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<br />HRP Report <br />May 2, 2007 <br />Page 3 <br /> <br />Neighborhood Analysis: The program guidelines already state the following--Properties <br />should be equally distributed by location and value throughout the City when possible, <br />and provide a viable financial mix of properties to support Program financial requirements. <br /> <br />Maximum Award: The guidelines presently do not “cap” the amount of the demolition <br />assistance. The last grant approved by the EDA through the Housing Replacement <br />Program (approved on March 12, 2007) limited the assistance to no more than $8,000 <br />which almost covered the full cost of the demolition. A previous demolition grant on <br />Fairchild Avenue exceeded $10,000. Establishing a cap, or a “not to exceed” amount, <br />may make sense if adjusted from time to time to account for inflation. <br /> <br />Deferred Loan: The EDA felt that tying the demolition assistance to the property in the <br />form of a forgivable loan made sense as a means to protect against someone using the <br />assistance and then selling the new home for a substantial profit. Ramsey County and <br />the Housing Resource Center both offer some types of assistance which appears as a <br />lien or second mortgage on the home, with the amount of the loan forgiven in total after <br />so many years in the house. If the property owner sells the home after one year, perhaps <br />20% of the loan is forgiven, after two years, perhaps 40% is forgiven, and so on. <br /> <br />Certainly other criteria could be added beyond these mentioned above. Ultimately, the <br />desired outcome in any event is to encourage neighborhood revitalization and <br />reinvestment; eliminate blighted housing and enhance the tax base. <br /> <br />Recommendation: <br /> <br />Review the attached program guidelines. The EDA would like the Planning Commission <br />to discuss potential criteria to assist with the demolition assistance component of the <br />Housing Replacement Program. Based on the Commission’s suggestions, staff will <br />prepare the requested modifications and a resolution recommending approval of the <br />program guidelines. <br /> <br /> _____________________ <br />Jim Ericson <br />Community Development Director