HomeMy WebLinkAbout06. 16-27JANUARY 26, 2016 16-27 RESOLUTION
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PURPOSE: APPROVE DISPOSITION OF PROPERTY AT 808 WEST 7
AVENUE TO THOMAS AND DIANE RUCK ($5,000.00)
INITIATED BY: COMMUNITY DEVELOPMENT
BE IT RESOLVED by the Common Council of the City of Oshkosh that 808 West
7th Avenue is hereby declared surplus and the proper City officials are hereby
authorized and directed to execute any and all documents necessary to sell said
property to Thomas Ruck.
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TO: Honorable Mayor and Members of the Common Council
FROM: Allen Davis
Community Development Director
DATE: January 20, 2016
RE: Approve Disposition of Property at 808 West 7th Avenue to Thomas &
Diane Ruck
BACKGROUND/ANALYSIS
The Department of Community Development entered into a residential rehabilitation loan
several years ago to facilitate repairs to the property at 808 W 7'" Avenue. Unfortunately, the
owner died, the loan was not repaid and the City foreclosed on the property in late 2013.
The property still requires substantial improvements to bring it up to code. The City offered
the property to Habitat but they declined. After the City took possession of the property in
2014, Mrs. Diane Ruck contacted staff expressing interest in the property. In November
2015, Mr. Ruck contacted staff indicating interest in purchasing the property as a single
family rental. Based on a walk through of the property, Mr. Ruck offered $20,000 for the
property realizing he would have to make an additional investment of between $30,000 and
$50,000 to bring the property up to minimum housing code standards. Based on the
improvements Mr. Ruck was considering, he had a contractor look at the house. The
contractor indicated there are substantial structural issues with the house, which could
potentially add an additional $50,000 to $75,000 in rehab costs. Mr. Ruck felt this was too
high of an investment based on the condition of the house and withdrew his original offer,
indicating that if the City would accept $5,000 he would demolish the house and construct a
new single family home.
In reviewing its options, if the City keeps the property and demolishes the house (beriveen
$20,000 -$25,000) and what the City already has invested in the property (rehab costs,
foreclosure, maintenance, etc. for an additional $30,000), the City could not sell the vacant lot
to break even. Staff believes the best approach is to sell the property as is for $5,000 to Mr.
Ruck who will construct a new single family, affordable home which will improve the
neighborhood and generate tax revenue.
Objectives of the City's Strategic Plan is to strengthen neighborhoods and create affordable
housing options. The property is located on the south side of Oshkosh in an older
neighborhood with the majority of housing on this block consisting of owner occupied
properties, ranging in assessed value from $55,000 to $90,000.
FISCAL IMPACT
The City will lose the $30,000 in CDBG funds it has invested to date in the property on the
rehabilitation loan, foreclosure costs and maintenance costs. If the property is not sold as is,
the City will invest an additional $25,000 to demolish the house. However, the sale of the
property as is would put the property back on the tax roll, use private funds to demolish the
old structure, and construction of a new single family affordable home could realize an
assessed value of approximately $90,000 which is consistent with the neighborhood. The
sale proceeds would be returned to the community development block grant (CDBG) housing
account to be used on additional owner occupied housing rehab projects.
Staff recommends the property be sold to Mr. and Mrs. Ruck for $5,000.
Approved,
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City Manager
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808 W 7TH AVE
808 W 7TH AVE
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808 W 7TH AVE
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