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HomeMy WebLinkAboutMN-CC-2011-06-22COMMON COUNCIL PROCEEDINGS CITY OF ITHACA, NEW YORK Special Meeting 7:00 p.m. June 22, 2011 PRESENT: Mayor Peterson Alderpersons (8) Dotson, Rosario, Clairborne, McCollister, Zumoff, Myrick, Cogan, Mohlenhoff OTHERS PRESENT: City Clerk – Conley Holcomb City Attorney – Hoffman Community Development Director – Bohn Building Commissioner – Radke City Chamberlain – Parsons Ithaca Neighborhood Housing Executive Director – Mazzarella EXCUSED: Alderpersons (2) Coles, Rooker PLEDGE OF ALLEGIANCE: Mayor Peterson led all present in the Pledge of Allegiance to the American Flag. SPECIAL ORDER OF BUSINESS: 2.1 Authorization of Conveyance to Ithaca Neighborhood Housing Services (INHS) of Real Property Acquired Through Foreclosure (314-314½ S. Plain Street) - Resolution By Alderperson Cogan: Seconded by Alderperson Rosario WHEREAS, the City of Ithaca, through its recent 2009 Tax Foreclosure Proceeding (Index No. 2011-0048), acquired certain parcels of real property in the City, pursuant to a judgment issued by the Supreme Court of New York (Tompkins County), on June 17, 2011, and WHEREAS, an auction to sell properties so acquired is scheduled for June 23, 2011, in conjunction with the County of Tompkins, and WHEREAS, among said properties are two parcels – Tax Map Parcel No. 80-2-12 and Tax Map Parcel No. 80-2-13 – which are occupied by a two-family dwelling also known as 314-314½ S. Plain Street, and WHEREAS, the dwelling at these addresses has been vacant for over 10 years and is currently in extremely deteriorated condition, and is the subject of a repair-or-demolish order from the City’s Building Department, and WHEREAS, in its current condition, the dwelling at 314-314½ S. Plain Street is an unsafe building that constitutes a hazard to public safety and/or health and a detriment to and blight upon the surrounding properties and neighborhood, and WHEREAS, Ithaca Neighborhood Housing Services, Inc. (INHS), has identified said parcels on South Plain Street as being suitable for redevelopment pursuant to an INHS homeownership and affordability program, and WHEREAS, the liens (for unpaid taxes) associated with the above listed parcels are in the total amount of approximately $19,000.00, and WHEREAS, the Executive Director of INHS, with the informal support of a majority of the members of the INHS Board of Directors, very recently proposed that INHS purchase the parcels in question from the City (so as to cover all outstanding liens, the costs associated with such purchase and the auctioneer’s fee associated with having included the parcels in the scheduled auction), demolish and replace or renovate the existing structure (at INHS’s sole cost), and rent or sell the property through a program designed to retain permanent affordability of the housing units to low or moderate- income persons, and June 22, 2011 2 WHEREAS, Section 1166(1) of New York Real Property Tax Law authorizes a taxing jurisdiction vested with title to real property by virtue of a foreclosure proceeding under that statute to sell and convey the real property so acquired, either with or without advertising for bids, notwithstanding the provisions of any general, special or local law, and WHEREAS, Section 1166(2) of the New York Real Property Tax Law further provides that no such sale shall be effective unless and until such sale shall have been approved and confirmed by a majority vote of the governing body of the taxing jurisdiction (except that no such approval shall be required when the property is sold at a public auction to the highest bidder), and WHEREAS, INHS has a successful track record in the City of Ithaca of converting dilapidated residential buildings into quality, affordable housing that is then rented or sold to low- and moderate-income homebuyers and possesses the technical and financial capacity to manage, secure funding for, develop and sell affordable housing, and WHEREAS, the City has determined that transfer of the above-mentioned parcels to INHS serves a public purpose; now, therefore, be it RESOLVED, That the City Chamberlain is directed to withhold 314-314½ S. Plain Street from the auction scheduled for June 23, 2011, pending transfer to INHS, and be it further RESOLVED, That the Mayor, subject to advice of the City Attorney, is hereby authorized to execute a purchase and sale agreement with INHS for the above listed parcels, in their as-is condition, with a sales price equal to the balance of all outstanding City, School and County taxes and any other City liens, on each property, with all costs associated with the conveyance, as well as the auctioneer’s fee, to be borne by the buyer, and which agreement shall commit the buyer to ensure the securing of the building immediately, remedy safety hazards and submit redevelopment plans for the property in a timely manner, and to ensure the permanent affordability of housing on the property, and be it further RESOLVED, That the Mayor, subject to advice of the City Attorney and the terms and provisions of the purchase and sale agreement, is authorized to convey a quit claim deed (or deeds) to 314-314½ S. Plain Street to INHS, and to execute any other documents required for such transfer. Building Commissioner Radke explained that the City has a serious problem with derelict houses and does not have funds budgeted for demolition, noting that this particular property has been posted as unsafe for habitation due to structural insufficiencies since 1997. She stated that this is a prominent building lot in the neighborhood and she believes that if a new house was constructed on it, the other building improvements that have been completed in the neighborhood would standout. She voiced her support for this initiative as it is guaranteed that the property will be turned over to a buyer with the resources to re-develop the site. Community Development Director Bohn reported that this property