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Home My WebLink About8B - 4577 Colorado & 4664 Dakota U 4646 Dakota Street SE Prior Lake, MN 55372 :�INNESOI CITY COUNCIL AGENDA REPORT MEETING DATE: November 10, 2014 AGENDA#: 813 PREPARED BY: Dan Rogness, Community & Economic Development Director PRESENTED BY: Dan Rogness, Community & Economic Development Director AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION AUTHORIZING THE DEMOLI- TION OF A HOUSE AT 4577 COLORADO STREET AND THE REPAIR OF A HOUSE AT 4664 DAKOTA STREET, INCLUDING A 2014 BUDGET AMEND- MENT OF UP TO $8,050 FROM GENERAL FUND RESERVES FOR DEMOLI- TION DISCUSSION: Introduction The purpose of this agenda item is to consider actions to demolish a city-owned house at 4577 Colorado Street, and to repair a city-owned house at 4664 Dakota Street. History In 2014, the City Council authorized the purchase of two properties in the down- town area, including: 1. 4577 Colorado Street — Potentially for the purposed of extending Arcadia between Colorado and Pleasant Streets, parking or economic develop- ment. ($114,900). 2. 4664 Dakota Street — For future commercial redevelopment of property between City Hall and Lakeside Plaza ($140,500). The City Council directed staff to further evaluate the repair costs for both proper- ties in order to determine whether one or both houses should be rented during the interim period. That interim period would be an undetermined time between acqui- sition and further adjacent acquisitions, possibly from 3-5 years for each property. Current Circumstances Staff has finished more detailed inspections of both properties as summarized be- low with further detail shown on Attachment 1: 1. 4577 Colorado Street— repair estimate = $39,750. If rented for $700 per month minus $200 for taxes, nearly seven years is necessary to recapture city costs (assuming no further repairs). 2. 4664 Dakota Street — repair estimate = $6,930. If rented for $800 per month minus $200 for taxes, one year is necessary to recapture city costs (assuming no further repairs). Therefore, staff is recommending that the Colorado house be demolished at an estimated cost of $8,000, and that the Dakota house be repaired for rental pur- poses. The cost associated with the demolition will come from the General Fund Reserve; the costs associated with the repair will come from TIF 1-1 fund balance. Rental revenue will go back into the TIF account. Conclusion The City Council should determine if it concurs with staff's recommendation to demolish the house at 4577 Colorado and to repair/rent the house at 4664 Dakota. ISSUES: Assuming the best case scenario of 100% rental, the Colorado house fails to cover its cost. In addition, it is likely that this house is not a good candidate for moving to a new location; however, that fact will be further verified as at least one party has expressed an interest. FINANCIAL The estimated demolition cost of$8,050 for the Colorado house minimizes overall IMPACT: city expenses, including rental risk and landowner responsibilities ($8,500 is pro- posed as the demolition budget). The same is true for the Dakota house based on low repair costs and the prospect of revenues exceeding expenses. Funding sources are available in both cases. ALTERNATIVES: 1. Motion and a second to approve a resolution authorizing the demolition of a house at 4577 Colorado Street and the repair of a house at 4664 Dakota Street, including a 2014 budget amendment for $8,500 from General Fund Reserves for demolition. 