be taken: HR.A approve acquisition of 730 North Fairview through eminent domain and Quit Take A tion. Designate $60,000 from the New Housing Development Fund for ac uisition of which approximately $30,000 will be reimbursed from sale. HRA request the Court to grant authority to take all necessary action to secure the uilding specifically the roof to prevent further deteriorat'on of the structure prior to title and possession. City Counc 1 hold a public hearing concerning the acquisition and make the necess ry findings (blighting influence, vacant and hazardous building) eeded to proceed with eminent domain. HRA design tes Kent Hagen and Hubert Nelson as tentative developer for a period of 0 days commencing on the date of transfer of 730 North Fairview o HRA. Sheri Pemberton 5 � • R E S 0 L U T I 0 N N 0. 90-8/14- �J � �r�,� ESOLUTION SCHEDULING A PUBLIC HEARING AND UTHORIZING ACQUISITION AND DESIGNATING ENTATIVE DEVELOPER OF PROPERTY AT 730 NORTH FAIRVIEW, HAMLINE MIDWAY. DISTRICT 11 WHEREAS, the prop rty at 730 North Fairview Avenue is improved by a 2-1/2 story wood frame nd brick exterior walk-up apartment complex built in 1960 consisting of el ven, one-bedroom units with off-street parking for eight to ten cars; and WHEREAS, followin an inspection on January 29, 1986, on February 3, 1986, the Department of Fir and Safety Services notified the property owner that certain code defi iencies existed which required correction before renewal of the Certificate o Occupancy for the building with notices again served on April 16, 1986, J ly 24, 1986, and December 2, 1986 without response; and . WHEREAS, on July 22, 1987, the property was reinspected and on November 22, 1987, a Notice o Condemnation and Order to Vacate was posted on the premises for vacation eff ctive December 26, 1987, the building has remained vacant and the owner has ta en no steps to sell the property, or to remedy fire and other code deficiencie ; and WHEREAS, the Dis rict Council, neighborhood residents and real estate agents/developer have contacted the property owner indicting an interest to purchase and reh bilitate it for housing, the owner has indicated no interest in selling the b ilding or maintaining it; and WHEREAS, by reas n of continued inadequate maintenance, physical damage and unsanitary cond'tions the building constitutes a fire hazard, a hazard to _ public safety a d health and a blighting influence and detriment to the : neighborhood an abutting properties, which conditions require remedial public action; and WHEREAS, the Ha line Midway Coalition, neighborhood residents and City staff continued to ev luate various options for resolving this continuing blighting influence on th neighborhood, in hopes of securing City action for resolution of this problem four options were presented to the Housing and Economic Development Co ittee (HEDC) on March 14, 1990; and WHEREAS, HEDC a proved Option 4 recommending soliciting proposals for a period of 60 days, of ring a commitment to provide $115,000 in CDBG Rental Rehab funds towards evelopment and that if developer interest is established, with private financ'ng source to help supplement the project, HEDC would recommend the HRA/City p oceed with acquisition of 730 North Fairview; and WHEREAS, over ifty letters were sent out by the Hamline Midway Coalition and PED soliciting developer interest in the purchase and rehabilitation of 730 North Fairview this undertaking allowed the neighborhood and the City to determine if t ere was a developer willing and able to bring other financial resources to b ar to allow the development of this property; and ' � � ' _/��Jt7 � � WHEREAS, the neigh orhood received five proposals covering the rehabilitation of this building, resentations to the neighborhood were made on July 9, 1990 with the neighborh od selecting the partnership of Kent Hagen and Hubert Nelson, who propos to purchase and totally rehabilitate the building as 11 1-bedroom units re ting at $405-$425 per month and have the financial resources to carr overall development cost of $220,000-$240,000 which include both acquisition d rehabilitation costs; and WHEREAS, the buil ing continues to remain vacant and deteriorating, the City Council has taken abatement action against the owner of 730 North Fairview over the last mon h and previously, with no willingness shown by owner that this issue will i prove. NOW, THEREFORE, B IT RESOLVED by the Housing and Redevelopment Authority of the City of Saint Paul, in view of the foregoing hereby adopted findings that the public acquis tion of 730 North Fairview legal described as: Lot 11, Blo k 12, College Place West Division is in accordance ith the City Wide Redevelopment Plan and is hereby approved in accordance wit these, findings: 1. That a pub ic hearing is hereby requested to be held before City Council on August 0, 1990 concerning the acquisition of this property. 2. That the b ilding at 730 North Fairview is presently vacated and has been vacat d since December 26, 1987; that the building at 730 North Fairview c nstitutes a hazardous building within the definition of Minnesota tatutes, Section 463.15 Subd. 3 is substandard and is eligible f r public acquisition pursuant to authorization of Minnesota Statutes, ection 469.012 Subd. 1(7) . 3. That the p oposal for public acquisition and sale for private renovation = and rehabi itation of the property at 730 North Fairview will afford maximum op ortunity, consistent with the sound needs of community as a whole, for the provision of housing by redevelopment of existing housing by private enterprise and the acquisition by negotiation or by eminent domain is ereby authorized following approval by the City Council. 