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HomeMy WebLinkAbout11.19.2001• • COUNCIL WORK SESSION November 19, 2001 3:15 p.m. Council Chambers Members present: Anders, Jordan, Gronen, Getty, Krizek. Members absent: Murphy, Berry. Moved by Jordan, seconded by Gronen that the Agenda, as proposed, be approved. Ayes: Four. Absent: Murphy, Berry, Krizek. Motion carried. Dave Passmore of Appraisal Associates, and Mark Winninger of Winninger Realtors reviewed the appraisal process for property located at 910 Sycamore Street. Mr. Passmore reported he has been in all the properties and looked at the Iot at 910 Sycamore Street. Mr. Passmore reported that he uses the sales comparison approach which involves the process of comparing the subject to actual sales in the area. Mr. Passmore stated that when appraising property Iocated in the downtown area, there are not as many sales to compare as when appraising residential property. Mr. Passmore stated that the sale of other properties in the area he used was a favorable range, and he used the high range because he was concerned the acquisition of the property at 910 Sycamore Street could go to condemnation. If the lower end amount is used, it could look like the city was trying to rob the owner if it goes to condemnation. Mr. Winninger stated that Central Business District property was used, and maybe the appraiser could have used the fringe of the Central Business District. Councilperson Getty stated he noticed that Appraisal Associates Company used property located on 9th and Washington Streets, which is on a major highway. Mr. Passmore responded that property was the highest comparable and was not used for 910 Sycamore Street. Mr. Passmore reported that the value ranges were from $2.35 per square foot to $2.70 per square foot , and he used the $2.70 per square foot amount. Councilperson Jordan stated that most properties have incentives such as relocation costs and tax abatements, and people don't mind paying for those incentives. Mr. Passmore responded that none of those items were figured in the final price. Councilperson Krizek now present at 3:23 p.m. Mr. Winninger stated that it is difficult to know what the incentives will be at the time of the sale of the property. Councilperson Jordan stated that the council is responsible for the tax dollars, and $50,000.00 for the lot at 910 Sycamore Street does not go over well with the public. Councilperson Jordan stated the appraisers did their jobs and did it well. Mr. Winninger stated that he did the review appraisal of the appraisal submitted by Appraisal Associates Company. There is a distinct difference between appraisal and appraisal review as the appraisal review looks at the appraisal process to make sure all standards were followed, which he approved for this property. Mr. Winninger stated that no one can believe that property in a blighted area is worth $50,000.00, but the city is doing a taking, which means there is a buyer making the value of the property higher. Mr. Winninger stated if the council feels the appraisal is too high they could have another appraisal on the property, which could get expensive at $1,500.00 per appraisal. Jim Walsh, City Attorney, stated that the condemnation commission will look at all appraisals, and that once an appraisal is made it does not go away. Mr. Walsh stated that the Legislature has taken away any bargaining tools cities may have had in acquiring properties. Once an area is identified as a development area by a city, an appraisal must be done on the properties and the appraisal amount must be offered to the owner or the property will go to condemnation. Council Work Session November 19, 2001 Page 2 Mr. Winninger stated that the big picture is that the city is taking the property even though the owner may not want to sell the property. Councilperson Anders stated that adjacency is a problem with this property, and he asked if its proximity to Meyers Sheet Metal Works has any influence on the price. Mr. Passmore responded if the city had already purchased the Meyers Sheet Metal Works property, that would have impacted the appraisal amount for 910 Sycamore Street. Mr. Walsh inquired why the appraisers do not use the middle or bottom value ranges rather than the upper range. Mr. Winninger responded that the appraiser cannot give a range, only a price using standards. Mr. Winninger stated that once the property owner is informed that the city might take the property, an astigmatism is put on the property. Mr. Walsh asked if the seller does an environmental assessment. Mr. Winninger responded that the appraiser assumes the property is clean. Mr. Passover stated that a letter can be attached to the appraisal that it is assumed the site is clean. Don Temeyer, City Planner, stated that the normal process is that the abstract is brought up to date, and the city pays for those fees subject to getting environmental clearance. Councilperson Krizek asked if there are environmental concerns who cleans the property, and Mr. Temeyer responded that the city does not take the property or the offer is renegotiated. Councilperson Anders asked what is the reason for purchasing the property at this time. Mr. Temeyer responded that the city is trying to get a developer for the area and also to make sure there is no environmental cleanup, and that the property is ready for any developer. Councilperson Getty asked why the city couldn't offer the $50,000.00 subject to the owners stating that the property is environmentally clean. Mr. Temeyer responded that the city will know if there is any contamination through the EPA grant funds. Councilperson Getty asked what law says the city has to give a copy of the appraisal to the property owner. Mr. Walsh responded that the Legislature passed the law about three years ago requiring that property owners be given a copy of the appraisal. Councilperson Anders asked if development of this area is tied to funds from Vision Iowa. Mr. Temeyer responded the development is not directly tied to Vision Iowa funds, and if nothing is ever accomplished the grant becomes forgivable in five years. Councilperson Anders questioned if the value of the property would change in six months. Mr. Passmore responded that probably not as the price is usually good for about one year, but it could go up or down. Mr. Winninger stated that the city has stigmatized the property owners by letting them know the city could be purchasing their property. Councilperson Anders asked if the purchase price of this lot will affect the price the city will pay for the next property. Mr. Passmore responded that if the city purchases property around them, the owners will see what is going on and that could impact the value of their property. Councilperson Getty asked if the city could legally send someone else to purchase the property without informing the property owner the city wants to purchase the property, and Mr. Walsh responded the city could not do that. Mr. Temeyer stated that the city has to follow the process and inform everyone. Councilperson Gronen stated that the city is trying to make an investment in this area using federal funds to get developers to invest in the area and we will get the investment back in taxes when the property is developed. Councilperson Jordan stated that it Looks like the City Attorney is saying the council needs to move forward on this property. • Council Work Session November 19, 2001 Page 3 • • Moved by Jordan, seconded by Anders that the acquisition of the lot located at 910 Sycamore Street be placed on the December 3, 2001 council agenda and that the meeting be adjourned at 3:50 p.m. Ayes: Five. Absent: Murphy, Berry. Motion carried. Nancy Eckert City Clerk