Darrel Kallembach lost ownership of 19 houses in Platteville because he didn’t meet a deadline to pay more than $300,000 in fines.
The City of Platteville now has a deadline for 12 of the 15 houses the city owns — sell them by Jan. 1, or have them removed from the tax rolls, and lose their property tax revenue.
Nine of the 12 houses are being sold under a Request for Proposal bid process, instead of by a real estate agent. Three of the houses may be added to the RFP after a petition by Kallembach’s father, Leonard, to block the deed transfers was denied in late May. The remaining three houses won’t be sold by the city under the proposed RFP.
Dane County Circuit Judge David Flanagan denied May 23 Leonard Kallembach’s motion to block the transfers of the properties at 235 N. Third St., 430 S. Chestnut St., and 1536 County B in the Town of Platteville.
City Manager Larry Bierke said Tuesday morning that the process to annex the County B property into the city is under way. A public hearing on the annexation may be held as soon as Tuesday’s Common Council meeting.
A document available in draft form at www.platteville.org describes the sales as a “Property Sale and Redevelopment Opportunity.” The draft RFP says the city “desires to sell the properties to a qualified developer who will remodel and improve the structures to bring them into conformance with the City’s rental code, as well as improving the exterior appearance of the properties. Alternatively, the developer could remove the structures and construct new housing on the properties that is attractive and compatible with the surrounding neighborhoods.”
All of the houses are in R-2 or R-3 Residential zoning. The houses range in size from 1,064 square feet at 440 Southwest Road to 1,949 feet at 255 Division St., and lot sizes range from 5,000 square feet at 185 Center St. to 9,234 square feet at 375 Irene St. Assessed value ranges from $49,800 for the Center Street to $104,200 for 260 S. Chestnut St.
The oldest houses are on Center Street and at 565 W. Cedar St., both built in 1880. The newest houses are at 310 W. Gridley Ave., built in 1961, and 440 Southwest Road, built in 1964.
The RFP includes minimum prices for each house, ranging from $13,000 for Center Street to $27,000 for 260 S. Chestnut St.
The RFP states that bidders will be chosen by a points process beyond meeting the minimum price, with points awarded for “projects that add financial value to the existing neighborhood,” “projects that improve the historic character and curb appeal of the property,” “experience in projects comparable to the one proposed,” with bonus points for proposals with “a comprehensive redevelopment strategy for multiple building sites” and “significant ‘green’ building techniques and/or Energy Star construction.”
The draft RFP was compiled by Community Planning and Development Director Joe Carroll and at-large Ald. Amy Seeboth.
“We should sell these quickly,” while adding the stipulation “adds value to the neighborhood,” said Seeboth. “If we structure it correctly, we can accomplish all these things at once.”
At-large Ald. Mike Denn said the points system would be useful if properties attracted “a whole bunch of buyers out there,” but “if we end up with only one or two buyers, it might be part of putting too much pressure” on buyers.
“We do need to keep this fairly simple, so somebody doesn’t look at this and says it’s going to take three weeks to fill this out; I’m not interested,” said Carroll.
“This presents a great opportunity; it also creates a great challenge,” said District 3 Ald. Barb Daus. “If the properties end up looking worse, the council has not done its job.”
Seeboth and Denn debated whether the RFP should include minimum bids.
Seeboth said the minimum bid “pigeonholes us unnecessarily.”
“Are you folks interested in recouping our $370,000?” asked Denn. “You need to get that at least out.”
The minimum bids for the nine properties listed in the RFP total $177,000.
Seeboth said with a “tear-down/rebuild, it will at least double the assessment.”
“We need this money now,” said Denn, who said the minimum bids represent at least “a very inexpensive lot.”
District 4 Ald. Ken Kilian asked what would happen if a successful bidder failed to follow through on its bid. The RFP includes no stipulations for nonperformance.
“Less tangible, more aesthetic sorts of things are harder to say that somebody didn’t do it and to impose a penalty,” said City Attorney Brian McGraw.
The city used $288,341.96 of the $366,765.38 of fines and interest on Kallembach’s 19 properties in successfully bidding on 15 of them in the January 2013 sheriff’s sale. The $366,765.38 in fines and interest came from more than 100 citations Kallembach was issued for violations of city ordinances between 2008 and 2010.