4. That in a cordance with Minnesota Statute 117.52 all acquisitions undertake by an acquiring Authority, which Authority shall provide all relocatio assistance, services, payments and benefits, if necessary, in accord nce with the Uniform Relocation Assistance and Real Property Acquisiti n Act of 1970 (24 CFR 42 and 570.1 CDBG regulations contained in HUD Ha dbook 1377, effective April 1, 1989) . 5. That, acq isition of the property herein may be acquired by direct purchase r exercise the power of eminent domain together with a quick-tak action and further request needed legal action to secure property rom further deterioration. 6. That, pur uant to Chapter 548, Laws of Minnesota 1984, it is hereby certifie that said property meets the conditions of Minnesota Statutes Section 73.73, Subdivision 11 and are exempt from property taxes under Sections 272.02, Subdivision 1, clause (7) and 469.040, Subdivision 1, until so d for private redevelopment. . . . . �� - ,�� 7. That acquis'tion of the property herein identified is necessary in order to remove c nditions of blight constituted by this vacant and substandard building which exist in the Hamline-Midway District 11 area and to carr out the necessary redevelopment to provide housing for low/moderat income families. 8. The HR.A bud et is amended as follows: Current Amended Bud�et Changes Budget FINANCING PLAN 132 New Housing Development Fund 132-36410-983 Use of Fund Balance -0- 60 000 $ 60,000 Change to Fina cing Plan 60 000 SPENDING PLAN 132 New Hous'ng Development Fund , P6-132-364 0-0551-64429 -0- 60 000 $ 60,000 730 North airview Net Change to pending Plan 60 000 9. That, HRA esignates Kent Hagen and Hubert Nelson as tentative developer for a peri d of 90 days commencing on the date of transfer of 730 North Fairview t HRA in order to finalize all documentation necessary to consummate the purchase after acquisition. a- �� . � � .�� . : _�..:�- �. . � �ow �� sr �'r�`•.,. . � ,.... d� 'I ,•,,ro . . - � �� ` ;;_ A. . N C . „ ..... "" .�1z 'tl ' ^��C j'•.' .. 1 � , I y I� • � .� + o — , ',(l R f�C . .. • . - \ W � . ?/ �1 � 'Y I�I�y �T I •. � ... , ^ � I � � , " ' �` ' I �, .. ��'l�l�_ ' � �'� `� ' ' ' -- -- -0. i/ � : � 1 �: � . . � I '� �s+'�.,. T �•_ N��''�/ . • ^. . � •�\\ �=-- l� ... � � �. 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', •• - y -. <r - < ' I R " .1 .+ /^ ^�-- ... � .. - . 1/ � . : . ... � t ,- ;��' �� a� v� cn --= � m�mmoowo � �� T� �� -i-� �� o N Ci7 � Q e 01 cap �Nj Q CTACJU N -+ � y 3.�� G ` .�� O -0�W Ni � O Sy �� 7 x n y n 1 j W N j 3 � N� 3 T �' y 7 C Oi � cD `C b = m 67 � •-�, ° �c y r`o c a � � b O Q y ` _ ' ' �''G � � � � � , � � . � � v O .a �. �, 0 o • . , . _ . �v - ,v �� - HOUSIW6 AQ�D REDEY LOPAAE�lT AUTHORiTY OF TNE C�TY OF SAf�1T PAUL, MI�lNESOTA REPORT TO THE HOUS NG AND ECONOMIC DEVELOPMENT COMMITTEE DATE: March 4, 1990 RE: DEVELO MENT OPTIONS FOR VACANT APARTMENT AT 730 NORTH FAIRVIEW The following stu y of development options for the vacant apartment building at 730 North Fai iew Avenue looks at the feasibility of various demolition and rehabilitatio scenarios. The Midway Coalition has e:tpressed an interest in working with a non-profit development group to rehab the building for rental housing. hey feel the area would provide a good market for housing marketed toward s niors. OPTION 1: HRA Ac uisition Demolition and Sub's�e uent Sale of Lar.d The City could ac uire the property through condemnation for an estimated � $100,000 and demo ish the apartment building for an additional $18,000. If the resulting lot could be sold for $20,000 the net City expenditure would total $98,000. Benefits: 1. The a quisition price paid would allow recapture of abatement costs and taxes. However, these expenses are again being paid by the ity through acquisition. _ 2. The ity avoids development costs and risks, yet removes a blig ting influence. Costs: 1. The RA will incur additional maintenance, insurance and staff time costs while the site is being marketed. 2. The idway Coalition has expressed their desire to see the buil ing saved, and is interested in working with a non-profit grou to restore the structure. ' OPTION 2: Demol tion under Cit Nuisance Ordinance Under this scena io the building will be condemned and demolished under the City nuisance or inance. Demolition would initially be paid by the City ($18,000) , howev r a lien would be placed on the property in the amount of the demolition cost 'n addition to any current abatement costs and delinquent taxes that have een charged against the property. The land would continue to be owned by the resent owner. Based on the owner's prior performance and current two year delinquent tax situation, it is likely that the property could go tax for eit and be available for redevelopment through tax forfeit auction in 1993. � - ��-1�� . '; Page 2 Benefits: 1. This s enario is the least expensive of the proposed options, and the bl'ghting influence is removed. . 2. It is ikely that the property could eventually be obtained throug tax forfeit action. Costs: 1. The site may not reach its highest and best use as the current owner ill retain control of the property. The City loses the oppor nity to develop needed housing on this site, 2. It is likely that the City will continue to experience problems with he maintenance of the property and will need to take further abate ent action. OPTION 3 : HRA Ac uires and Private Develo er Purchases Rehabilitates Buildin throu h use of CD G Loan and Additional Public Financin : Under current gui elines, the HRA could provide a CDBG Rental Rehabilitation Loan to a develop r to assist in project financing. This loan provides a maximum of $115,0 0 for a project of this size and has a period of 30 years at 2� interest. Thi loan must be matched with outside dollars at a rate of 1 to 1. As the attached p o-forma analysis details, the project does not cash flow without additiona public subsidy of at least $137,000. Currently, there are no other City pro rams available for a project of this type. = This building sho ld retain its present configuration of 11 1-bedroom units. ' Attempting to con ert some of the 1 bedroom units to 2 bedrooms would result in a net decrease in rent revenue and an increase in development costs. Benefits: 1. Marke rate housing units are provided at a cost of $25,500 per unit, compared to $40,000 per unit for similar new construction. Costs: 1. The p oject requires additional City assistance totaling at least $137,000. 