has been at the top of the Ithaca Urban Renewal Agency’s (IURA) list of properties for re-development since 1997. The property had been purchased privately through auction previously but no improvements were ever made. The IURA tried to purchase the property from that owner but the sale price along with the demolition costs made it prohibitive. City Attorney Hoffman reported that the City is quite far along in the foreclosure process, and the reason this is coming up so late is due to lack of communication between departments. He noted that Common Council action is required to remove a property from the auction list. June 22, 2011 3 Alderperson Zumoff questioned how the money exchange would work for the property. City Chamberlain Parsons responded that the City of Ithaca and Tompkins County have an agreement to split proceeds based on outstanding liens. She explained that if the property went to auction, there was a potential to make a profit on the property; however, there would be no guarantees that the property would be improved or redeveloped. The previous property owner would not receive money as the property has been foreclosed upon and now belongs to the City. Mr. Bob McIntyre, a local investor and owner of 316 S. Plain Street and 506 West Clinton Street, addressed Common Council to state that he is prepared to bid on this property at the auction tomorrow. He stated that he is prepared to invest up to $250,000 in the property so that it can be returned to the tax rolls, and be rented by next Spring. Ithaca Neighborhood Housing Executive Director Mazzarella stated that the INHS has been interested in this property for over a decade and has attempted to purchase it in the past but it was cost prohibitive. He further stated that INHS is prepared to demolish the existing building and construct a new home that would remain as a permanent affordable property. Alderperson Clairborne asked what would happen if the property goes to auction. Ithaca Neighborhood Housing Executive Director Mazzarella responded that INHS would not bid on the property because their by-laws require the Board of Directors to vote to purchase the property. He would not have the authorization from the Board by tomorrow’s auction. He could obtain that authorization in the near future however. Alderperson Clairborne expressed his concern regarding the fairness of this process. Although he likes the concept of an affordable housing project, other people have expressed interest in the property as well. He questioned why INHS should get to buy the property without going to auction. Alderperson Dotson stated that there is an important distinction with INHS purchasing the property in that they are guaranteeing to construct an affordable home to sell to an eligible owner to live in versus the possibility that someone will purchase the property and develop it into a rental property. Alderperson Rosario expressed his support for the purchase of the property by INHS. He stated that when he was running for office in 2007 this house was a major issue, noting that this will be his happiest day on Council if the uncertainty of a buyer can be removed, that a blight on the neighborhood can be removed, and that the City can be assured of a permanent, improved, affordable property for a home owner. Alderperson Clairborne stated that he is very familiar with the property and has researched its history. He stated that Mr. McIntyre’s properties are good quality, and that he is also supportive of INHS’s efforts to improve the City’s housing stock. He noted that he was just questioning the process. A vote on the Resolution resulted as follows: Carried Unanimously 2.2 Request of Downtown Ithaca Alliance to Offer for Sale and Consumption - Wine and Beer During the 2011 Summer Concert Series on the Ithaca Commons – Resolution By Alderperson Cogan: Seconded by Alderperson McCollister WHEREAS, the City Clerk has received a request to allow the Downtown Ithaca Alliance to offer for sale and consumption wine and beer during the 2011 Summer Concert Series on the Ithaca Commons, and WHEREAS, the Commons Advisory Board, at their meeting on May 6, 2011, offered a resolution in support of the Downtown Ithaca Alliance pursuing the establishment of a wine and beer garden during the 2011 Summer Concert Series, and June 22, 2011 4 WHEREAS, the Commons Advisory Board also supports the use of a private security company to monitor the sale and consumption of wine and beer in the designated area in Bank Alley, and WHEREAS, the City of Ithaca Special Event Team, at their meeting on June 20, 2011, expressed support for the addition of the wine and beer garden to the Summer Concert series, and WHEREAS, it is Common Council's responsibility to determine whether or not to allow the sale and consumption of alcohol on public property; now, therefore be it RESOLVED, That the Downtown Ithaca Alliance be authorized to arrange for the sale and consumption of wine and beer during the 2011 Summer Concert Series on the Ithaca Commons, and, be it further RESOLVED, That the Downtown Ithaca Alliance shall comply with all applicable state and local laws and ordinances, and shall enter into an agreement providing that it will hold the City harmless and indemnify the City on account of any claims made as the result of the sale or consumption of wine and beer on the Ithaca Commons, and, be it further RESOLVED, That the Downtown Ithaca Alliance shall, per the advice of the City Attorney, agree to maintain liability insurance in the amount of $1,000,000.00 and Dram Shop Act coverage in the minimum amount of $1,000,000.00, naming the City of Ithaca as an additional insured, and shall provide evidence of such insurance to the City Clerk. Carried Unanimously NEW BUSINESS: 3.1 Approval of Settlement of Litigation Regarding the Foreclosure and Redemption of 107 First Street - Resolution By Alderperson Cogan: Seconded by Alderperson Myrick WHEREAS, when a property in the City, due