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<br />HRP Funding Request <br />2617 Sherwood Road <br />March 12, 2007 <br />Page 2 <br /> <br />1. Substandard as to condition, property value, size or usage. <br />2. Obsolete and having a faulty design for block and area in which it is located. <br />3. Deterioration which has caused blight to other adjoining properties. <br />4. Detrimental to the safety or health of abutting properties in the block. <br /> <br />If it is determined that the property is eligible for participation based on the condition <br />of the house, it must also meet the following criteria as outlined in 5-8 below. <br /> <br />5. A geographic mix of properties is achieved. <br />6. The site can be developed with a single family home within city code <br />requirements, including zoning and conformance with the Comprehensive Plan. <br />7. The property must be owner-occupied or vacant before the owner makes <br />application to the Program. <br />8. Prior to approval by the EDA for participation in the Program, properties over 50 <br />years old must be evaluated for historical significance. This will be accomplished <br />by forwarding general property information and a property photo to the <br />Minnesota Historical Society for review. The EDA will not enter into a purchase <br />agreement or award funding for demolition on a property which qualifies for the <br />National Registry of Historical Structures. <br /> <br />Staff has determined that the subject property meets the characteristics as noted in items 1, <br />2 and 4 above. Because the property meets at least 1 of the 4 outlined criteria; it must also <br />meet item numbers 5 through 8 of the policy to be considered for assistance by the EDA. <br />The property meets the criteria in item numbers 5, 6 and 7. The home is more than fifty <br />years old, however the house is not identified for historical significance, thus number 8 is <br />satisfied as well. <br /> <br />The Krigs believe that demolishing the house and building a new home would be in the best <br />interest for them, the City and the neighborhood. Staff agrees. <br /> <br />Policy Considerations: <br /> <br />The 2007 EDA budget has funds set aside to support the HRP program, and utilizing Option <br />2 of the program is a more cost effective way to leverage EDA dollars to accomplish the <br />goals of the program. Had the City’s offer of $140,000 been accepted by the previous <br />owners, the EDA would have funded the demolition anyway and would have marketed the <br />vacant lot to a developer for construction of a new home. Assuming the lot sold for <br />$100,000, the City would have un-reimbursed expenses in excess of $50,000, which would <br />represent the City’s re-investment back into this property. Over time the City would be made <br />whole by the additional taxes generated by the property. Funding the demolition alone would <br />result in a much lower investment by the City and a much shorter “pay back” time frame. <br /> <br />The HRP Policy guidelines do not place an upper limit on funding for either option. The last <br />demolition-only agreement entered into, the EDA funded 100% of the demolition. There are <br />no general criteria for participation in the program, thus any property owner may request <br />funding, regardless of how long they have owned the property or their financial need.