2. The will incur additional maintenance, insurance and staff time costs during the period that the property is being offered for evelopment. - , � Page 3 ' �c�- �� OPTION 4: Solici Pr000sals from Develo ers to Rehabilitate the Buildin : Under this scenar'o the City would solicit interest from potential developers. A .letter would be drafted indicating anticipated acquisition and rehabilitation co ts and indicate that a maximum loan of $115,000 could be available from CD G Rental Rehab Program at 2�s for 30 years. Another . possibility woul be to apply for a Federal Supportive Housing Demonstration Grant and develop the property for transitional housing use. Benefits: l. This roposal allows the City to determine if there is a developer willi g and able to bring other financial resources to bear to allo the development o£ the property. 2. If d eloper in�erest is determined, the City could proceed with cond nation with the knowledge that redevelopnent o£ the property woul be feasible and imminent. Costs: • l. The uilding will continue to deteriorate from water damage due to a ho e in the roo= and the cost to rehabilitate the structure wi11 incr ase over time. RECOMMENDATION Based on the unc rtainty of being able to f2nd a developer and the high costs involved with th s project, staff feels that Option 4 allows the greatest opportunity with the least amount of cost to the Cit�. Ii accepted, the solicitation per od would be between 30-60 days. - - - Sheri Pemberton � John Kimball SAP:Ik �_ • rV l �^! l7 ! 1y H L - r ri ' Council File � ��`$��✓ { , - - . i � =�-�� (�J.-,V�7 ' . • `��:� Ordinance ,� Green sheet � ,S3/3 � RESOLUTION � TY OF SAINT PAUL, MINNESOTA Presented B Referred To Commi tee: Date 1 730 North Fairview Avenue: Rec�uest for 2 Analvsis And Recommendation Respectina 3 Remedial Action 4 5 WHEREAS, the pr perty at 730 North Fairview Avenue, Saint Paul, is improved by a 2-1/2 6 story wood frame and b ck exterior walk-up apartment comples built in 1960 consistinQ of eleven 7 one bedroom units (thre at garden level and four on each of two remainin� floors) with off-street 8 parking for eight to ten ars; and 9 . 10 WHEREAS, follo 'ng an inspection on 7anuary 29, 1986, on February 3, 1986, the � 11 Department of Fire and afety Services notified the property owner that certain code deficiencies 12 existed which required c rrection before renewal of the Certificate of Occupancy for the building; 13 and 14 15 WHEREAS, on A ril 16, 1986, July 24, 1986, and December 2, 1986, further notices were 1F,�.. sent to the owner witho t response; and 18 � WHEREAS, on J y 22, 1987, the property and huilding were reinspected and pursuant to 19 Section 2.201(b) of the innesota Uniform Fire Code and Section 34.19 of the Saint Paul 20 Legislative Code, on No ember 25, 1987, a Notice of Condemnation and Order to Vacate was 21 posted on the premises y the Department of Fire and Safety Services for vacation effective . 22 December 26, 1987; and � _ 23 24 WHEREAS, the b ilding has remained vacant since December, 1987, and the owner has 25 taken no steps to sell th property, or to remedy fire and other code deficiencies and obtain a 26 Certificate of Occupan ; and . 27 � 28 WHEREAS, on F bruary 2, 1990, the property and building were inspected after issuance of a 29 search warrant permitti g City entry for that purpose and found to be suffering from further 30 extensive, but apparentl non-structural water dama�e; and 31 32 WHEREAS, the wner has been contacted by realtors, prospective developers and 33 neighborhood residents especting sale and purchase of the property; and 34 35 WHEREAS, beca se of inadequate maintenance, physical damage and abandonment the 36 building constitutes a fi e hazard as well as a blight upon and detriment to the neighborhood and 37 the value of abutting pr perties, which conditions require remedial public action; and 38 . 3°. . WHEREAS, ther is a shortage of adequate, safe and sanitary housing in the City and the �.'��:��' building may be feasibl for rehabilitation or renovation for rental housing use in which event its 41� acquisition and repair ould be more desirable than its demolition; now therefore, be it 42 43 v � � � V11Vl�1L_ ' - . - r q� - �� 1 RESOLVED by the Council of the City of Saint Paul that in view of the foregoing recitals, 2 the Mayor is hereby requ sted (1) to analyze the condition of the property and buildin� and the . - 3 feasibility of its rehabilita �on or renovation, (2) to prepare cost estimates for (a) proceeding tivith � demolition of the structur under statutory or code procedures, and (b) acquisition of the property � and its (i) rehabilitation eleven one bedroom units, or (ii) renovation with fewer, larger units, (3) o to make recommendatio for City Council remedial action respectin; ihe property and (4) to 7 suggest ways and means, ' cluding budget actions necessary, to implement these recommendations; 8 and be it 9 10 FURTHER RESO VED that the Mayor is requested to report to the City Council 11 expeditiously within two eeks of practicable, but in any event