2. Motion and a second to direct staff to return with further information as identified by the Council. RECOMMENDED Alternative #1 MOTION: ATTACHMENTS: 1. Cost estimates for the repair of 4577 Colorado and 4664 Dakota Streets ZPRION ti U ts7 4646 Dakota Street SE `r'.AwEso'c'P Prior Lake,MN 55372 RESOLUTION 14-xxx A RESOLUTION AUTHORIZING THE DEMOLITION OF A HOUSE AT 4577 COLORADO STREET AND THE REPAIR OF A HOUSE AT 4664 DAKOTA STREET, INCLUDING A 2014 BUDGET AMENDMENT OF UP TO$8,500 FROM GENERAL FUND RESERVES FOR DEMOLITION Motion By: Second By: WHEREAS, The City of Prior Lake, a Minnesota municipal corporation, has acquired real estate for a public purpose at 4577 Colorado Street and 4664 Dakota Street; and WHEREAS, The City Council of Prior Lake directed staff to further evaluate costs associated with the repair of and revenues associated with the renting of both acquired properties; and WHEREAS, City staff has provided cost and revenue estimates, resulting in a staff recommendation to demolish the house at 4577 Colorado Street,and to repair and rent the house at 4664 Dakota Street; and WHEREAS, General Fund resources are necessary to pay demolition costs at 4577 Colorado Street, while Tax Increment Financing Redevelopment District 1-1 has funds to repair property at 4664 Dakota Street. NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA as follows: 1. The recitals set forth above are incorporated herein. 2. City staff is hereby authorized to proceed to demolish the house at 4577 Colorado Street, and further to repair and rent the house at 4664 Dakota Street. 3. The 2014 General Fund budget is amended to reflect up to $8,500 in demolition costs at 4577 Colorado Street using General Fund reserves. PASSED AND ADOPTED THIS 10th DAY OF NOVEMBER, 2014. VOTE Hedberg Keeney McGuire Morton Soukup Aye ❑ ❑ ❑ ❑ ❑ Nay ❑ ❑ ❑ ❑ ❑ Absent ❑ ❑ ❑ ❑ ❑ Abstain ❑ ❑ ❑ ❑ ❑ Frank Boyles, City Manager 4577 Colorado Street 2014 Repair Estimate EXTERIOR.GRADE- DIRT WORK Slope grade away from house and garage West side/portion of front and rear raise above adjacent grade $2,000 Depression in front yard/east neighboring yard needs to be filled $750 Class 5 drive needs additional fila $500 FOUNDATION Appears as slab on grade-Not verified Concrete blcok foundation appears to be In fair structural shape-some cracking ELECTRICAL WIRING Exposed wiring In bathroom/utililty room Electrical panel wiring in disaray Extension cords throughout house,duplex outlets do not operate, Assume all of the electricl wiring should be replaced $12,000 .MECHANICAL Furnace has limited access-no apparent furnace filter or access to filter Exposed wiring with no wire nuts Flu vent-combustable material near flu is code violation No return air plenum in house(New Furnance) $7,000 WATER DAMAGE Roof leakage:storage room ceiling has water damage by ductwork $500 GYPSUM WALLBOARD Poor condition,peeling paint indicating moisture issue,all replaced $5,000 FRONT.STOOP, No frost footing,no windows $5,000 PLUMBING Poorly installed Mold in shower enclosure $2,000 INTERIOR Controls for dryer inaccessible I Window airconditioner unsupported MISCELLANEOUS CORRECTIVE ITEMS Roof replacement $5,000 Siding poor workmanship Exterior/interior doors in poor quality Replacement windows low quality but fairly new Shed is inexpensive 2 very large trees in front yard Turf in very poor shape i Option #1 TOTAL IMPROVEMENT COST $39,750 i Option # 2 DEMOLITION $8,050 i 4664 Dakota Street 2014 Repair Estimate OUTSIDE PROJECTS Clean out gutters and downspouts $300 Repair front steps and walkway $300 Replace back wooden steps off deck/replace some rotting deck boards $250 Build 12' length railing on deck and railing on stairs to pass codes $250 Install dryer vent exhaust cap outside $30 Extend sump pump hose outside $50 Install storm door Infront and back $500 Service and repair furnace and air conditioner $1,00p BASEMENT PROJECTS Install handrail to basement stairs $100 Demo unfinished bathroom downstairs-cap off plumbing $200 Finish installing trim in basement $300 Install carpet in unfinished area $400 ELECTRICAL PROJECTS Install 1 porch light Install 1 dining room lignt Check all switches and outlets $1,000 MAIN FLOOR PROJECTS Patch sheet rock in porch $50 Finish grouting kitchen tile $50 Replace dishwasher $300 Patch sheet rock in main level bathroom $50 Install 10'wall and doorway in small room leading upstairs $500 Finish trim in small room $150 Install shelving in master bedroom $150 ATTIC/STORAGE ROOM Install handrail to upstairs attic $100 Install door to unfinished attic $200 Insulate and poly unfinshed attic $300 i Paint walls where needed thoughout house $300 TOTAL MATERIALS $6,930 i