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HomeMy WebLinkAbout18. 22-427OCTOBER 11, 2022 22-427 RESOLUTION (CARRIED 5-2 LOST _______ LAID OVER _______ WITHDRAWN _______) PURPOSE: AUTHORIZE PURCHASE OF 211 HIGH AVENUE ($139,900.00) INITIATED BY: COMMUNITY DEVELOPMENT REDEVELOPMENT AUTHORITY RECOMMENDATION: Denied WHEREAS, the owner of 211 High Avenue is willing to sell the property to the City of Oshkosh; and WHEREAS, the Redevelopment Authority denied the acquisition of said property for $139,000.00 plus closing costs on September 21, 2022. NOW, THEREFORE, BE IT RESOLVED that the proper City officials are authorized and directed to purchase said property for $139,900.00 plus closing costs and execute all documents necessary to consummate this transaction. Money for this purpose is hereby appropriated from Account No. 0323-0740-6401-63020 Capital Improvement Project – Scattered Sites. City Hall, 215 Church Avenue P.O. Box 1130 Oshkosh, WI 54903-1130 920.236.5000 http://www.ci.oshkosh.wi.us TO: Honorable Mayor and Members of the Common Council FROM: Kelly Nieforth, Community Development Director DATE: October 6, 2022 RE: Authorize Purchase of 211 High Avenue ($139,900.00) BACKGROUND The adopted Imagine Oshkosh Plan identified the block between High Avenue, Division Street, Pearl Avenue, and Jackson Street as an “opportunity site” that is currently underutilized but would have a significant positive impact in the central city should it be redeveloped. Currently, neither the City nor the Redevelopment Authority (RDA) own any properties on the block. ANALYSIS The property being considered consists of multiple living units and was constructed in 1920. In the past, the property has had multiple code violations for zoning, minimum housing, property maintenance, and building code violations. The property has been listed for sale on the MLS for over three months with an asking price of $139,900. The assessed value of the property is $109,200 and the fair market value of the property is $131,800 as of 1-1-2021. RDA members and Common Council have indicated that they support targeted acquisitions in an effort to facilitate redevelopment efforts in the central city. The RDA considered the acquisition of the property on September 21, 2022, but ultimately decided not to pursue the purchase of the property. RDA members indicated that they believed the purchase price was too high, had concerns where the tenants would move to, and were apprehensive about purchasing the first parcel on the block when neither the RDA nor the City owned any other parcels. In response to the concerns shared by RDA members, staff indicated that the purchase price was close to the 2021 fair market value and believed the 2022 fair market value may be higher. City staff have told the owner that the closing date could be adjusted in order to give the tenants an opportunity to find comparable housing. The apprehension to acquire the first property on this block is understandable, but as staff indicated during the RDA meeting, if the City and RDA are committed to redeveloping in the City, we need to start acquiring when opportunities present themselves. The process to acquire enough land to create a developable site may take years, but City Hall, 215 Church Avenue P.O. Box 1130 Oshkosh, WI 54903-1130 920.236.5000 http://www.ci.oshkosh.wi.us that gives the City and the RDA an opportunity to spread out the acquisition costs and continue to support redevelopment throughout the entire city. FISCAL IMPACT Scattered Sites Capital Improvement Project funding will be used for acquisition of the property in the amount of $139,900.00 plus closing costs. The cost to maintain the property will be approximately $500 annually until a larger redevelopment site can be created with future acquisitions. RECOMMENDATION The Community Development Department recommends acquisition of 211 High Avenue for $139,900.00 plus closing costs. Respectfully Submitted, Approved: Kelly Nieforth Mark A. Rohloff Community Development Director City Manager 206 136325 319 303222338 309 303 322318 310 217 211 215222 250 135 144 150 300304 226 227 203 311136 #1136 #2141A141139A139132A 132B 132C136A 136B 136C 136D140A 140B 140C 140D 309D125 221 150HIGH AV HIGH AV JJAACCKKSSOONNSSTTALGOMA BLVD ALGOMA BLVD PEARL AV PEARL AV DIVISION STDIVISION STJ:\GIS\GIS_Base_Maps\Base Map.mxd User: annam Prepared by: City of Oshkosh, WI Printing Date: 8/30/2022 1 in = 100 ft1 in = 0.02 mi¯211 HIGH AVE211 HIGH AVE City of Oshkosh maps and data are intended to be used for general identification purposes only, andthe City of Oshkosh assumes no liability for the accuracy of the information. Those using theinformation are responsible for verifying accuracy. For full disclaimer please go towww.ci.oshkosh.wi.us/GISdisclaimer 206 136325 319 303222338 309 303 322318 310 217 211 215222 250 135 144 150 300304 226 227 203 311136 #1136 #2141A141139A139132A 132B 132C136A 136B 136C 136D140A 140B 140C 140D 309D125 221 150HIGH AV HIGH AV JJAACCKKSSOONNSSTTALGOMA BLVD ALGOMA BLVD PEARL AV PEARL AV DIVISION STDIVISION STJ:\GIS\GIS_Base_Maps\Base Map.mxd User: annam Prepared by: City of Oshkosh, WI Printing Date: 8/30/2022 1 in = 100 ft1 in = 0.02 mi¯211 HIGH AVE211 HIGH AVE City of Oshkosh maps and data are intended to be used for general identification purposes only, andthe City of Oshkosh assumes no liability for the accuracy of the information. Those using theinformation are responsible for verifying accuracy. For full disclaimer please go towww.ci.oshkosh.wi.us/GISdisclaimer __________________________________ Redevelopment Authority Minutes 1 September 21, 2022 REDEVELOPMENT AUTHORITY MINUTES September 21, 2022 22-08 Approve Determination of Necessity; Establish Fair Market Value; Authorize Purchase; 211 High Avenue ($139,900.00) Motion by Panek to approve 22-08. Seconded by Belter. Nieforth stated the property is located in an area targeted for redevelopment by several city plans. Staff saw an opportunity to acquire this property with the previous direction from RDA to be more strategic with their acquisitions. The property has had code violations in the past. It’s the property right behind the Town Motel on High Avenue. Palmeri asked how many units are in the building and if it could be rehabilitated for housing. Nieforth replied there are two units and it would likely be a