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�o IS ( 3) �oT� BF Community & Economic Development 1865 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 Planner0W Subject: Administrative Settlement for acquisition of 701 W. Indiana Ave. Date: January 03, 2012 This is the staff report for the administrative settlement that is needed for the acquisition of 701 W. Indiana Avenue, also known as Donna Lee's Tavern. This property sits at the northwest corner of Scott and Indiana, with Scott Street becoming the new entrance from the south into Ignition Park (see attached map). According to the Uniform Relocation Act, an administrative settlement is authorized when negotiations exceed the market value of the property and are necessary for its acquisition. On November 22, 2011 the Commission approved Resolution No. 2966, setting the offer price for this property at $33,500, which is the average appraised value. To relocate the tavern currently operating on this property, another building that could accommodate it would need to be identified, and that building brought up to current building and fire codes. According to zoning ordinances, a tavern is a controlled use, and as such, relocation options are limited. Funding would be required to acquire and rehabilitate a new building for this tavern's relocation. In addition, a firm would need to be hired to assist the property owner through the various departments who would need to approve this controlled use relocation, and to provide design services for the work needed on a new building. Costs would be incurred to move and install coolers, sinks, bar, and furniture and fixtures (see attached Nonresidential Moves, Summary of Covered Items). After much thought, this property owner has decided to close her tavern and not relocate. This will further help to clean and clear this area on the southern boundary of Ignition Park, and enhance this entrance into the Park. A general valuation method for a small neighborhood tavern is 2 to 2.5 times gross receipts. Two times the average of the last three year's gross receipts for this business is $163,000. The $33,500 property value plus $163,000 business value arrives at a value of $196,500. This property owner asks for a lump sum payment of $190,000. What We Do Today Makes A Difference!