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HomeMy WebLinkAbout3B - Sale of City Properties (Colorado Street) 'II , "CELEBRATE PRIOR LAKE'S CENTENNIAL - 1991" CONSENT AGENDA: PREPARED BY: SUBJECT: DATE: 3 (b) LARRY J. ANDERSON, DIRECTOR OF PUBLIC WORKS CONSIDER APPROVAL OF SALE OF CITY PROPERTY (4472 & 4500 COLORADO STREET) MARCH 4, 1991 INTRODUCTION: The purpose of this Agenda item is to authorize the sale of properties located at 4472 and 4500 Colorado Street. BACKGROUND: On December 17, 1990, the City Council authorized Staff to dispose of the above referenced property. Staff solicited proposals from the local realtors for the listing of the properties. Proposals were received from Coldwell Banker and Edina Realty, and the properties were co-listed with them. Prior to this, Staff advertised the property "For Sale" in the newspaper, and the high bid for the house was $42,600 which was rejected by the City Council on December l7, 1991. The City has received Purchase Agreements for both properties. The purchase price for the house is $64,000.00 with the City pa~ing $1,000.00 for points with an "As Is Condltion" stipulated. The purchase price for the lot is $14,500.00 with the purchaser paying for the removal of the floor and footings from the previous structure which was on the lot. The purchaser will construct a split level house with attached garage on the lot. No variances will be requested for the construction of the home. DISCUSSION: The purchase price of the home was $70,300.00 excluding increased mortgage interest costs, movin9 expenses, and incidental expenses. At the tlme of the purchase, the City had an appraisal to determine the cost if an easement was obtained, rather than purchasing the home. The appraisal value of the easement was $10,000.00. The $63,000.00 (net after paying points) purchase price of the home appears to be fair. The buyers, Bradley Johnson and Melissa Jacobs from Shakopee, are purchasing the home in an "As Is Condition". The City 4629 Dakota 51. 5.E., Prior Lake, Minnesota 55372 / Ph. (612) 447-4230 / Fax (612) 447-4245 An Equal Opportunity/Affirmative Action Employer ALTERNATIVES: RECOMMENDATION: BUDGET IMPACT: will net $57,724.00 after paying realtor fees and closing costs. Since acquisition of the home, the house has been rented. The city has received $10,760.00 in rent. The 150' x 61' lot being sold to John Mahoney is a remnant parcel from the two duplexes which were removed for the roadway construction. The purchaser will be responsible for removing the concrete floor and footings which remain in place from the duplex. The City will receive $12,985.00 after paying real estate brokerage and closing fees. The properties originally were acquired with MSA Funds. As a result of the sale of the properties, the next MSA payment for a project will be reduced by the amount of revenue received from the sale. The original intent was to place the revenue from this sale in the Construction Fund for future use. In light of the State's proposed cutbacks, these funds should be placed in the General Fund and when the actual amount of cutback is known, a decision can be made as to whether all or part of these revenues will be transferred to the Construction Fund. This decision will provide maximum revenue flexibility for the Council in evaluating the anticipated cutbacks. The alternatives are as follows: 1. Accept the offer of $14,500.00 for the lot at 4472 Colorado Street and $63,000.00 (net after paying points) for the lot and home at 4500 Colorado Street. 2. Do not accept the offers for properties and continue with the with the realtors. the two listing 3. Remove these properties from the "For Sale". listing Staff recommends that the offers from John Mahoney, and Bradley Johnson/Melissa Jacobs be accepted and the properties at 4472 and 4500 Colorado Street be sold. The funds may be used as an interim additional source of revenue if State cutbacks I ACTION REQUIRED: are significant. The next MSA project would not be advanced the amount of dollars received from the sale of the property. A MSA Project is not anticipated prior to a decision on the Legislature's 1991/92 property tax and local government aid legislation. Make a motion, as part of the Consent Agenda, to accept the offer to purchase the properties at 4472 & 4500 Colorado street.