CR 94-17 Auth H&D Purchase Vacant Lot
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January 25, 1994 o P K \ >;l. Council Rpt. #94-17
AUTHORIZE HOPKINS HOUSING AND REDEVELOPMENT AUTHORITY TO
PURCHASE VACANT LOT
Proposed Action
Staff recommends approval of the following motion: Approve Resolution 94-7 authorizing the
Hopkins Housing and Redevelopment Authority to purchase the vacant lot at 633 8th Avenue
South, Hopkins using funds from the #213 Housing Rehabilitation account..
With this motion the purchase agreement will be executed and forwarded to the Department of
Tax Payer Services and the Hennepin County Board for their approval.
Overview
Approximately a year ago the Hopkins City Council approved action requesting the Department
of Tax Payer Services to withhold the sale of the tax forfeited residential vacant lot at 633 8th
Avenue South for one year. This action was undertaken to allow City staff to research potential
uses for the site. Initially, City staff targeted the site for a fundraising project for the Teens Alone
. program. However, this group has been unable to put together a project over the past year and it
is unknown at this time whether or not staffwilI be able to coordinate a project with them.
Staffhas looked at other uses for the property and is recommending that the Hopkins HRA
purchase the lot in order to facilitate and control the development of this property.
In order for the HRA to purchase the property, the City Council must pass a resolution
authorizing the sale to the HRA
Primary Issues to Consider
o What are the specifics of the lot?
o What is the proposed use staff is recommending for this site?
o What are the benefits of the HRA purchasing the lot?
o What is the cost of the purchasing the property?
o What will happen if the HRA does not purchase the property?
SUDPortiDi! Information
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. BRA purchase
Rpt. 94-17
page 2
o What are the specifics of the lot?
The lot is located at 633 8th Avenue South (see site map). It is zoned R-l, is 50' x no' and has
a current estimated market value of $15,300.
o What is the proposed use staff is recommending for this site?
Staff is proposing that the BRA consider two options for the development of the site. The first
would involve working with the Teens Alone program and the Hopkins High School to construct
a home on the property through the Industrial Arts Department. With this option, the lot would
be sold to Teens Alone after construction for the amount the BRA had into the lot.
Another option involves the lIRA, subsequent to purchasing the lot, soliciting developers to
construct a single family home. Staff has talked to developers and there is interest in this lot.
The selection of the developer would be based on the developer's proposal and the minimum
criteria established by the HRA This criteria would include a minimum value of the home,
. minimum purchase price of the lot and design and material standards.
Based on the neighborhood, it is the recommendation of stafrthat the minimum value of the home
be the highest value believed to be supported by the neighborhood. If the HRA purchases the
lot, staff would return to this body at a future date for approval of program criteria and award of a
sale.
o What are the benefits of the HRA purchasing the lot?
By purchasing the vacant lot, the BRA would be in control of the development including the
design and value of the home to be constructed. Staffis confident that the HRA would not loose
money in purchasing the lot and the experience of coordinating the project would be valuable in
assessing the benefit of undertaking similar projects in the future.
o What is the cost of the purchasing the property?
To purchase the property for redevelopment purposes, the HRA must pay the following:
Appraised value $7,000.00
Special Assessments $ 978.20
3% Assurance Fee $239.35
State Deed Fee $ 25.00
. Filling Fee $30.00
State Deed Tax $26.40
Total $8,298.95
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Rpt. 94-17
page 3
In addition the HRA will incur legal fees in order to make the title marketable. These costs are
estimated to be between $1,500 and $5,000. Other miscellaneous costs include staff time of
developing and administering the project.
o What will happen if the BRA does not purchase the property?
If the HRA does not purchase the property it will be sold to the highest bidder through the State's
land disposition program. The future of the lot would then depend on the intentions of the
purchaser. It is possible that a house could get constructed ofa lesser quality than if the HRA
controlled the development, or the lot could remain vacant.
Alternatives
The City Council has the following alternatives as relates to this issue:
o Adopt Resolution 94-7 authorizing the purchase of the property by the HRA for
. redevelopment purposes as detailed by staff.
o Approve the purchase of the property by the HRA, but specify an alternative use.
o Elect not to purchase the property.
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CITY OF HOPKINS
Hennepin County, Minnesota
RESOLUTION NO. 94-7
AUTHORIZE HOPKINS HOUSING AND REDEVELOPMENT AUTHORITY TO
PURCHASE VACANT LOT
WHEREAS, the State Department of Tax Payer Services is holding a vacant parcel ofland
located at 633 8th Avenue South which can be purchased by the City or another designated body,
and
WHEREAS, it has been determined that the best use of the property is development through the
Hopkins Housing and Redevelopment Authority, and
e WHEREAS, the City of Hopkins must authorize the purchase of the lot by the Hopkins Housing
and Redevelopment Authority.
NOW THEREFORE BE IT RESOLVED, that the City Council of the City of Hopkins hereby,
authorizes the purchase of the lot at 633 8th Avenue South by the Hopkins Housing and
Redevelopment Authority using funds from the #213 Housing Rehabilitation account..
Adopted by the City Council of the City of Hopkins this 1st day of February, 1994.
By
Charles D. Redepenning, Mayor
ATTEST:
James GeneIlie, City Clerk
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