Memorandum

City of Lawrence

Planning & Development Services

TO:	David L. Corliss, City Manager
FROM:	Brian Jimenez, Code Enforcement Manager
CC:	Scott McCullough, Director Planning & Development Services
Date:	May 9, 2012
RE:	1313 Haskell Avenue

Background

On May 18, 2010, staff presented Resolution No. 6885 by conducting a public hearing for the two dilapidated structures located on the property.  The two structures discussed were the principal building (white two story house) and accessory structure (detached garage).  At the conclusion of the hearing, the City Commission determined both structures were unsafe and should be removed if Greg Seibel (owner) could not successfully rehabilitate both structures.  At the conclusion of the hearing, the City Commission decided to give Mr. Seibel until October 15, 2010 to make substantial repairs that the City Commission had asked staff to identify in the adopted resolution.

At the request of the City Commission, staff presented an early update to the City Commission on September 28, 2010.  Staff stated a diminutive amount of repairs had been made.  The City Commission directed staff to provide a final update at the October 19, 2010 meeting.

On October 19, 2010, staff informed the City Commission that Mr. Seibel had failed to complete the requirements as identified in Resolution No. 6885 and that it was staff’s opinion that the City should move forward with the demolition of both structures. 

At the October 19, 2010 meeting, Mr. James Grauerholz advised the commission that he had gathered a group of investors, Haskell Row Partners (HRP), which would pursue buying the property to successfully rehabilitate the house and demolish the accessory garage.  A decision on how to move forward was deferred one week to allow Mr.  Grauerholz and his group of investors more time to determine how they could succeed.

On October 26, 2010, staff provided an update of the possibility of HRP completing the purchase of the property.  Michael Almon (Partner) and Mr. Grauerholz provided information to the City Commission on how they envisioned successfully rehabilitating the house.  Mr. Grauerholz further stated that he and Mr. Seibel had signed a contract for HRP to purchase the property. The City Commission unanimously voted to defer the matter for sixty days and receive a staff update at that time.

On January 4, 2011, staff presented an update to the City Commission.   Staff reported that HRP completed the purchase of the property on December 23, 2010.  Furthermore, staff explained that the majority of HRP’s time since the October 26, 2011 meeting was spent on making sure the sale was completed as Mr. Seibel had waivered on the decision to sell the property.  By purchasing the property, HRP assumed the liability of Resolution No. 6885 which had the following 15 items identified to be resolved to begin the process of demonstrating a good faith effort to rehabilitate the house. 

1. The front, side and rear yards shall be properly graded which will require the grade to slope 6 inches away from the foundation within 10 feet of the house foundation.  (front and side yards completed) 
2. All open trenches will be required to be filled.  (completed)
3. All yard areas should either be seeded or sod laid to prevent soil erosion.  (front yard completed)
4. The front, side and rear yards must be clear of all miscellaneous storage, debris and other items.  (front and side yards completed)
5. The front porch of the house must be constructed.  A building permit and a licensed contractor will be required to complete the work.  (not completed)
6. All deteriorated areas of the porch roof must be repaired and painted. (not completed)
7. All deteriorated areas of the eaves of the house must be repaired and painted.  (not completed)
8. The roof of the house must be repaired which will require the chimney chase opening to be properly framed and roofed. A licensed contractor will be required to perform the work.  (not completed)
9. All windows will be required to be fully operational which will require all boards to be removed and broken window panes to be replaced.  (appears to be completed)
10. The garage must have all siding completed, the roof sheathing completed and the doors repaired. City inspection staff will inspect the framing of the garage to determine if there is additional framing that will be required.  All additional framing work to the garage will require a building permit and a licensed contractor.  (not completed)
11. The house and garage must be painted in their entirety. (not completed)
12. Plans for the proposed rear retaining wall on the west side of the foundation will be required to be submitted on the building permit application.  A licensed contractor may be required for the construction of the wall.  (not completed)
13. City inspection staff will need to verify the west wall of the basement is properly framed for load bearing capacity.  (not completed)
14. The west wall of the basement will be required to be sided.  (partially completed)
15. City staff will need to verify the method of attachment of the house to the foundation to determine if such attachment is code compliant.  If not compliant, city staff will require engineered approved attachments or an attachment device listed specifically for foundation attachment to be submitted for review.  (not completed)

In addition, HRP clearly articulated that their plan was to bring the property into compliance with all applicable city codes.  It is important to note that the 15 items listed above were the first steps towards a complete rehabilitation that the commission asked staff to identify that would have demonstrated a good faith effort from Mr. Seibel when the commission decided to grant an extension of time.

