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ci \ i 1 SpU7H @ y \ �c Community & Economic Development �. 1200 County -City Building, 227 West Jefferson, South Bend, Indiana 46601 -1830 Phone 574/235 -9371 Fax 574/235 -9021 To: Redevelopment Commission From: David Relos, Economic Development Planner Subject: Administrative Settlement for acquisition of 527 - 529 W. Indiana Ave. Date: September 17, 2010 This is the staff report for the administrative settlement that is needed for the acquisition of 527 - 529 W. Indiana Avenue. According to the Uniform Relocation Act (Act), which has been adopted as the Commission's relocation policy, an administrative settlement is authorized in cases where an additional payment is necessary to acquire a property. Before the Commission today was Resolution No. 2762, setting the offer price for this property at $30,500, which is the average appraised value. Because the second unit of this property was not currently rented, an income value approach was not fully utilized. When valuing this duplex based on the annual net income it could generate, the capitalization rate method commonly used by local financial institutions on income producing properties arrives at a value for this property at $50,000 - $52,000. Recent updates to this property include a new roof 3 years ago, new furnace 2 years ago, and separate 100 amp electrical service for both units. The property owner has counter offered at $50,000. In light of the recent improvements to this duplex, its overall good condition, and the above capitalization rate valuation, Staff feels the property owner's counter offer of $50,000 is reasonable, and requests Commission approval of this Administrative Settlement to allow for the acquisition of this property. What We Do Today Makes A Difference!