07-09-08 Council Agenda - Laserfiche WebLink

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MAYOR Bill Blesener COUNCIL Rick Montour Barbara Allan John Kcis Michael McGraw 515 Little Canada Road, Little Canada, MN 55117 -1600 ADMINISTRATOR (651) 766 -4029 / FAX: (651) 766-4048 Joel R. Hanson www.ci.little-canada.mn.us MEMORANDUM TO: Mayor Blesener & Members of the City Council FROM: Joel Hanson, City Administrator DATE: July 3, 2008 RE: Update on Acquisition of Manufactured Homes at Lots D, Terrace Heights As you know, we entered into a contingent purchase agreement with the owner of Lot D. There were two contingencies. The first is that the purchase price would be based upon an appraisal and would not exceed $50,000. The second required the execution of a Development Agreement with the owners of Terrace Heights to govern land transfers to accommodate widening of County Road B2. The agreement also required that closing take place within 60 days of execution (August 5`h). An appraisal has been obtained from Datacomp Appraisal Services. (This appraisal is for personal property only versus a standard real estate appraisal.) The value arrived at by the appraiser is $36,500. This is well under the $44,500 Ramsey County has valued the unit at and it is also dramatically less than what was paid for the unit in September of 2003 ($49,819). The owner had advertised the unit for over $50,000 and has indicated the $36,500 figure is unacceptable to him even though the terms of our purchase agreement indicate otherwise. The owner is also in a hurry for this sale to close. He is purchasing a new home in Duluth and needs to close to aid in the financing of the new house. He has also indicated he would accept the County's estimate of value as the purchase price if we can close in short order. I'm meeting with the owners of Terrace Heights Wednesday morning. My goal for that meeting is to agree on an outline for an agreement to govern land transfers relative to our needs for County Road B2. I will also try to generate a letter of understanding with Terrace Heights to document our intent to cooperate in the preparation of a development agreement. If that meeting goes well, I am prepared to recommend we close with the owner of Lot D based on a purchase price of $44,500. While this would be higher than the appraised value, it is consistent with the County's valuation and lower than the advertised price. It also keeps us in a "voluntary sale" which likely saves us money in terms of relocation costs. Given the fact that we can move this unit to another lot in Terrace Heights and then sell the unit (or use it to assist in the acquisition of one of the other units we need), we should not be financially disadvantaged by this transaction. If you have questions in the meantime, please let me know.