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CC Memo—2091 Hillview Road <br /> April 5, 1999 <br /> Page 2 <br /> contractors bidding on the redevelopment proposed by Reentry Services estimate costs for complete <br /> rehabilitation of the property to be$150,000+. Of which, abatement of code violations may only <br /> range from$30,000-40,000. <br /> 6) What other alternatives are available for acquisition and/or rehabilitation by the city for resale— <br /> similar to the Housing Replacement Program? <br /> a) The city may choose to purchase the building from HUD for$80,100 and sell the property <br /> through a request for proposal(RFP) on the open market requiring specific improvements be <br /> made to the building. <br /> b) The city may purchase and demolish the building and market the site for redevelopment. <br /> 7) What options are available to keep the property on the tax role? <br /> a) The city may choose to hire a contractor to perform the abatement requirements to meet <br /> minimum code compliance. By abating the code violations on the property,the city will be <br /> required to administrate and pay for the abatement procedure. HUD would then reimburse the <br /> city for incurred expenses after the property is sold. At the EDA meeting on September 8, <br /> 1998, the council directed staff to arrange for the abatement of the building pending no other <br /> development proposals. <br /> b) The city may purchase the property from HUD for the purposes of reselling the property(by RFP <br /> on open market)in the current condition contingent upon the buyer bringing the property into <br /> compliance with City Code requirements. The city may drop the abatement order on the property <br /> and allow HUD to sell the property on the open market. HUD has been unable to sell the <br /> property at auction because of the existing abatement order by the city. If the city chose to <br /> remove the abatement order,the property would be sold with no guarantee of being brought into <br /> compliance with City Code requirements and the long expensive abatement process would begin <br /> once again. <br /> DISCUSSION <br /> Reentry Services is proposing to acquire the property from the city with the intention of completely <br /> rehabilitating the building to provide transitional housing. The proposed redevelopment project has <br /> secured financial backing from two separate funding sources that would ensure a complete <br /> rehabilitation project. For Reentry Services to obtain the property, the City would need to purchase <br /> the property from HUD (at a 10% discount) and resell the property to Reentry Services. The <br /> purchase and resale would occur simultaneously at one closing. All closing costs are proposed to be <br /> paid by Reentry Services so there would be no costs incurred by the City. Essentially, formal <br /> approval by the EDA or City Council would be required to purchase the property from HUD for <br /> resale to Reentry Services and create a development/purchase agreement between the City and Re- <br /> Entry to ensure noncompliant code items are corrected as part of the redevelopment process. <br /> Staff has recently received requests from market rate developers to purchase the property for <br /> redevelopment(see attached letter from G/R Developers). The city may choose to facilitate a market <br /> rate redevelopment of the subject site. By acquiring the property from HUD for the purposes of reselling <br /> the property,the city may set the redevelopment criteria as part of the sale to a market rate developer. <br /> Since the abatement order was approved in June of 1997, minimal progress has been made to rehabilitate <br />