27 - Proposed forgiveness of civil penalties on property located at 1416 W. Kaufman

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TO: City Council Gene Anderson, Interim City Manager FROM: Stephanie H. Harris, City Attorney SUBJECT: Proposed forgiveness of civil penalties on property located at 1416 W. Kaufman DATE: January 21, 2020 BACKGROUND: In October of 2012, the Building Standards Commission issued an order of demolition on the residential structure located at 1416 W. Kaufman and ordering civil penalties in the amount of $1,000.00 per day if the work was not completed within 30 days. Rather than demolish the structure, the then -owner sold the property to its current owners who were able to rehabilitate the structure and make it code compliant. The now -owners completed the work in December of 2013 and have been residing in the home. As of last week, city code officers were able to confirm that the structure is still in good condition and code compliant. The owners would now like to sell the property, but unfortunately, the order for civil penalties is still attached to the property, and as of January 15, the civil penalties ran to $426,000.00 plus 10% compounding interest, which is far in excess of the value of the property. STATUS OF ISSUE: The current owners have asked that the city to forgive the civil penalties and interest accrued on the property so that they might sell it. The owners bought the property subj ect to the order, but they rehabilitated a structure that was due to be demolished, thus increasing the property's taxable value. There is a public purpose in forgiving the civil penalties in that doing so will allow sale of the property to an owner who can maintain the property and thus contribute to the well-being of this West Paris neighborhood. BUDGET: No discernable impact; council would be forgiving well over $500,000.00 in penalties and interest, but those penalties and interest would be next to impossible to collect given how many times they exceed the value of the property itself. RECOMMENDATION: Move to approve a resolution forgiving civil penalties in the amount of $426,000.00 plus interest on the property located at 1416 W. Kaufman.