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� C- (1) me mor arid u m r 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: Res. No. 2886 — Acquisition Offer for 601 — 605 W. Washington Res. No. 2887 — Counter Offer for 601 — 605 W. Washington Date: June 14, 2011 This is the staff report for the acquisition of 601 — 605 W. Washington. This property was added to the West Washington Chapin Development Area Acquisition List by Resolution No. 2852 on March 22, 2011. It was added in an effort to clear the non - conforming buildings on this corner in preparation of more appropriate infill housing or a historic house move. This property is a one story, three unit, brick building built in 1960. The building contains 1,680 square feet on a 68'x 93' lot, across the street from Tippecanoe Place Restaurant. Resolution No. 2886 sets the acquisition value of the property at $72,000. The acquisition value is the average value as determined by two independent appraisals. Resolution No. 2887 is the property owner's counter offer of $87,000. When valuing this property, the appraisals did not consider the income approach since only one of the three units is currently leased. The property owner states that in anticipation of this sale, he has not actively pursued leasing the units. Using the income capitalization method of valuing this property based on its historic rental income, with a capitalization rate of 11 %, the value would be $126,000. This building had a new roof put on 3 years ago, with the center unit recently remodeled. Staff feels the acquisition cost of $87,000 for this property is reasonable, and requests your approval of Offer Resolution No. 2886 and Counter Offer Resolution No. 2887, to allow for the acquisition of this property. What We Do Today Makes A Difference!