to non-payment of property taxes for at least two years, has been made the subject of a foreclosure petition, the “final redemption date” (i.e., the last date by which the delinquent taxes, and any associated penalties and interest, can be paid), as set forth in the petition and notice to the property owner, is the following April 15th; and WHEREAS, on October 6, 2004, the Common Council adopted a policy that authorized the City Chamberlain to allow redemption of such properties after said date, upon payment of the full amount due, up until the time that “the final judgment papers awarding title of the property to the City have been filed with the Court;” and WHEREAS, the owner of the property at 107 First Street failed to pay the property taxes associated with the property for at least two years (amounting to approximately $5,000), and, as a result, the property was included in the most recent foreclosure petition filed by the City; and WHEREAS, a notice sent by the City to the property owner, at her last address of record (namely, 107 First Street), by certified mail, was returned “unclaimed” (although the same notice, sent by first class mail, was not returned); and WHEREAS, despite additional efforts made by the Chamberlain to determine the owner’s whereabouts, the City does not have proof that the owner received actual notice of the pending foreclosure; and WHEREAS, the City filed the final judgment papers with the Tompkins County Clerk on June 6, 2011; and WHEREAS, the Supreme Court, Tompkins County, issued a judgment on June 17, 2011, granting title to 107 First Street (and other properties) to the City of Ithaca; and WHEREAS, an auction of foreclosed properties, jointly arranged by the City and Tompkins County, is scheduled for tomorrow (June 23, 2011); and June 22, 2011 5 WHEREAS, attorneys for the owner of 107 First Street commenced an action in the Supreme Court, Tompkins County, on June 17, 2011, by filing an ex parte application for an Order to Show Cause, claiming, inter alia, that the City’s attempt to notify the property owner of the pending foreclosure action was insufficient according to law (citing a US Supreme Court decision in 2006 which found that a state’s obligation to notify a property owner facing foreclosure goes beyond an unsuccessful certified mailing); and WHEREAS, the Court granted the Order to Show Cause, the terms of which include restraining the City from conveying 107 First Street, pending a determination of the issues raised by the lawsuit; and WHEREAS, due to the judge’s schedule, the return date in that action (i.e., when the Court will hear the arguments of both parties) is not until July 15, 2011 – well after the date of the scheduled auction of the property, and the withdrawal of 107 First Street from said auction would mean that the City will incur a fee of approximately $500.00; and WHEREAS, in light of the contested and unresolved questions of law (regarding required notice), and the uncertainty and potential complications of a court decision in this matter, the parties have negotiated a proposed settlement of this lawsuit, pursuant to which, under the particular circumstance of this case, the property owner would be allowed to discharge the delinquency through immediate payment of all taxes due and associated penalties and interest, together with the fee due to the auctioneer, and the property owner would release and hold the City harmless from any claims she may have regarding the foreclosure effort; and WHEREAS, the attorney for the property owner has confirmed that he holds in escrow $5,500 from his client, from which monies the City will be paid in full if the matter is settled; now therefore be it RESOLVED, That the Common Council approves of the above-described settlement (in Glowa v. City of Ithaca), and directs the City Chamberlain to accept payment in full of the taxes due for 107 First Street, as well as reimbursement of the auctioneer’s fee, and authorizes the Mayor to execute any and all documents necessary to implement said settlement. City Attorney Hoffman clarified that his office views this as a unique case and explained that Common Council has a policy regarding a deadline when people can redeem their properties. He explained the circumstances of this case as it pertained to noticing requirements and relevant case law on the topic. A vote on the Resolution resulted as follows: Carried Unanimously 3.2 First Ward Upcoming Vacancy: City Clerk Conley Holcomb reported that one letter of interest for filling the upcoming vacancy in the First Ward that will be created upon Alderperson Coles’ resignation – effective July 7th had been received by the established deadline, which was 5:00 p.m. today. Alderperson Dotson expressed her discomfort with making an appointment to the seat when there is a contested race as she feels it could give someone an unfair advantage. A brief discussion followed on the floor regarding whether the deadline to submit letters of interest should be extended. Motion to Extend Deadline By Alderperson Rosario: Seconded by Alderperson Myrick RESOLVED, That the deadline to submit letters of interest in filling the upcoming vacancy in the First Ward be extended. Mayor Peterson noted that this action would have to be added to the agenda in order to be considered pursuant to Common Council’s Rules of Order. June 22, 2011 6 Alderpersons Mohlenhoff and Cogan objected to this item being added to the agenda, so no further consideration took place. Mayor Peterson reminded Council that there would be a Special Joint meeting of Common Council and the Board of Public Works on June 28, 2011 to discuss suicide means restrictions on the city’s bridges. Alderpersons McCollister and Zumoff noted that they would not be able to attend the meeting. ADJOURNMENT: On a motion the meeting adjourned at 8:00 p.m. ______________________________ _______________________________ Julie Conley Holcomb, CMC Carolyn K. Peterson, City Clerk Mayor