08. Authority to Advertise for Sale - 705 7th Ave WestIncorporated 1892
Planning, Economic &
Community Development Department
P.O. Box 1997
Kalispell, MT 59903-1997
MEMORANDUM
DATE: January 31, 1995
TO: Lawrence Gallagher, Director
Planning, Economic and Community Development
FROM: Susan Moyer, Housing Manager
Planning, Economic and Community Development
248 Third Avenue East
(406) 758-7740
(406) 758-7739 (office fax)
(406) 758-7758 (City Hall fax)
SUBJECT: Jensen House - To Be Discussed At Council Workshop 2/13/95
The City of Kalispell rehabilitated a structure during the winter of 1992 located at 705 Seventh
Avenue West. The rehabilitation was funded through a second City -made mortgage in the
amount of $17,000 and a deferred third in the amount of $13,394. The deferred mortgage was
to be repaid if the structure was ever sold.
In July of 1993, the owners filed a Chapter 13 bankruptcy in which they listed Barclay's
American Mortgage and the City of Kalispell as "unimpaired secured claims." In June of 1994
the City became aware that the owners were almost four months delinquent on their first
mortgage and that Barclay's were soon to start foreclosure proceedings. A "Motion for Relief"
was filed in Bankruptcy Court in Butte, Montana in July of 1994. This motion would have
allowed Barclay American Mortgage to foreclose on a homestead.
To protect the City's investment of $30,394, staff sought City Council approval to pay off the
first mortgage and procure ownership of the property for later resale. This approval was first
given at Council Work Session on August 8, 1994 and then formally at the following Council
Meeting on August 15, 1994.
At the time of closing the City paid a total of $48,910.04 for the following:
Current Total Unpaid Principal Balance
Interest at 9.00000%
Escrow/Impound Overdraft
Unpaid Late Charges
Fax Fee/Closing Agent (1st Mortgage)
Attorney Fees
Total Amount to Pay Loan in Full
$45,862.92
1,891.84
445.44
94.84
5.00
600.00
Thus the total investment the City had in the property as of acquisition is $79,304.04.
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Upon entering the premise, the structure was found to be in shambles and had been stripped
of all kitchen appliances and wood burning stove. The City has invested $4,181.34 in cleanup
repairs and new appliances. The total investment is now at $83,485.34.
We recommend the property be offered for sale in the amount of our total investment --
$83,485. To do so, we need a resolution passed at the next regular Council Meeting, February
21, 1995, authorizing us to advertise the property for bid. If the Council chooses to offer to sell
the property at the Fair Market Appraisal Value, we can so word the advertisement and
proceed with soliciting an appraiser. Staff has spoken with two different appraisers who
would be in a position to do an appraisal the latter part of next week. One quoted $400 and the
other quoted a price of $425.
Please advise how we are to proceed.