04-14-2004 Council Agenda - Laserfiche WebLink

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99 qB (eCWatirea 515 Little Canada Road, Little Canada, MN 55117 -1600 (651) 766 -4029 / FAX: (651) 766-4048 www.ci.little- canada.mn.us MEMORANDUM TO: Mayor Fahey & Members of the City Council FROM: Joel Hanson, City Administrator DATE: April 9, 2004 RE: Rehabilitation of 594 E. County Road B2 MAYOR Michael 1. Fahey COUNCIL Jim LaValle ;Matt Anderson Rick Montour Bill Blesener ADMINISTRATOR Joel R. Hanson In planning for the rehabilitation of the above referenced house in order that we can fulfill place the property back on the market for sale, I have enlisted the assistance of the Greater Metropolitan Housing Corporation (GMHC). They have extensive experience in this type of project and have been doing work in Ramsey County through the Housing Resource Center. They also have many contacts and relationships in place that should allow us to accomplish this work at less cost than we could achieve in the open market. (For example, they use prison work release crews for demolition and other tasks as appropriate to generate substantial savings to the project.) Attached is a proposal for their services and an anticipated work scope. You will note their services will cost us $7,500. You will also note that the work scope is estimated at over $77,000. Coupled with our acquisition and other costs, this will generate total transactional expenditures of about $293,000. GMHC has reviewed this property with their real estate consultant. Based on the proposed improvements and the neighborhood, they feel a selling price of approximately $300,000 is sustainable. I have also received information from a local realtor (Bob Pedersen) that would seem to indicate a $300,000 price may be within reason when you consider the fact that this house will be in virtually new condition. (See information attached.) If we sold it for that price, the only expense I have not accounted for is real estate commissions. However, I would propose we attempt to sell the property ourselves, thereby avoiding this expense. I will also work with their construction manager to take advantage of any other cost saving opportunities that may arise. To expedite this project and bring to bear the appropriate expertise, I would recommend we approve the Proposal for Construction Management Services with GMHC as presented. I would also recommend we proceed with the proposed work scope as presented and authorize staff to modify it as appropriate. Please let me know if you have any comments or questions regarding this project.