no lon�er than thirty (30) days from 12 the date of Council adopt on of this Resolution, in order that the Council may proceed without 13 further delay to consider emedial action respecting the property at 730 i�Torth Fairview Avenue. Yeas Navs Absent Requested by Department of: Dimon Gosw2tz L on Macca ee Rettman T une Wz son By= Adopted by Council: Da e Form Approved by City A orney Adoption Certified by C uncil Secretary By: � By' Approv by Mayor for Submission to Counci • Approved by Mayor: Da e _ By: By: qJ - �v�� - 0: ;- CITY OF SAINT PAUL INTERDEPARTMENTAL MEMORANDUM B ) � � DATE: August 16, 1990 R�cE�vEa�� -,�; T0: Albert Olson �"�±�0'�QQO V�� .r.i FROM: Sheri emberton ,Q�P ��TY CLERK RE: City ouncil Public Hearing August 30, 1990 Attached is a cop of a Public Hearing which was published in the St. Paul Pioneer Press on aturday, August 18, 1990. Please place this Public Hearing on the City Council Agenda for Thursday, August 30, 1990. A City Council Resolution is being routed for signatures and will be forwarded to you by the City Attorney's Office, prior to the City Council meeting. Thank you. SAP:lk Attachment cc: Jim Hart ��-�� NOT CE OF PUBLIC HEARING UPON PROPOSED PROPERTIES ' AC UISITION OF A PARCEL OR TRACT OF LAND IN THE LINE-MIDWAY DISTRICT 11 REDEVELOPMENT AREA NOTICE IS HEREBY IVEN of a Public Hearing before the COUNCIL OF THE CITY OF SAINT PAUL, in th Council Chambers, City Hall, 15 West Kellogg Boulevard, Saint Paul, Minne ota, on Thursday, August 30, 1990, at 9:00 a.m. Central Daylight Time, up n the proposal of the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota, to acquire by negotiation or by eminent domain, a parcel r tract of land located at 730 North Fairview (vacant building) , as mor specifically addressed below, which constitutes a hazardous building within e definition of Minnesota Statutes, section 463.15 Subd. 3 is substandard a d is eligible for public acquisition pursuant to authorization of Minnesota Statutes, Section 469.012 Subd. 1(7) . Upon said Public Hearing, the Council shall consider whether the acquisition of the propertie identified by street address and legal description as follows: 730 North airview Lot 11, Block 12, College Place West Division according to the recorded plat thereof and situate in Ramsey County, Minnesota. is necessary or esirable in order to carry out the objectives of the City Wide Redevelopm t Plan, and the revitalization of this hazardous building. That the propos 1 for public acquisition and sale for private renovation and rehabilitation ill afford maximum opportunity consistent with the sound needs of the communit as a whole for the provision of housing. At said Public earing all interested persons may appear before and will be heard by the Co ncil upon proposed acquisition of this property. Dated this 16th day of August, 1990. � ALBERT B. OLSON CITY CLERK _ �o _:��, $� , 6�tT� oP CITY OF SAINT PAUL �� . DEPARTMENT OF PLANNING AND ECONOMIC DEVELOPMENT � � a DIVISION OF HOUSING e ��jj�j j�jj a 25 West Fourth Street,Saint Paul,Minnesota 55102 �m ^° 612-22&3361 �a s• Fax:612-228-3220 1AMES SCHEIBEL MAYOR August 16, 1990 Rosemary Frank Pioneer Press 345 Cedar Street St. Paul, Minnes ta 55101 RE: LEGA NOTICE Dear Ms. Frank: Enclosed is a No ice of Public Hearing. Please publish this Notice in the Pioneer Press on Saturday, August 18, 1990. If you have any uestions, please do not hesitate to contact me at 228-3358. Sincerely, i��'�� ' � Sheryl A. Pembe ton Real Estate Adm"nistrator SAP:lk Enclosure bcc: Chron Parcel Legal Jim Hart Ed Starr �� • , � ed �j' B . �� e. v.cv�ec- : • p�� RE S OLUT I ON N0. 90-8/14-9 . ri � V�,�� C�� R SOLUTION SCHEDULING A PUBLIC HEARING AND , - � A THORIZING ACQUISITION AND DESIGNATING � � �� T TATIVE DEVEIAPER OF PROPERTY AT 730 NORTH � � '°` _ ,._:., ;_ _,� - IRVIEW HAMLINE MIDWAY DISTRICT 11 ' � � - � � WHEREAS, the prope ty at 730 North Fairview Avenue is improved by a 2-1/2 � story wood frame a d brick exterior walk-up apartment complex built in 1960 - k consisting of ele en, one-bedroom units with off-street parking for eight to ten cars; and WHEREAS, following an inspection on January 29, 1986, on February 3, 1986, the Department of Fire and Safety Services notified the property owner that certain code defic encies existed which required correction before renewal of the Certificate of Occupancy for the building with notices again served on April 16, 1986, Ju y 24, 1986, and December 2, 1986 without response; and • WHEREAS, on July 2 , 1987, the property was reinspected and on November 22, 1987, a Notice of ondemnation and Order to Vacate was posted on the premises for vacation effec ive December 26, 1987, the building has remained vacant and the owner has take no steps to sell the property, or to remedy fire and other code deficiencies; and WHEREAS, the Dist ict Council, neighborhood residents and real estate agents/developers have contacted the property owner indicting an interest to purchase and reha ilitate it for housing, the owner has indicated no interest in selling the bu lding or maintaining it; and WHEREAS, -tir� on of continued inadequate maintenance, physical damage an u sanitar condit'o u' din constitutes a fire hazard, and �a blighting influence and detriment to the neighborho d and abutting properties, which conditions require remedial , a public action; an WHEREAS, the Haml"ne Midway Coalition, neighborhood residents and City staff continued to eval ate various options for resolving this continuing blighting influence on the eighborhood, in hopes of securing City action for resolution of this problem, four options were presented to the Housing and Economic Development Comm"ttee (HEDC) on March 14, 1990; and WHEREAS, HEDC ap roved Option 4 recommending