Agenda Packets - 2002/04/01 - Laserfiche WebLink

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Rental Property Report April 1, 2002 Page 2 a shut-off notice has been issued. Structurally, there are some issues with the house that will require substantial repairs to be made in the near future if the City intends to continue utilizing the property as a rental. The City has already spent hundreds of dollars repairing roof deficiencies and servicing the oil-fired furnace, with the work done best described as a stop-gap approach. Last, it should be noted that these two properties do not generate or provide income to the general fund. The properties were purchased with tax increment funds and any income derived from the properties is also considered TIF. What are the Options? There are a few options that the City can consider regarding the two rental properties. The following is not a complete list, but should constitute a range of possible options from which the Council may choose. 1. Enter into an agreement with a local or regional housing authority or agency and turn over all management responsibility and oversight to the authority. This is an appealing option and would potentially guarantee an annual income without any of the administrative headaches. The downside is that with such an agreement, you typically lose out on the flexibility of a month-to-month lease. Housing agencies or organizations would prefer a longer-term agreement. 2. Sell the homes to a house-mover and have them removed off-site. While this is a viable option, the market for older homes in need of repair is not strong at this time. (Was it ever strong?) Case in point, when Messiah Lutheran Church expanded their facility at the corner of H2 and Knollwood, they had two homes available that they attempted to sell and have moved off-site. While this did occur eventually, they almost had to give the homes away to make it worth someone’s effort to move them. Still, this could result in a few thousand dollars put back into the City’s TIF accounts. 3. Demo the houses, retain the cleared land as an incentive for redevelopment. This option, while more of an immediate response, would cost approximately $5,000 for each property and would seem wasteful considering the focus on affordable housing. 4. Continue renting the one property on County Road H2 for as long as the tenant stays caught up with rent and utilities or until the City is presented with a redevelopment opportunity for the area. Demolish or remove the home from Groveland Road and prepare the site for redevelopment. 5. Subdivide the County Road H2 property and sell the “as is” home and subdivided lot to a developer. Offer a 5 to 10% discount if the developer agrees to demo the house and replace it with a new, larger, more expensive home. Retain the back two-thirds of the lot for future redevelopment. Recommendation: Given the amount of staff time having been spent on the rental properties and the