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02-19-85 agendaHOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 8 Agenda February 19, 1985 Housing and Redevelopment Authority Commissioners City of Richfield Subject: Authorizing Continuation of the Voluntary Acquisition Program Dear Commissioners: Since 1980, the HRA has administered a property acquisition program called the "Voluntary Acquisition Program". This letter requests the program be continued for another year without modification. The program utilizes CDBG funds to acquire property according to provisions allowed in HUD acquisition regulations. Property owners who wish to participate in the program offer real estate for sale to the HRA. Staff, using the criteria contained within the program guidelines attached with this letter, negotiate the purchase price, purchase the property if authorized by the HRA,and plan the development of new moderate cost housing units. The cost of acquisition can be reduced somewhat because property owners must agree to waive relocation benefits.. Tenants, however, are entitled to receive benefits. The present phase of the program will end February 28, 1984. To continue in 1985, the program must be re- authorized by the HRA. Prior to March 19, 1984, the date the program was last considered by the HRA, four properties were acquired utilizing CDBG funds: Property 621 Pillsbury 6225 Harriet Cost of Acquisition $10,000 Estimated 1984 Market Value of Completed Development $~3 , 800 64 , 200 Comments Vacant site. 1 house constructed Vacant Site. 1 house constructed Deteriorated structure demolished, 1 house constructed 11,000 6822 Queen 41,000 78,000 -2- g20 W. 66th St. $52,400 $164,000 Abandoned structure removed 2 units constructed During the period March 1984, to February 1985, $385,000 in CDBG funds has allowed staff to acquire property and initiate the relocation of tenants at g10 W. 66th Street, 1016 W. 66th Street, g01-03 Rae Drive, 7245 Humboldt, and 6820-12th Avenue South. The West 66th Street and Rae Drive site development planning process is now underway. Staff anticipates that 8 to 12 additional housing units can be developed on the site. The final number of units will be determined by discussions with the neighbors, HRA and feasibility studies. (The structure at 1016 will be relocated to 7245 Humboldt and remodeled into a three bedroom single family home beginning in the Spring, (probably May). Regarding the lot at 6820-12th, staff is exploring the feasibility of moving the structure at 910 West 66th to this site. It would be extensively remodeled perhaps by a private firm. Without the Voluntary Acquisition Program, the HRA is required to pay relocation benefits to property owners. These benefits include a maximum payment of up to $15,000 to a homeowner for assistance in securing a replacement dwelling; a maximum payment of $4,000 should an owner choose rental housing when relocating; and full payment for moving personal property. The ownership of rental property is considered a business, thus the property owner is also eligible for up to $10,000 in relocation benefits because of a business loss. However, for absentee owned single family and duplex housing, the amount is usually $2,500. By participating. in the Voluntary Acquisition Program, the owners waive these benefits. However, tenants remain eligible to receive relocation benefits which usually amount to $4,000, to help pay for the increased cost of rent at a replacement unit. Payment of full moving costs is an additional amount of $500 to $1,000 typically.costs. .Extending the program into 1985 is important because it permits more economical acquisition and removal of sub-standard housing. Approximately $85,000 in CDBG funds was re-allocated in December by the City Council to the scattered site program. The funds must be expended by June 30, 1985. A portion of these monies will be utilized for ,the Rae Drive site to help pay for surveying, and legal costs. There should be sufficient monies available to acquire an additional scattered site property. There is adequate interest by property owners to permit the acquisition of additional property. As in the past, proposed purchases will be presented to the HRA. Negotiations will be initiated only on property identified as meeting the program objectives and selection criteria. -3- It is recommended that the HRA adopt the attached resolution authorizing the continuation of the Voluntary Acquisition Program for the period March, 1985 through February, 1986. pectf~l ~~~mitted , 'John G. "Cart'~cLig Executive Direct JCG/eja HRA RESOLUTION N0. AUTHORIZATION TO CONTINUE VOLUNTARY ACQUISITION PROGRAM WHEREAS, from time-to-time, the Housing and Redevelopment Authority in and for the City of Richfield (HRA) acquires property on a scattered site basis for developing housing opportunities; and WHEREAS, the Department of Housing and Urban Development (HUD) has regulations collectively called the "Uniform Act", which the HRA must adhere to when acquiring property with Community Development Block Grant funds; and WHEREAS, the HRA has operated a Voluntary Acquisition Program in accordance with those regulations, and wishes to continue operating this program. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield: That the Executive Director may proceed in administering the Voluntary Acquisition Program from March, 1985 through February, 19$6. Passed by the Housing and Redevelopment Authority in and for the City of Richfield this 19th day of February, 1985. Thomas E. Harms, Chairman ATTEST: Joan Helmberger, Secretary VOLUNTARY. ACQUISITION PROGRAM GUIDELINES Program Objectives -Eliminate the blighting influence of substandard housing, thus improving residential neighborhoods. -Increase the supply of available standard housing in the city through new construction and substan- tial rehabilitation. -Alleviate .the shortage of standard housing for low and moderate-income families. These. objectives will be achieved through acquisition of improved property or vacant lots. Definitions HRA: Housing and Redevelopment Authority in and. for the City of .Richfield HUD: The Department of .Housing and Urban Development Voluntary Acquisition: The acquisition (purchase) of real property rich results fran a voluntary proposal to sell fran the owner in response to a public invitation or solicitation for offers. Purchase Procedures 1 Property will be purchased on a "Solicitation of Sale" method of advertising in accordance with HUD regulations and direction. A sample solicitation is attached as Exhibit A. 2) Sale to the HRA must be on a voluntary basis. It is the responsibility of the property owner to respond to a "solicitation" by indicating in writing a willingness to sell with a voluntary waiver of relocation benefits. Tenants are entitled to receive relocation benefits prescribed by HUD regulations. 3) Once a "willingness to sell" written offer has been received, a purchase price can be negotiated dependent on funding availability and. HRA authorization. 4) The HRA will not buy the property unless a mutually satisfactory negotiated purchase price is determined. 5) The negotiated price will be a justifiable public expenditure. 6) Once a negotiated price has been reached, a purchase agreement and "waiver of relocation payment" form (Exhibit B) may be executed by the seller. These seller authorized agreements are effective only if the HRA authorizes the purchase. -2- 7) Purchase may. proceed once .the acquisition is authorized by the HRA. 8) HUD must review and approve the program. .The approval will be for one year Property Selection Criteria Property will be inspected, evaluated and recommended for purchase if it meets criteria ~~1, a or b or c or d; and 4~2 or ~d3 1) The property ist . a. substandard as to condition, size or usage. b. .obsolete and of faulty design for the block and area in which it is located. c. a deteriorating factor which has caused blight to other adjoining properties. d. detrimental to the safety or health of abutting properties in the. block... 2) The .parcel could become a marketable lot which could provide a site for new housing or substantially rehabilitated housing. 3) Property which has been voluntarily proposed for purchase by the owner which in the judgement of the HRA would help alleviate the shortage of housing for low and moderate-income families if acquired. Exhibit A THE RICHFIELD HRA IS BUYING HOUSES IN RICHFIELD We're paying cash for the .right property with no sale fees! If you own a small house, a house located toward the rear of the lot, a house in .need of considerable repair, or a vacant lot, the Richfield Housing and Redevelopment Authority may be interested in purchasing it. The purpose of acquiring these parcels is for the development of family housing. The cash sale must be on a voluntary basis and a mutually satisfactory purchase agreement must be negotiated before the HRA will acquire the property. The owner-seller must submit a written offer to sell which mentions a willingness to waive relocation benefits. If you own rental property with tenants, they may be eligible to receive relocation assistance. Offers will be accepted 198 to , 198. Qualifying properties will be considered for purchase as funds become available. Written offers and questions regarding the program may be directed to: Exhibit B WAIVER OF RELOCATION PAYMENTS RELOCATION RIGHTS OF PROPERTY OWNERS UNDER THE UNIFORM ACT The Uniform Act Under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of:1970 (Uniform Act) eligible property owners who are displaced by a public project receive: 1. Payment for Moving Expenses This may be eit er a fixed payment, including dislocation allowance, up to $500, or a payment for ~aetual moving costs. 2. Replacement Housing Payment This may be a payment up to $15,000 to purchase's home or a payment up to $4,OOD to rent a dwelling. 