soliciting proposals for a period of 60 days, offe ing a commitment to provide $115,000 in CDBG Rental Rehab funds towards de elopment and that if developer interest is established, with private financin source to help supplement the project, HEDC would recommend the HRA/City pro eed with acquisition, of 730 North Fairview; and WHEREAS, over fi ty letters were sent out by the Hamline Midway Coalition and PED soliciting d veloper interest in the purchase and rehabilitation of 730 North Fairview t is undertaking allowed the neighborhood and the City to determine if the e was a developer willing and able to bring other financial resources to be to allow the development of this property; and WHEREAS, the ne'ghborhood received five proposals covering the rehabilitation of this buildin , presentations to the neighborhood were made on July 9, 1990 with the neighb rhood selecting the partnership of Kent Hagen and Hubert Nelson, who pro ose to purchase and totally rehabilitate the building as 11 � . . . ��-�5�7 1-bedroom units re ting at $405-$425 per month and have the financial resources to carry overall development cost of $220,000-$240,000 which include / both acquisition a d rehabilitation costs; and WHEREAS, the buil ing continues to remain vacant and deteriorating, the City Council has taken abatement action against the owner of 730 North Fairview over the last mon and previously, with no willingness shown by owner that this issue will i prove. NOW, THEREFORE, B IT RESOLVED by the Housing and Redevelopment Authority of the City of Saint Paul, in view of the foregoing hereby adopted findings that the public acquis tion of 730 North Fairview legal described as: Lot 11, Blo k 12, College Place West Division is in accordance ith the City Wide Redevelopment Plan and is hereby approved in accordance wit these findings: 1. That a publ'c hearing is hereby requested to be held before City Council on August 3 , 1990 concerning the acquisition of this property. 2. , > > . , 2. That the b ildin at 730 North Fairv' w " be n vacat d since December 26 1987• that t e Fairview a d which ac uisition is hereb a roved constitutes a ' hazardous uildin within the definition of Min u d a d 's e i 'ble ursuant t authorization of Minnesota Statutes e 1(7) . 3. That t p�o, o�cal� o ubl" ac ui it'on and sale for "v the property at 730 North Fairview ��-�a --�� will afford maximum opportunity, consisten with the sound needs of community as a whole, for the provision of-�-:r housing by redevelopment of existing housing by private enterpris and the acauisition bv negotiation or by eminent domain ;G w'n a v . 4. That in a cordance with Minnesota Statute 117.52 all acquisitions undertake by an acquiring Authority, which Authority shall provide all relocatio assistance, services, payments and benefits, if necessary, in accord nce with the Uniform Relocation Assistance and Real Property Acquisiti n Act of 1970 (24 CFR 42 and 570.1 CDBG regulations contained in HUD Ha dbook 1377, effective April 1, 1989) . . ' �� r ,�,'-�� - ; . . �,� S. That, ac ui ition of the q property herein may be acquired by direct purchase or exercise the power of eminent domain together with a quick-take ction and further request needed legal action to secure property fr m further deterioration. 6. That, pursu nt to Chapter 548, La.ws of Minnesota 1984, it is hereby certified t at said property meets the conditions of Minnesota Statutes Section 273.73, Subdivision 11 and are exempt from property taxes under Sections 27 .02, Subdivision l, clause (7) and 469.040, Subdivision 1, until sold or private redevelopment. 7. That acqui ition of the property herein identified is necessary in order to remove onditions of blight constituted by this vacant and substandar building which exist in the Hamline-Midway District 11 area and to car y out the necessary redevelopment to provide housing for low/modera e income families. 8. The HRA bu get is amended as follows: Current Amended Budget Chan e�s Budget FINANCING PLAN 132 New Housin Development Fund 132-36410-98 0 Use of Fund Balance -0- 60 000 $ 60,000 Change to Fina cing Plan 60 000 SPENDING PLAN 132 New Housing Development Fund P6-132-36 10-OS51-64429 -0- 60 000 $ 60,000 730 North Fairview Net Change to Spending Plan 60 000 9. That, HRA designates Kent Hagen and Hubert Nelson as tentative developer for a per od of 90 days commencing on the date of transfer of 730 North Fairview o HRA in order to finalize all documentation necessary to consummat the purchase after acquisition. . . � -1--L � .5�-1�� . .. . NOUSINA AND REDEY LOi'MENT AUTN06�ITY OF THE CITY OF SAIMT PAUL, MIPlNESOTA RE�ORT TO TNE C��A ISSIO�IEAS DATE Au�st 9, 1990 RE6ARDlN6 AUTHO IZATION TO SCHEDULE PUBLIC HEARING BEFORE CITY COUNCIL TO MAKE ECESSARY FINDINGS, SUBSEQUENTLY PROCEED WITH ACQUISITION AND , DESI NATE DEVELOPER FOR 730 NORTH FAIRVIEW, HAMLINE-MIDWAY DIST ICT 11 On August 8, 199 , the Housing and Economic Development Committee (HEDC) �considered and r eommended for approval by HRA the acquisition and tentative developer design tion of 730 North Fairview. The following co tents are attached for your consideration and approval. 