large investment to rehabilitate the property. Hintz asked what other properties are there and how likely it is that those are going to be for sale. Nieforth replied sometimes it might take twenty years to acquire all the property needed for redevelopment in an area. She can’t guarantee that the surrounding properties will be for sale in the near future, but the Bella Cosmetology building along Pearl Avenue is available now. They’ve had conversations with owners of other properties on Pearl Avenue as well. They don’t get many opportunities to acquire properties in areas like this. Hintz asked if the seller has any other opportunities. Nieforth replied affirmatively. Stam asked for the listing amount. Nieforth replied $139,900. Palmeri asked if the fair market value is $131,000. Nieforth replied affirmatively. Hutchison asked what amount the RDA was offering to purchase the property. __________________________________ Redevelopment Authority Minutes 2 September 21, 2022 Nieforth replied $139,900. They have acquired properties for less in the past, but she thinks they should be prepared to offer asking price for properties in opportunity zones. Hintz asked what they have in mind for future development. Nieforth replied the Imagine Oshkosh Plan identified the area for mixed-use development. Palmeri asked for confirmation that they haven’t established a redevelopment plan or area there. Nieforth replied affirmatively. Hutchison asked if Nieforth was referring to the entire block as the redevelopment area. Nieforth replied the whole block is included in the Imagine Oshkosh Plan, but there are other opportunities for redevelopment in the area. Hutchison asked if RDA owns any other properties on the block. Nieforth replied no. Hintz stated we’re assuming the Town Motel would be there forever though. Panek asked if they would demolish the building. Nieforth replied affirmatively, adding there would be an additional cost for asbestos removal and tipping fees. Panek asked if the building to the right is a home. Nieforth replied the first floor is commercial. There might be units on the second floor, but she would have to check on that. Belter asked if they could try to offer a lower price. It’s not a $140,000 property with two rentals and needed repairs trying to get a 10% ROI. He asked if they think someone will buy it for $140,000. Nieforth replied they had an offer. She thinks it could be more expensive in the future if the RDA does not purchase it now. Belter replied it has an assessed value of $109,000. He doesn’t know if the price will necessarily go up with the multiple code violations. Nieforth replied she would look at the fair market value as they’re on the clock for a revaluation right now. __________________________________ Redevelopment Authority Minutes 3 September 21, 2022 Panek asked if they have the money. Nieforth replied affirmatively. Palmeri asked how much is in the Scattered Sites account. Nieforth replied close to $1,000,000. Panek asked if there is a timeline for using the funds. Nieforth replied no, but they would like to use it. The balance is higher now because they haven’t had many acquisitions in the last few years. Palmeri asked if it is currently rented. Nieforth replied affirmatively, adding they wouldn’t close on it until the tenants had secured another place to live. Hintz asked if any developers have expressed interest in the area. Nieforth replied they’ve talked with multiple people who have interest. Hintz asked what type of developments they’re interested in. Nieforth replied mixed use and commercial. They’ve also talked with people interested in Bella Cosmetology who need more room. Belter asked if they are going to scrape the building. Nieforth replied affirmatively. Belter asked if RDA would be paying $40 per foot for the dirt. Nieforth replied affirmatively. Belter replied it seems a little high. Nieforth replied staff could go back and renegotiate, but she can’t guarantee anything. Palmeri stated it’s not in a redevelopment plan. It’s in the older Imagine Oshkosh Plan, but she is concerned about the relocation of the existing tenants. It’s an opportunity, but she’s not usually in favor unless they have a specific vision. It’s also a bit costly. Panek stated it would make more senses if the RDA owned more property on that block. __________________________________ Redevelopment Authority Minutes 4 September 21, 2022 Belter replied it would make more sense if it was the final piece and not the first piece. Nieforth replied they have to start somewhere and this is an area that everyone talks about for redevelopment. They wanted to take advantage of the opportunity because they don’t come up very often. Hutchison asked if they were pursuing the Bella building. Nieforth replied they haven’t been because there’s been a lot of interest from the market. Palmeri asked what they’re asking for the Bella property. Nieforth replied she’s not sure. Hintz stated he doesn’t think it’s an awful investment, but it’s a long term investment. He questions whether it’s the best investment of $140,000 right now. Palmeri replied plus demolition and tipping fees. Nieforth replied the city would handle the demolition, so it’s just tipping fees. Hintz replied they’re banking on something happening in the very long term that might come along. Nieforth replied that’s what they’ve done in a lot of their redevelopment areas. Palmeri replied they have a lot of those sitting still with Jefferson Street being one of them. Hintz replied they need to acquire a lot of property there to redevelop the area and this would only be the first piece of property. Palmeri asked if the vacant lot behind it is privately owned. Nieforth replied affirmatively. The owner also has two properties on Pearl Avenue. Panek asked if acquiring this property might incentive nearby property owners to sell their properties to the RDA. Nieforth replied absolutely. Panek asked if that happens regularly. Pausma replied affirmatively, adding it’s what happened with 122 West 9th Avenue earlier this year. __________________________________ Redevelopment Authority Minutes 5 September 21, 2022 Belter stated they’re also establishing a comparable value of around $280,000 for the adjacent lots which are twice as big, so you’d have between $600,000 and $700,000 for a smallish lot on High Avenue. Motion failed 0-6.