memo-01-12-2016-12

January 12, 2016

MEMO TO:           Mayor Barber and Board of Commissioners

FROM:                  Frank A. Rush, Jr., Town Manager

SUBJECT:           Proposed Demolition of 7405 Archers Creek Court (Single-Family Residence)

The Board of Commissioners is scheduled to consider two formal actions at the January 12 meeting that will result in the demolition of an existing single family residence at 7405 Archers Creek Court.  This structure, owned by Flynn T. Thrash, has been in an unsafe condition for the past few years, and has not been occupied in several months.  Despite numerous attempts by Town staff (both informally and formally) since 2012 to have the owner resolve the outstanding life safety issues, the unsafe condition has not been resolved. As a result, I recommend that the Board approve the attached resolution and ordinance formally authorizing the Town-initiated demolition and imposing a lien on the property to enable the Town to eventually recover the $5,500 expense associated with demolition and disposal.  The attached General Fund budget amendment formally appropriates this amount for this purpose.

As noted in the text of the attached resolution and ordinance and in the attached memo prepared by Josh Edmondson, Town Planner, the Town has been attempting to resolve water intrusion, rot, ceiling collapse, severe mold growth, deck deterioration, and other code violations at 7405 Archers Creek Court since 2012.  As is the case in nearly all Town enforcement actions, we initially attempt to resolve concerns in a helpful, cooperative manner, and that approach was utilized repeatedly in previous dealings with the owner of 7405 Archers Creek Court.  Due to the seriousness of the current deficiencies and the clear life safety hazards, the long period of time that has elapsed with no progress, and the ceasing of return communications from the owner, the Town is left with no alternative than to proceed with the Town-initiated demolition of the structure.  The attached resolution and ordinance outlines the various deficiencies and life safety concerns, outlines the process undertaken by the Town (in accordance with applicable NC General Statutes and the Town Code of Ordinances) up to this point, and formally authorizes the demolition of the structure.  Because the Town will incur a significant expense to demolish and dispose of the structure, the attached resolution and ordinance also authorizes the imposition of a lien on the real property at 7405 Archers Creek Court and the accrual of interest at a rate of 8% per annum. The attached resolution and ordinance also authorizes the Town to foreclose its lien in the future if desired.

Town staff have secured three bids for the demolition and disposal of the structure, and the lowest bid was submitted by SunLand Development and Construction, Cape Carteret, NC, in the amount of $5,500.  The other bids received include prices of $7,950 and $11,000.  Due to the relatively new age of the structure, we do not expect any asbestos issues.  Thus, if the Board approves the attached resolution and ordinance and budget amendment we intend to award the demolition and disposal contract to SunLand Development and Construction in the amount of $5,500.  The scope of work is such that the end product will be a vacant lot, with the exposed ground re-seeded. 

The Town is on pace to exceed the FY 15-16 revenue estimate for development permit fees, and the attached budget amendment formally appropriates additional anticipated development permit fees for the demolition and disposal of 7405 Archers Creek Court.  The Board should note that the timing for the reimbursement of the $5,500 expense is highly uncertain.  Town staff will invoice the owner for this cost after the work is complete, and a lien will be imposed on the real property at 7405 Archers Creek Court.  Depending on the eventual disposition of the real property at 7405 Archers Creek Court, the Town may find itself waiting for several months or perhaps years to recover this cost.  As noted, interest will accrue at a rate of 8% annually, or $440 for the first year.  Additionally, the Town may decide to foreclose its lien in the future to recover the full amount of the Town’s cost, plus interest.  I am hopeful that the accrual of interest and the threat of foreclosure will encourage the owner to reimburse the Town for this expense sooner rather than later.

The Board should note that Josh Edmondson was informed several weeks ago by a local private agent that he was assessing 7405 Archers Creek Court on behalf of an Oregon lending institution.   We remain hopeful that the owner and/or the lending institution may yet resolve the outstanding concerns without Town action, however, we have received no communication from the owner, agent, or lending institution in recent weeks.  If the Board approves the attached resolution and ordinance, I will task Josh Edmondson with contacting the owner and the agent one more time before the Town executes the demolition contract.  If there is no response, the Town will then direct SunLand Development and Construction to proceed.

The entire formal process associated with the demolition of 7405 Archers Creek Court has been coordinated with Town Attorney Richard Stanley, and I believe the Town has far exceeded the minimum legal requirements to undertake this action.  Josh Edmondson, Richard Stanley, and I look forward to discussing this issue with the Board at the January 12 meeting.