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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 Streets 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 />