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South Bend Redevelopment Commission <br />Regular Meeting — August 23, 2011 <br />6. NEW BUSINESS (CONT.) <br />B. Airport Economic Development Area <br />(3) Administrative Settlement for acquisition <br />of 1527 S. Kemble. <br />Mr. Relos noted that the owner of 1527 S. <br />Kemble has made a counter offer to the <br />above purchase offer in the amount of <br />$65,000. This property is a large, <br />extensively remodeled two story rental. <br />Recent improvements include: <br />3 years ago new windows were <br />installed in two of the units, and new <br />floor coverings in all three units <br />5 years ago the house was insulated <br />and siding put on <br />The income stream from this property is <br />$1,025 per month. Using a 12% cap rate, the <br />annualized investment property value is <br />calculated to be almost $75,000. Staff feels <br />the acquisition cost of $65,000 is reasonable <br />for this property, and requests approval of the <br />administrative settlement in the amount of <br />$33,000. <br />Mr. Relos also noted that in the last several <br />months, we've made great progress in the <br />Ignition Park South expansion areas. We've <br />had difficulty moving forward on Kemble <br />and Kendall Streetsm but in the last several <br />months it has broken loose a little and this is <br />one of the houses on Kemble St. that would <br />help us reach our goal of buying all the <br />properties along Kemble. <br />Mr. Varner questioned the use of the 12% <br />cap rate. In this economy 12% seems <br />excessive. Mr. Relos responded that banks <br />12 <br />