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RESOLUTION AUTHORIZING THE PURCHASE OF REAL PROPERTY FROM JAMES D. MCCAULEY IN THE LINCOLN PARK NEIGHBORHOOD FOR $5,000.
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CITY PROPOSAL:
RESOLVED, that the proper city officials are hereby authorized to enter into a purchase agreement, substantially the same as that on file with the office of the City Clerk, with James D. McCauley authorizing the purchase of that certain real property in St. Louis County, Minnesota legally described below (the “Property”) for $5,000 (the “Purchase Price”):
Parcel 1
Southerly 29 feet of Lot 15, MYERS REARRANGEMENT OF BLOCK 70, DULUTH PROPER SECOND DIVISION
Northerly 27 feet of Lot 10, MYERS REARRANGEMENT OF BLOCK 70, DULUTH PROPER SECOND DIVISION
Parcel 2
Northerly 25 feet of Lot 14, MYERS REARRANGEMENT OF BLOCK 70, DULUTH PROPER SECOND DIVISION
FURTHER RESOLVED, that the proper city officials are hereby authorized to: (i) execute all documents necessary to effectuate the acquisition of the Property from James D. McCauley, and (ii) pay the costs allocated to the city in the purchase agreement, payable from Fund No. 210-030-3132-5441 (special projects, finance, vacant building registration, other services and charges).
FURTHER RESOLVED, that in the event it is determined that James D. McCauley does not own fee title to Parcel 2 of the Property (described above), the City’s City Administrator is authorized to enter into an amendment to the purchase agreement to remove Parcel 2 from the transaction authorized by this resolution, with no change in the Purchase Price.
Statement of Purpose
STATEMENT OF PURPOSE: The purpose of this resolution is to authorize the acquisition of that certain real property described above (the “Property”) from James D. McCauley (“McCauley”) for $5,000 (the “Purchase Price.’) The Property is located in the Lincoln Park neighborhood on Park Avenue above W. First Street and east of Piedmont Avenue. A map depicting an aerial view of the Property is attached as Exhibit 2.
The structure located on the Property was condemned for human habitation on January 23, 2014 due to a lack of utilities and structure deterioration. No restoration has been completed since the initial condemned for human habitation order in 2014, and the building has been rendered unrecoverable over the last decade. Additionally, there was a fire to the house in 2022. The current structure is in an uninhabitable condition that is unsafe, dilapidated, unsightly and has been vacant ever since the condemnation for human habitation order. The City has identified CDBG funding to pay for the demolition of the structure once the property has been conveyed to the City.
The purchase agreement setting forth the terms and conditions of acquisition of the Property is attached as Exhibit 1. Under the terms of the agreement, the city is responsible to pay for the costs to acquire the Property (e.g., title commitment, deed tax, recording fees), as well as 2024 real estate taxes (the Property will become tax-exempt as of January 1, 2025). McCauley is responsible to pay for real estate taxes and special assessments and any penalties and interest thereon due and payable with respect to the Property in all years prior to 2024 (with the exception of City assessments, which are discussed in the following sentence). The City has previously assessed the Property due to non-payment of vacant building registration fees and administrative fines, but intends to write off those costs after acquiring the Property.
The City will order a title commitment for the Property once we have fully executed Purchase Agreement. However, staff have already reviewed the St. Louis County real estate records and could not find a deed for Parcel 2 (described above) running in favor of McCauley. This could be because: (i) McCauley doesn’t own the Property, (ii) the deed to McCauley isn’t recorded, or (iii) the deed to McCauley isn’t indexed correctly. In the event it is determined that McCauley does not own fee title to Parcel 2, the City Administrator will be authorized to enter into an amendment to the purchase agreement to remove Parcel 2 from the transaction authorized by this resolution, with no change in the Purchase Price. If it is determined that McCauley does own Parcel 2, the city will proceed to acquire it as intended in the purchase agreement.