A scattered sites acquisition program will continue for another year.
The Coon Rapids Housing and Redevelopment Authority (HRA), which comprises the seven members of the Coon Rapids City Council, has authorized staff to purchase up to three properties over the next year.
The program involves purchasing and demolishing blighted or substandard homes, in most cases foreclosed, and replacing them with higher quality houses.
According to Community Development Specialist Matt Brown, the HRA has authorized staff to acquire a certain number of properties for the scattered sites acquisition program for the past several years.
Staff has been able to acquire bank-owned properties in a timely manner through the First Look program, Brown wrote in a memo to the HRA.
The First Look program allows locals governments and qualified developers to purchase properties owned by participating institutions at a discounted price before they are marketed, he wrote.
“This process benefits financial institutions by reducing the carrying and marketing costs and avoiding further declines in property value, vandalism and other risks,” Brown wrote.
According to Brown, the blanket resolution is needed because the HRA must act quickly when properties become available through First Look because there is not sufficient time to have the HRA consider individual purchase agreements at scheduled meetings.
Under the resolution approved by the HRA, staff will negotiate the purchase of properties meeting certain criteria.
• The purchase price is not more than $70,000.
• The properties are blighted and in substandard condition and the cost of fixing deficiencies exceeds the value of the property.
• Prior to the acquisition of each property, staff will conduct due diligence to protect the HRA’s interests.
In the past year, one property has been purchased through the scattered sites acquisition program, Brown told the HRA.
That was the recent acquisition of 9065 East River Road for $30,000 and demolition will take place soon.
In 2011, the HRA sold a vacant lot at 11301 Osage St. N.W., which it acquired in 2007, Brown said.
The HRA currently owns three vacant lots acquired through the scattered sites program.
“I would encourage staff to move properties acquired through the program as fast as possible,” said Councilmember Scott Schulte.
In response to a question from Councilmember Denise Klint about where the money comes from to pay for the property purchases, Brown said a scattered sites account was set up with funds received from the Coon Rapids Mortgage Assistance Foundation.
The account currently has a balance between $200,000 and $300,000 and dollars received from the sale of the lots go back into the scattered sites fund, he said.
Tax dollars in the HRA budget are not used to pay for the property purchases, according to Brown.
The Coon Rapids Mortgage Assistance Foundation was established in 1979 to allow the city to issue low interest housing bonds to boost new housing construction at a time of high interest rates.
The $45 million housing revenue bond issue, of which $12.2 million was refunded in 1994 to take advantage of lower interest rates, was paid off in March 2003.
Mortgage payments from homeowners who benefited from the bond issue paid off the bonds.
And the money that has built up in the foundation coffers over the years has been allocated to housing and rehabilitation projects in Coon Rapids, including the scattered site acquisition program.