3. Fixed Payment in Lieu of Moving and Related Expenses The owner of a rental property may be eligible for this payment which ranges. from $2.,.500 to $10,000.. If the rental property to be acquired qualifies for this payment,. the amount of benefits is determined by the income produced during the two previous tax years. 4. Other Relocation Assistance - This includes housing referrals and other assistance to help the owner relocate to a comparable, decent, safe, and sanitary dwelling. Under the regulations of the Department of Housing and Urban Develop- ment (HUD), the owner cannot be required to move from his home unless he is given reasonable. opportunities to relocate to a comparable, decent, safe, and sanitary dwelling that he can afford. I, am the owner of the property at I have voluntarily submitted an offer to sell this property to the Housing and Redevelopment Authority of Richfield.. On a representative of the Richfield HRA discussed with me the relocation payments and other assistance provided under the Uniform Act. It was explained to me that I cannot be required to sell this property to the Richfield HRA unless I am given these relocation payments-and other assistance. It was further explained that the Richfield HRA will not acquire the property from me unless I voluntarily enter into the agreement of sale and .also agree to waive my rights under the Uniform Act. -2- I understand the basic requirement of the Uniform Act. I know that I cannot be required to sell the property to the Richfield HRA unless given the relocation assistance required by the Uniform Act. However, I VOLUNTARILY WAIVE MY RIGHTS TO ANY RELOCATION PAYMENTS AND OTHER RELOCATION ASSISTANCE UNDER THE UNIFORM ACT FOR WHICH I MAY BE ELIGIBLE IN CONNECTION WITH SUCH A SALE. This waiver shall expire on ,unless by that date the Richfield HRA has entered into a written agreement to buy the property from me. Signature Date Witness Date HOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 7 Agenda February 19, 1985 Housing and Redevelopment Authority Comissioners City of Richfield Subject: Acquisition of Vacant Lot at 6941-45 Penn Avenue Dear Commissioners: The vacant parcel located at 6941-6945 Penn Avenue has been offered for conveyance to the City of Richfield and its HRA by Hennepin County. The parcel was forfeited to the State of Minnesota for non-payment of property taxes. This letter describes the property, suggests interest and concerns in development of the property and explains why action is necessary to respond to .this offering within the next three weeks. The property is located at the intersection of 70th and Penn Avenue and has dimensions of 110' x 133.5' (14,952 sq. ft.). It is zoned multiple Residential (MR-2). Since 1971 the site has been owned by three different individuals/organizations and five different housing development projects have been proposed for the site. These proposals ranged from ownership townhouses to a three story, six unit apartment building. The most .recent owner, suggesting eight one-bedroom/efficiency condominiums be constructed, was unable to market the units and subsequently tax forfeited the property. A maximum of 8 units is permitted on the site as a result of previous variance approval. This property can be conveyed to the HRA at no cost. Legal fees of approximately $1,500 would be necessary to ensure the clear title of the property. In a conveyance process, the HRA would never hold title to the property, but a state statute provision allows the HRA to sell the property to a developer. This sale could be at little or no cost to the developer so development costs could be kept low and the subsequent housing kept-more affordable. A number of concerns must be addressed prior to requesting the county to authorize conveyance to the HRA: -Soil conditions; -Flooding potential (the property is located in one of the designated "drainage " problem areas in the city); -2- -Acceptance by neighborhood of housing development; and, -Determination of what types of housing units are suitable for the site. Staff will also review the affordability of housing on the site. It might be suggested that a land writedown for the developer would substantially decrease the per-unit expense that previous proposals might have experienced, therefore making the units more affordable. It is necessary for staff to notify Hennepin County prior to March 18, 1885, that the HRA is exploring the potential for conveyance and development of this .property and request the county to remove it from public auction rolls. Such a request will allow the additional time needed by staff to examine the concerns identified above. If the staff determines that the site is feasible for housing, the Planning Commission will be asked to make a finding as to the conformance of the acquisition and disposition with the Comprehensive Plan probably in March. With a favorable response, the HRA will be requested to adopt a resolution formally requesting the conveyance in April or May. pect fitted, John G. Cartight Executive Director JGC/eja