As a result of the unforeseen difficulties of completing the purchase of the property, staff recommended deferring the demolition order for 60 days to permit the owners to make substantial progress on the items outlined in Resolution No. 6885. The City Commission unanimously voted to defer the item for 60 days.

Over the next several months’ staff worked with HRP to begin the process of moving forward with the rehabilitation.  On April 29, 2011, Michael Almon provided staff a detailed update of their progress.  Some of their progress was identified as the following:

• Removed considerably more items from within the house.
• Cleared all scrap salvage metal from the outside storage, cleared out entire garage including the car, cleared out the entire basement (stored some usable lumber in the garage), and cleared trash from the far back of the lot.
• Rebuilt the interior stairs (rough for construction purposes).
• Installed a new sump pump by the west basement entry.
• Arranged for locator service for all utility lines.
• Identified exact location of sanitary sewer tie-in to main.
• Met with Black Hills Energy and identified location for gas service
• Consulted with three roofing companies, and received a bid from one so far.
• Consulted with three architects, and contracted with Dan Hermreck to provide us with "as built" dimensional floor plans.
• Incorporated as a Kansas Limited Liability Company
• Set up bank account

On July 29, 2011, staff received another update from Mr. Almon. He stated Black Hills Energy installed a new gas line from the main to the gas meter.  He advised their intentions were to begin “roughing” in the utilities on the inside of the house and repair the roof and gutters.  A few days later on August 4, 2011, another update was provided stating the City Water Department set the water meter. 

On August 10, 2011, staff met with Mr. Almon to discuss additional recent developments.  Mr. Almon advised staff that HRP were in the initial discussions with Daniel Hoyt who was seriously interested in purchasing the property.  Mr. Almon stated Mr. Hoyt was in the construction field and would have the knowledge and assistance to successfully rehabilitate the house.

Recent Developments

Over the next several months, Mr. Hoyt stayed in contact with staff advising he was still on course to become the owner as he was working towards securing the necessary financing.  Unfortunately, on January 3, 2012, staff was informed by Mr. Hoyt that he could not secure the financing and he was not optimistic his situation would change. 

Through email correspondence on January 5, 2012, Mr. Almon acknowledged HRP’s disappointment in not being able to sell the property.  Mr. Almon stated HRP was regrouping to restart their “plan A” which would be to generate construction funds by re-establishing contact with their possible fund resources.

On February 8, 2012, staff re-contacted Mr. Almon as staff had not received an update from the previous email correspondence.  Mr. Almon stated HRP has begun their efforts to raise operating capital through small loans from individuals and businesses.

Staff had not received further correspondence since February 8, 2012; therefore, staff asked Mr. Almon for update on April 3, 2012.  Staff did not receive an update.

On April 26, 2012, staff notified Mr. Almon via email that the issue was going to be brought back to the city commission for further discussion.  Mr. Almon informed staff that there were a couple of possibilities that were emerging with one being a small loan to renew the construction process.  Secondly, staff was told that a client of a local builder is interested in buying the property “as is” and then having the contractor do the remodel.

Conclusion

Staff recognizes that HRP has made progress in regards to the overall cleanup of the property; however, the scope of work that has taken place concerning the house and accessory garage has stalled and is viewed by staff as minimal.  As mentioned, HRP’s plan was to demolish the garage.  It is staff’s opinion that the demolition of the garage was an achievable task that should have occurred without considerable costs.

The issues concerning the house are of a much larger magnitude.  For the most part, the house remains in the same uninhabitable condition as staff observed and described to the City Commission in 2010.  The water, gas and sanitary sewer are connected; however, the interior and exterior of the house are far from being completed. 

Additionally, HRP acknowledges that they do not have the funding to continue the project and concede they are attempting to raise the funding necessary to complete or advance the project.  Staff applauds HRP’s efforts in purchasing the property with the intention to fully rehabilitate; nonetheless, the lengthy period of inactivity has triggered the need to revisit the issues that were discussed in 2010.

Action Requested

Based on the documented lengthy history of the property being in its current uninhabitable state of condition; it is staff’s recommendation that the city commission orders the demolition of the house and accessory garage without further delay by adopting Resolution No. 6971. 

It is staff’s opinion that the only feasible solution in lieu of the demolition of the structures would be for a new owner to come forward and obtain a building permit by June 1, 2012 and to complete the rehabilitation by a specified date that is agreed upon by the city commission.