1. HRA Report dated August 2, 1990 presented to the HEDC 2. HRA Resol tion 3. Original eport to HEDC dated March 14, 1990 4. City Coun il Resolution 90-293-Request for Analysis and Recommendation Respectin Remedial Action on 730 North Fairview ` Sheri Pemberton . ��- ,U;�� NOUSiM611a0 RED ELOPME�JT AUTHORITY OF TNE CfTY 0� SAIMT PAU1, NIIi�WE�OTA � �EPO�T TO THE C NINII�tOR1ERS DATE August 2, 1990 R�GA�Di�G AUT ORIZATION TO SCHEDULE PUBLIC HEARING BEFORE CITY COUNCIL TO . MAK NECESSARY FINDINGS, SUBSEQUENTLY PROCEED WITH ACQUISITION AND DES GNATE TENTATIVE DEVELOPER FOR 730 NORTH FAIRVIEW, HAM INE-MIDWAY DISTRICT 11 BACKGROUND The property at 730 North Fairview Avenue is 'improved by a 2-1/2 story wood frame and brick exterior walk-up apartment comple:c built in 1960. The building consis s of eleven, one-bedroom units (three at garden level and four on each of the wo remaining floors) with off-street parking for eight to ten cars. Following an in pection on January 29, 198b, on February 3, 1986, the Department of F re and Safety Services noti€ied the property owner that certain code de iciencies existed which required correction before renewal of the Certificate of Occupancy for the building. Notices were again served on the owner April 16, 198b, July 24, 198b, and December 2, 1986 without response. On .7 ly 22, 1987, the property was reinspected and on November 22, 1987, a Notice f Condemnation and Order to Vacate was posted on the premises for vacation ef ective December 26, 1987. Since that time the building has remained vacant and the owner has taken no steps to sell the property, or to remedy fire and other code deficiencies. The property co tinued to remain vacant and deteriorate. The City abtained a search warrant 'n February, 1990, to enter the building to determine extent of additional dama e and secure from entry. The District Co ncil, neighborhood residents and real estate agents/developers have contacted he property owner indicting an interest to purchase and rehabilitate it for housing. The owner has indicated no interest in selling I 1 . . 1� --� �� • " '� the building or m intaining it. The continued inadequate maintenance, ' physical damage a d abandonment constitutes a fire hazard and a blighting influence and det iment to the neighborhood and abutting properties, which conditions requir remedial public action. The Hamline Midwa Coalition, neighborhood residents and City staff continued � to evaluate vario s options for resolving this continuing blighting influence on the neighborho d. In hopes of securing City action for resolution of this problem, four op ions were presented to the Housing and Economic Development Committee (HEDC) on March 14, 1990 (see attachment) . Option 4 was selected. OPTION 4: Solic t Pro osals from Develo ers to Rehabilitate the Buildin : Under this scena io the City decided to solicit interest from potential developers. A 1 tter would be drafted indicating anticipated acquisition and rehabilitation c sts and indicate that a maximum loan of $115,000 could be made available f om CDBG Rental Rehab Program at 2� for 30 years. Another possibility woul be to apply for a Federal Supportive Housing Demonstration Grant and develo the property for transitional housing use. Benefits: 1. Thi proposal allows the City to determine if there is a developer wil ing and able to bring other financial resources to bear to all w the development of the property. 2. If eveloper interest is determined, the City would proceed with con emnation with the knowledge that redevelopment of the property wou d be feasible and imminent. Costs: l. The building will continue to deteriorate from water damage due to a ole in the roof and the cost to rehabilitate the structure will in rease over time. 2 � . � �'�'" y�r�'� ' HEDC ACTION Marc 14 1990 HEDC approved Opt on 4 recommending soliciting proposals for a period of 60 days. A commitme t to provide $115,000 in CDBG Rental Rehab funds towards development be of ered. That if developer interest is established, with private financing source to help supplement the project, HEDC would recommend � the HRA/City proc ed with acquisition of 730 North Fairview. Over fifty letter were sent out by the Hamline Midway Coalition and PED soliciting devel er interest in the purchase and rehabilitation of 730 North Fairview. This ndertaking allowed the neighborhood and the City to determine if there was a d veloper willing and able to bring other financial resources to bear to allow the development of this property. Letters of Intent were due by June 1, 1990. CURRENT STATUS The neighborhood received five proposals covering the rehabilitation of this building. Sever 1 neighborhood meetings were held, with the developers making their presentati ns to the neighborhood on July 9, 1990. The neighborhood selected the pa tnership consisting of Kent Hagen and Hubert Nelson, who propose to purc ase and totally rehabilitate the building as 11 1-bedroom units renting a $405-$425 per month. The proposed developers have the financial resou ces to carry on overall development cost of $220,000-$240,000 which must incl de both acquisition and rehabilitation costs. Kent Hagen is a active member of the community and has a strong interest in resolving this eighborhood problem. He has done development work in the neighborhood th t has been extremely successful. Hubert Nelson, owner of Nelson Brothers Construction is also a local City business and brings strong construction e ertise to the project. The fact that both parties have the personal skill to undertake this development allows cost savings in the rehabilitation to some degree. 3 � �o -1�� ` The building cont'nues to remain vacant and deteriorating. The City Council has taken abateme t action against the owner of 730 North Fairview over the last month and pr viously, with no willingness shown, that this issue will improve: The Opt ons to demolish this property as outlined in the March 14 report basically emain the same. Option 3 is revised. � REVISED OPTION 3: HRA Ac uires and Private Develo er Purchases Rehabilitates Buildin throu h se of CDBG Loan The Housing and edevelopment Authority acquires the property in accordance with Mn. Statute 469.012 (6) and (7) and under eminent domain proceedings Mn. Statutes 117. The estimate for acquisition of the property is $60,000, plus staff costs. The proposed dev. loper indicates a rehab cost of $210,000 which allows for a potential acquis tion purchase price of approximately $30,000. Under current gu delines, the HRA could provide a CDBG Rental Rehabilitation Loan to a develo er to assist in project financing. This loan provides a maximum of $115, 00 for a project of this size and has a period of 30 years at 2$ interest. Benefits: l. The property is purchased and rehabilitated and becomes a positive con ributing factor to the neighborhood and the City. - 2. Cit no longer has to secure and maintain the property through the aba ement process. 