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~ ~ ~7~ <br />SpU Ty 8F <br />~ ~ $F ,.Ali I~';i~. ~O~ <br />v \~\%<O <br />Community & Economic Development "~~~az' <br />r Z` ~,~ <br />:~?. <br />- .1865.. <br />1200 County-City Building, 227 West Jefferson, South Bend, Indiana 46601-1830 Phone 574/235-9371 Fax 574/235-9021 <br />To: Redevelopment Commission <br />From: David Relos, Economic Development Planner~~~` <br />Subject: Administrative Settlement for acquisition of 1507 S. Taylor St. <br />Date: August 06, 2010 <br />This is the staff report for the administrative settlement that is needed for the acquisition of <br />1507 S. Taylor Street. According to the Uniform Relocation Act (Act), which has been <br />adopted as the Commission's relocation policy, an administrative settlement is authorized in <br />cases where an additional payment is necessary to acquire a property. <br />Before the Commission today was Resolution No. 2740, setting the offer price for this <br />property at $27,000, which is the average appraised value. Because the warehouse <br />attached to the 2 story, 2 unit rental house is owner occupied, neither commercial appraiser <br />valued the property from an income approach. <br />Twelve years ago, the property owner purchased the property for $59,000. Over the years, <br />he has upgraded the roof and electrical services. Between the two units in the house, the <br />property owner receives $900 per month in rent. Based on this income stream, deducting a <br />10% vacancy rate, $604 per year in real estate taxes, $800 per year for insurance, and <br />$1,000 per year in maintenance, the net income per year is $7,316. At a cap rate of 11 %, <br />the value of the rental house itself would be $66,500. Staff did verify with a local credit <br />union that they use a cap rate of 9 - 11 %. <br />The property owner, who owns over 200 properties in this area, has agreed to accept <br />$95,000 for this property. This purchase price would relieve the Commission of any <br />relocation assistance for both the owner's warehouse and tenants, as the owner is waiting <br />for the Commission's decision before he signs any long term leases for the tenants <br />currently residing in the two apartments. <br />Staff feels the acquisition cost of $95,000 is reasonable for this property, and requests your <br />approval of the administrative settlement to allow for the acquisition of this property. <br />What We Do Today Makes A Difference! <br />