Request for Committee Action

2015-01481 - Vacant Housing Recycling Program (VHRP)

2017-00155 - Infill development of new construction homes

On March 30, 2012, the City Council authorized staff to begin marketing and selling properties acquired under the Land Bank strategy of the City’s Neighborhood Stabilization Program (NSP 1, 2 and 3) using the City’s normal disposition policies and procedures for development parcels.

PARCEL     ADDRESS             SALE PRICE
MH-271     1511 22nd Ave N    $6,400

PURCHASER
Riverfront Development Partners LLC
4816 Nicollet Ave S
Minneapolis, MN 55419

PROPOSED DEVELOPMENT:
Purchaser proposes to invest $300,000 to move an existing two-story single-family home with four bedrooms and two bathrooms onto a new foundation that will have a two-bedroom and one-bathroom unit in the basement, creating a new 3,196 sq. ft. duplex finished development with a new detached three-car garage. The Purchaser intends to sell the home to a pre-approved first-time homebuyer at or below 80% AMI as the owner-occupant. The rental unit will be leased to a household at or below 60% AMI.  The lot size is 42’ x 141’ = approximately 7,310 total square feet.

LAND DISPOSITION POLICY:
The sale of this property complies with the City’s Disposition Policy. The sales price of this property reflects the full re-use value of $6,400 resulting in net loss of $40,723 after eligible costs of $47,123 (acquisition, transactional and site assemblage costs). This sale will result in future generation of property taxes and elimination of ongoing property management costs.

Some of the properties being sold pursuant to the RFP were purchased under the Neighborhood Stabilization Program.  In accordance with HUD guidance, “Change in use” requirements apply to all properties acquired or improved in the NSP Program.  Under the “Change in use” rules, all land sale proceeds, equal to the fair market value will be returned to the NSP Program to cover ongoing program costs.

FINANCING:
Purchaser: Purchaser provided a pre-approval letter dated within 60 days of application.

COMMENTS:
On November 29, 2010, the City acquired this property from a private party and immediately demolished the dilapidated structure on the site.

The property has been publicly advertised on the City’s website and through e-mail notification to a listserv now of over 3,000 developers and homebuyers as part of the Minneapolis Homes Financing RFP released in December 2020. This is the only application received for the property by the February 17, 2021 RFP due date. This offer was evaluated based on program criteria stated in the Minneapolis Homes manual, including financial capacity, experience, responsibility, scope of work, subsidy request (if any), and occupancy intentions. To evaluate responsibility, we consulted with the Department of Regulatory Services staff to verify the status of vacant buildings, rental properties, or other properties owned by the applicant in the City of Minneapolis.

Staff recommends the sale of 1511 22nd Ave N to Riverfront Development Partners LLC, subject to conditions. Construction management staff has reviewed the construction estimate and confirmed that it is sufficient to meet the Minneapolis Homes new construction standards. This will be the Purchaser's first acquisition of land from the City of Minneapolis. The Purchaser intends to sell the duplex home to a pre-approved homebuyer at 80% AMI.

Notification was provided to the Jordan Area Community Council on March 26, 2021. The neighborhood board of directors notified CPED staff on April 16, 2021 of their support for the Riverfront Development Partners LLC proposal.