3. Aff rdable housing units are provided at a cost of $25,500 per unit, compared to $40,000 per unit for similar new construction. Costs: l. Co ts that are not recoverable are a portion of the acquisition " an maintenance costs $35,000 plus staff costs and legal costs th ough condemnation averaging $10,000, 4 � . � . ��-. ,��'�� ' In reviewing the tions, staff recommends Revised Option 3, to do so the following actions need to be taken: HRA approve acquisition of 730 North Fairview through eminent domain and Quit Take A tion. Designate $60,000 from the New Housing Development Fund for ac uisition of which approximately $30,000 will be reimbursed from sale. HRA request the Court to grant authority to take all necessary action to secure the uilding specifically the roof to prevent further deteriorat"on of the structure prior to title and possession. City Counc 1 hold a public hearing concerning the acquisition and make � the necess ry findings (blighting influence, vacant and hazardous building) eeded to proceed with eminent domain. 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" " _' 1 '�_ �" _ -_ •• _ _ � • '� ��, D� �� c� --= � mmmmmcno m zis� �s �,� �� -+-1 �� o Nv� � � a a p_+ � ca n� �" 4 in.a. c'a U t� _. cn y 3� � °' 1 �� o a ca �'v-+ � O s1� a�.�� x C'f y n -j � CJ N 1 � � N � T m � � � � � a p � ' � � ''' - o Q �` y `° � c � 3 �O b y � � � ^ . �p ''G �C II] � � • � � . a O � a � � O O • . . �v->��7 - - ��QU3��t8 A�1D RE�E�f �.OPNlE�iT AllT�IORITY 0� T�� C�TY OF SAI�T PAUL, PAi@1Nf�OTA REPaRT TO THE HOUS NG AND �ECONOMIC DEVELOPMENT COMMITTEE ' DATE: March 4, 1990 RE: DEVELO MENT OPTIONS FOR VACANT APART'�IENT AT 730 NORTH FAIRVIEW The following stud of development� options for the vacant apartment building at 730 North Fai iew Avenue looks at the feasibility of various demolition and rehabilitatio scenarios. The Midway Coalition has expressed an inczrest in working with a non-profit development group to rehab the building for rental housing. hey feel the area would' provide a good mar'_�cet for housing marketzd toward s niors. OPTION l: HR.A Ac uisition D=molition and Sub�seauent Sale of L2r.d The City could ac uire the property through condemnation for an estimated ' � $100,000 and demo ish the apartment building for an additional $18,000. If the resulting lot could be soid for $20,000 the net City expenditure would total $98,000. Benefits: l. The cquisition price paid would allow recapture of abaLement costs and taYes. However, these expenses are again being paid by the ity through acquisition. - . 2. The ity avoids aevelopment costs and risks, yet removes a blig ting influence, . Costs l. The will incur additional maintenance, insurance and stazf time costs while the site is being marketed. 2. The idway Coalition has expressed their desire to see the buil ing saved, �nd is interested in working with a non-profit grou to restore the structure. ' OPTION 2: Demol'tion under Citv Nuisance Ordinance Under this scen rio the building will be condemned and demolished under the City nuisance o dinance. Demolition would initially be paid by the City ' ($18,000) , howe er a lien would be placed on the property in the amount of the demolition cost in addition to any current abatement costs and delinquent taxes that have been charged against the property. The land would continue to be owned by the present owner. Based on the owner's prior performance and current two yea s delinquent tax situation, it is likely that the property could go tax fo feit ar2d be available for redevelopment through taY forfeit auction in 1993 . � �. � �� --,�� Page 2 - Benefits: 1. This s enario �is the least expensive of the proposed options, and the bl'ghting influence is removed. . 2. It is ikely that the property could eventually be obtained throug tax forfeit action. Costs: 1. The si e may not reach its highest and best use as the current owner i11 retain control of the property. The City loses the opport nity to develop needed housing on this si�e. 2. It is ikzly t;at the City will continue to elperiznce problems with t e maintenance o= the property and will need �o take further abate ent action. OPT?ON 3 : HRA Aco ires and Private Develo�er Purchases/Rehabilitates Buildin throu h us2 of CD G Loan and Additional Public Financin ; Under current o i elines, the HRA could provide a CDBG Rental Rehabilitation Loan to a develop r to assis� in project financino. This loan provides a ma:timum of $115,0 0 for a project of this size and has a period of 30 years at 2$ interest. Thi loan must bz matched with outside dollars at a rate of 1 to 1. As the attached p o-forma analysis details, the project does not cash flow without additiona public subsidy of at least $137,000. Currently, there are no other City pro rams available for a project of this type. This building sho ld retain its present configuration of 11 1-bedroom units. Attempting to co ert some of the 1 bedroom units to 2 bedrooms would result in a net decrease in rent revenue and an increasa in development costs. benefits: l. Mark t rate housing units are provided at a cost of $25,500 per unit compared to $40,000 per unit =or similar new construction. Costs : 1. The roject requires additional City assistance totaling at least $137 000. 