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HomeMy WebLinkAbout6B(1) Administrative Settlement~j) 1 I / ~7O ~~~ ~ o N,,'~s Community & Economic Development ` -~.,r IBfS 1200 County-City Building, 227 West Jefferson, South Bend, Indiana 46601-1830 Phone 574/235-9371 Fax 574/235-9021 To: Redevelopment Commission From: Bill Schalliol, Economic Development Planner Subject: Acquisition of 306 W. Monroe Street Date: January 18, 2011 On December 17th, the Redevelopment Commission approved Resolution 2804 which set the acquisition offering price for the Michiana Lock & Key property ("ML&K") at 306 W Monroe Street at $65,000.00. As a follow-up to that presentation, Staff has been working with the property owner to develop a comprehensive administrative settlement value for the acquisition and relocation of ML&K from its present location to a new location in the East Bank Village located at 621 East Jefferson Boulevard (immediately to the west of Rubin's Cleaners). The total proposed administrative settlement value related to this acquisition and relocation that Staff presents to the Redevelopment Commission is in the amount of $340,000.00. For analysis purposed, the amount is broken into two parts - (1) Property Acquisition and (2) Resettlement Costs. (1) Property Acquisition The current ML&K property at 306 W. Monroe Street is 11,528 SF and consists of a single 2-story (1,800 SF) structure. The majority of the site is fenced in and is used as customer and employee parking area. The property sits on the corner of Monroe and Lafayette at a traffic signal. Because of the nature of the structure (house converted to a commercial business center) and the lack of adjacent commercial activity in the area, the property appraised at $65,000. Based on the SF of the site and the appraised value, the cost per SF is $5.64/SF. For land area comparison, the Harmon Glass parcel is 17,000 SF ($150,000 or $8.82/SF), the Richey's Radiator parcel is 11,440 SF ($190,000 or $16.64/SF), and the Fred's Transmission parcel is 24,395 SF ($262,500 or $10.76/SF). The average per SF price for the corners of Western and William was $12.07/SF in comparison to the $5.64/SF for Lafayette and Monroe. If the higher per SF cost is applied to the ML&K property, the price per SF would be approximately $139,181. The property that ML&K is interested in locating to in the East Bank at 621 E Jefferson Blvd consists of two parcels with a total property area of 6700 SF and two buildings with the principal building having a SF footprint of roughly 2,262 SF. The parcel with the main building consists of only the building (about 2680 SF of land) and all parking spaces and the second building are located on the second parcel (about 4020 SF of land). The small building is owned and used by the property owner as a business office and he will relocate once the sale is completed. The sale price for the entire site is $200,000 and is in balance with the price paid for the site. The main building was Whaf We Do Today Makes A Difference! originally marketed for lease, but the opportunity for both ML&K and the property owner to make this sale happen has allowed this property to be assembled in total. The purchase price for the total site at 621 E Jefferson is a private party-to-private party transaction and is generally outside of price control by the Redevelopment Commission. A search of sale records for the site, and in conversations with the property sales agent, indicate that the total purchase of the site, which occurred during the last 10 years, makes the site offering price comparable to the price paid by the current owner to assemble the site. From a comparison standpoint, the move from Monroe to Jefferson will be about an equal move in building and land SF. The key for this site, as it relates to a relocation site for ML&K is that the building is not much large in usable square footage than their current site but much better suited for business operations as it is all on one floor. Also, the need to acquire the second parcel is a must to have parking for the site as on-street parking is limited and with the total site purchase, ML&K will actually have less property than at its current site. In conclusion, the proposed relocation target site at 621 E Jefferson will be a comparable size and SF to the current ML&K property, and based on the acquisition requirements of the Jefferson parcel, and the low value of the current ML&K property appraised price in comparison to other parcels purchased in the adjacent area, the property acquisition component of the administrative settlement is realistic in value. The proposed acquisition price for the parcel at 306 W Monroe is $65,000 with a counter-offer/acquisition settlement value of $135,000 for a total site purchase amount of $200,000. (2) Resettlement Costs In working with the property of ML&K and his contractors and project team, a comprehensive list of relocation and resettlement costs has been prepared. The costs requested are all eligible expenses under the Federal HUD guidelines for relocation assistance. The items total $140,000 and include the following: - costs for interior build-out, facade and roof repair, and building code compliance - professional services costs like environmental studies, surveys and related expenses - demolition of the existing smaller building and parking lot repair to bring to code - business relocation related expenses - moving costs - utility reconnection services The costs projected for each of these categories is WELL researched by the owner of ML&K and his team and will cover the expenses incurred. Again, each of these items is an eligible expense under the relocation guidelines. The total amount of resettlement costs associated with this project is $140,000. Concluding Remarks on this Project The future demolition of the Michiana Lock & Key structure and clean-up of the site will provide many benefits to the Coveleski Park project. It is anticipated that the site will be into the parking and site access plan for the Cove site. By creating parking and access through this site, we have the opportunity to provide additional parking near the new center field entrance to park as well as provide some off-game parking to adjacent property users. From the East Bank perspective, this acquisition serves several benefits to that project area. First, it will clean-up a vacant building, bring in a VERY strong tenant into the village core along Jefferson and ultimately remove the small, non-consistent commercial building off of this site. As the city and the village members work to bring new tenants to the Jefferson corridor, ML&K will fill a space adjacent to Rubin Cleaners and we can use the two of those businesses to re-tenant the Howard Park Hardware Store and Soda Fountain Space and then build to the west to our recently purchased development site at the NE corner of Niles and Jefferson. Lastly, this acquisition will help provide some business stability for ML&K. The City has been flirting with the purchase of this property for 26 years and it has hampered the business growth because of the uncertainty of the city in buying the property and displacing this business. The move to the East Bank will allow ML&K to continue to serve the downtown business community as well as expand into the growing East Bank Village market. The relocation to E Jefferson will continue to provide the business with positive business exposure and will serve all parties, the business, the East Bank and the City well into the future. Staff requests Commission approval of this administrative settlement in a total amount of $340,000 to acquire the 306 W Monroe property and to relocate and resettle Michiana Lock & Key to the new property at 621 E Jefferson. ~...`,, a . ~ ..- ~~ `~ ~` .o cc ~ V N ~ 'ts ~ :c as~a ~~ ^` T /0 •I ~ C 1/ ~ Rf ~ C ~ lL ~ W Q ~ ~ ~ ~ ~ ~ ~ J Q ~ ~ X LL. G1 > d M d ~n'`~ a*`' "° k ~ . ~ ~; _. r (1} C .~ tLt ~ tr? UcU~ ~ c~u ~. :; u. t4 ~ C? c ~, .~ ~ ~ ~ ~ 4 ~ ~=u' d O Qy C .~ m ~ a ,~ ~ ~~ ~~a~ ~ ~ .~ ~ (P YC ~Q ~ } Q !f a , ~, ~~~ -' ~~ ~z z- ~ w° ~, ~ A ~_ ~~ ~ .. d J ~~ ~ ~: C ~1• A L ,eta ~ ~ X .' 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