HRA Meeting Date: November 7, 2024
To: Members of the Housing and Redevelopment Authority
From: Melissa Hanson, Housing Coordinator
Title
City of Northfield Housing and Redevelopment Authority to Consider Additional Property Purchase at 706 and 716 2nd Street West, Northfield.
Body
Action Requested:
The Housing and Redevelopment Authority (HRA) to approve resolution to purchase and purchase agreement for property at 706 and 716 2nd Street West, Northfield from Northfield Hospital+Clinics.
Summary Report:
The HRA’s mission is to be a partner in providing a sufficient supply of affordable, adequate, safe and sanitary dwellings in Northfield. Our goal is to create a community with housing opportunities available along the entire housing spectrum: from renters to homeownership, first-time homeowners to senior living, workforce housing, and empty nesters.
Northfield Hospitals+Clinics own property at 706/716 2nd Street West, adjacent to Way Park. The properties include a vacant parcel and a parcel with a single-family home that is currently unoccupied and being used by the Hospital for storage. Under City laws for the Hospital, the City Council retains authority over the sale of property. As the Hospital Board considered the future of the property, Hospital staff and City Administrator Martig requested a review of possible interest from the HRA and the Parks and Recreation Advisory Board to consider potential outcomes for the property as advisory to the City Council prior to any action.
The Parks and Recreation Advisory Board met on June 3, 2024, and discussed their interest in the property. They concluded that the purchase of the property did not align with their existing operating plan and passed on the opportunity to purchase the property.
Given the identified need for additional homes in Northfield and the potential this opportunity could offer to add homes to Northfield’s supply, the HRA reviewed the opportunity to purchase the properties from the Hospital at the June 6, 2024 meeting. Attachment #1 is the staff report and information that was provided.
On September 26, 2024, the Northfield Hospital+Clinics Board of Directors approved the sale of 706 and 716 Street West to the Northfield HRA for $325,000. Attachment #2 are the minutes from the Board of Directors meeting.
Historically, the HRA has acquired and sold property based on Estimated Market Value as provided by Rice County Public Tax Records. Based on 2024 tax records, the Estimated Market Value for 706-2nd Street is $290,600 and the Estimated Market Value for 716-2nd Street is $38,400 for a total of $329,000. The Hospital has proposed selling the properties for a combined $325,000. The funds for the HRA purchase of the properties would come from unrestricted reserves.
Alternative Options:
The City and HRA could choose not to acquire the lots from the Hospital. The Hospital has shared that they would then list the property for sale on the open market. The City Council would need to authorize the sale per the retained powers of the City as a municipal hospital.
Financial Impacts:
As of September 17, 2024, the HRA reserve balance is estimated at $816,156 with unrestricted reserves as $566,379. The HRA purchase of the two properties would bring the unrestricted reserve balance to $241,379.
Tentative Timeline:
November 12, 2024 Council to consider calling a Public Hearing for the sale of Real Property
November 21, 2024 Planning Commission review proposed sale for conformance with Comprehensive Plan
November 26, 2024 Council to hold Public Hearing for sale of Real Property and approve the sale and removal of restrictive covenants.
December 2024 Close by year end.