A 'milestone:' first 55 of perhaps 1,300 buyout offers go out

City Hall has sent out the first 55 letters to property owners with offers to purchase their flood-damaged property.

The letters are the start of what city officials expect may be as many as 1,300 property buyouts before all is said and done.

“I think it's a milestone,” Jennifer Pratt, the city's development coordinator, said this week of the first buyout offers.

Rita Rasmussen, the city's senior real estate officer, called it “a great step” and she said the timing of the letters keeps the city on the timeline it created for buyouts.

More letters - they are coming from ProSource Technologies Inc., a Minneapolis firm working for the city - will be going out to a total of 107 owners of property close to the Cedar River whose property is being bought out with Federal Emergency Management Agency funds to create a greenway so houses near the river can't flood again.

Others farther from the river will go though a similar process in the months ahead with the use of federal Community Development Block Grant funds.

 As of Thursday afternoon, six of the first 55 property owners had signed the purchase offer and returned it to the city. Signing the letter puts in motion a final 30- to 90-day closing process, which culminates in the actual purchase. Owners can back out any time before that, Rasmussen explained.

Rasmussen was quick to reiterate what city officials often have said: That is, the buyout process is complicated.

Dan Miller, who received one of the buyout offers for his flood-destroyed house 1412 Third St. NW, was left fuming on Thursday about the letter he received. He called it “deceitful and very deceiving.”

Miller said the letter displays in bold print how much the city will offer the owner for the property after deductions for earlier FEMA payments. But he argued that the letter doesn't state clearly enough that deductions for liens on the property aren't yet factored in and easily could lessen the amount before the sale is closed.

One such lien is state Jumpstart funds for down payment assistance, which Miller and others received. Interestingly, that assistance up to $25,000 will not be deducted from the buyout offer in some part because of Miller's successful work as a citizen advocate in pushing to have it excluded. But Miller said owners like him still have to apply for the exclusion, and it isn't clear if everyone will qualify, he said.

The city has hired professional firms to meet one-to-one with owners, to handle legal work and title searches and to provide mediation as part of the buyout process . Rasmussen urged owners to arrange a meeting with the city-provided agent to go over questions.

Mayor-elect Ron Corbett has said he would like to see owners have access to an advocate if they desire one so they feel they are meeting the city's contractor on a fair playing field. Miller said he likes the idea.

Initially, FEMA approved funding for the buyout of 117 properties along the river. Ten of those 117, though, have decided to keep their houses, she said.