2. The RA will incur additional maintenance, insurance and staff time costs during the period that the propert�r is being offered for evelopment. • • • Page 3 • �J��S�� . i OPTION 4- Solici Pro�osals from Develo�ers to Rehabilitate the Buildin : Under this scenar"o the City would solicit interest from potential developers. A.letter would be drafted indicating anticipated acquisition and rehabilitation co ts and indicate that a maximum loa;z of $115,000 could be available from CD G Rental Rehab Program at 2� for 30 years. Another . possibility woul be to apply for a Federal Supportive Housir_� Demonstration Grant and develo the proper�y for transitional housing usa. Benefits: � l. This proposal allows the City to determine if there is a cevelo�er wi11 ng and 'cD12 to bring other financial resources to be�r to sllo the develooment of the property. 2. If d veZoper in�erest is determined, the City could proceed with cond mnation with the knowledge that redevelopnent of the prooerty woul be. feasible and imminent. Costs: � 1. The uilding will continue to deteriorate from water d�maae due to a ho e in the rooi and the cost to rehabilitate the structure will incr ase over time. RECOMZ?EVDATI ON Basad on the uncertainty o= being able to find a developer ar.a. the high costs involved with t is project, stafi feels that Option 4 allows t4e gre�test opportunity wit the least �nount of cost to the Cit�. If accepted, the solicitation pe iod would be between 30-60 days. -�� - ' � Sheri Pemberton . John Kimball SAP:lk ��T• . . . .� � . � v � t v n L - i r- � , � � I�',-�i � i��' Ordinance � ' • .. � > . �reen sheet � ,S3/3 RESOLUTION � TY OF SAINT PAUL, MiNNESOTA ��G�'� Presented B Referred To Commir.tee: Date 1 730 North Fairview Avenue; Reouest for 2 � Analvsis And Recommendation ResuectinQ � Remedial Action � 5 ti�Y,�-iEREAS, the p perty at 730 i�iorth Fairview Avenue, Saint Paul, is improved by a 2-1/2 6 story wood frame and br cic exterior walk-up apartment comples built in 1960 consistinQ oi eleven 7 one bedroom units (thre at garden level and four on each of rivo remair.in� floors) with ofi-street 8 .parkin� for eight to ten ars; and 9 � " . 10 WHEREAS, follo 'ng an inspection on January 29, 1986, on February 3, 1986, the � 11 Department of Fire and afety Services notified the property owner that certain code deficizncies 12 existed which required c rrection beiore renewal of the Certificate of Occupancy for the buildin�; 13 and 14 . 15 WHEREAS, on A ril 16, 1986, July 24, 1986, and December 2, 1986, further notices were 1�:�, sent to the owner witho t response; and 18 WHEREAS, on J ly 22, 1987, the property and huilding were reinspected and pursuant to 19 �Section 2.201(b) of the innesota Uniform Fire Code and Section 34.19 of the Saint Paul 20 Legislative Code, on N ember 25, 1987, a Notice of Condemnation and Order to Vacate. was 21 posted on the premises y the Department of Fire and Safety Services for vacation effective � 22 December 26, 1987; an � �� . . ' 23 24 WHEREAS, the uilding has remained vacant since December, 1987, and the owner has S taken no steps to sell t e property, or to remedy fire and other code deficizncies and obtain a 26 Certificate of Occupan ; and . _ ?� 28 WHEREAS, on ebruary 2, 1990, the property and buildina were inspected after issuance of a 29 search warrant permitti g City entry for tbat purpose and found to be suffering from further 30 extensive, but apparent y non-structural water dama�e; and 3I 32 WHEREAS, the wner has been contacted by realtors, prospective developers and 33 neighborhood residents respecting saie and purchase of the property; and 34 . 35 WHEREAS, bec use of inadequate maintenance, physical damage and abandonment the 36 building constitutes a re hazard as well as a blight upon and detriment to the neighborhood and 37 the value of abutting p operties, which conditions require remedial public action; and 38 � 3°�.. WHEREAS, the e is a shorta�e of adequate, safe and sanitary housing in the City and the ��`:�. building may be feasib e for rehabilitation or renovation for rental housing use in which event its 41� acquisition and repair ould be more desirable than its demolition; notiv therefore, be it 4? 43 i �-' • . i V 1 1 V / � j,_, _ -- ` . ' . � 9� `� �vrr�� - , . 1 ' RESOLVED by the Council of the City of Saint Paul that in view of the fore�oing recitals, 2 the Mayor is hereby requ sted (1) to analyze the condition of the property and building and the 3 feasibility of its rehabilitai on or renovation, (2) to prepare cost estimates for (a) proceeding �vith � � � demolition of the structur under statutory or code procedures, and (b) acquisition of the property � and its (i) rehabilitation eleven one bedroom units, or (ii) renovation with fzwer, larger units, (3) o to make recommendatio for City Council remedial action respecting the property and (4) to 7 suggest ways and means, ' cluding bud�et actions necessary, to implement these recommendations; � 8 and be it 9 10 FURTHER RESO VED that the Mayor is requested to report to the City Council 11 e:cpeditiously within rivo eeks of practicable, but in any event no lon�er than thirty (30) days from 12 the date of Council adopt on of this Resolution, in order that the CounciI may proceed without 13 further delay to consider emedial action respecting the property at 7�0 Nor�h Fairview Avenue. imonct Yea Navs Absent Reguested by Deoartment of: Goswitz • � . Lono Maccaoee ettman T vne � i son By: � Adopted by Council: D te Form Approved by City A�,torney Adoption Certified by ouncil Secretary / By: � By' Approv ' by Mayor for Submission to Counci � Approved •by Mayor: D te � . BY: By: