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Property Owners Share Buyout Stories

August 17, 2012

Heidi Harris/Times-Record Crews do initial work to Lance Apartments before they are demolished. Lance Apartments was bought out by the city’s buyout program because they are in a flood-prone area.

Being uprooted from home can cause a string of emotions to anybody, but for some Valley City residents, they feel a sense of relief being away from the flood-prone Sheyenne River. Those residents had properties bought out by the city. Valley City’s voluntary acquisition program allows the city to acquire properties close to the river that cannot be safely and permanently protected from floods.

Valley City City Administrator David Schelkoph said, “Given the proximity of (property owners’) homes to the river, it was becoming impossible for the city to protect them from flooding. Rather than letting its citizens suffer from flood damages to their homes, the city decided to try a voluntary buyout instead.”

Joseph and Renee Martin owned a home by the river that was slated for city buyout. They’re one of ten who have already closed on the deal.

The Martins have since found another home thanks to Lawn Realty. Renee said she’s relieved to be away from the river and that this program is an effective way to deal with the floods in Valley City.

“(Our new home) is just right for a retirement home. We’re happy,” Renee said.

Gloria Engler and her husband Victor owned a rental property that was bought out. They only had one tenant who found a new place to live in May upon receiving notification of the buyout.

“We need this program so badly in Valley City. We knew we’d been approached by FEMA (Federal Emergency Management Agency) many years ago but nothing happened. I was so happy to see it happen even though we lost some houses,” Gloria said.

Gloria has lived in Valley City since 1946 and says she has seen many floods.

Berkel Properties, which owns Lance Apartments, an apartment complex located on College Street, had eight tenants when they were informed of the buyout, and found more difficulty in their situation.

“It was a tough situation for the tenants and for us. We really didn’t want to sell the building but it was best for the city. To replace the building is well over $1 million,” Bob Bergan, owner of Lance Apartments, said.

He and partner Wayne Keller are considering replacing the building but nothing is set in stone.

“It’s not an easy option. We’re not 100 percent sure,” Bergan said.
Tenants received a notification once the city made the determination and approved the appraisal on June 15. Bergan said there were a lot of rumors prior to the confirmation but nothing was firm.

“We let them know right away. They had 45 days to move out. That was the best we could do for them,” Bergan said.

Bergan said he thinks most of his tenants, about half of which were college students, have found different places to live but said a couple had to move out of town due to a housing shortage in Valley City.

Personal property was salvaged from the building along with some windows and cabinets from the building itself, which Berkel Properties has to pay for.

As of Tuesday, the city had closed on 10 of the 30 properties the city has acquired, City Attorney Russell Myhre said.

“The majority of the rest of them are signed up with purchase agreements. We’re going to be closing on purchase agreements next week,” Myhre said.

Property owners had a couple options in the buyout program. They could either accept the city’s buyout figure of 110 percent of their 2009 taxable assessed evaluation, or they could request to have an appraisal done based on 2009 figures. Property owners who were not satisfied with either figure could ask for a second appraisal but had to pay out of their own pockets. The city pays for the first appraisal.

The reason for using figures based on 2009 was that the assessment or appraisal looked at the property before any potential damage was done from that year’s flood, Myhre said.

Myhre said the buyout program is voluntary.

“The city is not taking any legal action to require people to participate,” Myhre said. “But if the property owner does not want to participate in the program, they’re going to be responsible for flood protection on their own property.”

Myhre said things have gone fairly smoothly and that people are pretty happy with the program.

Once buyout deals are closed, the city will move forward with removal and demolition of the properties.

According to the contract with the State Water Commission, who provided $3 million in funding for the project, the city is required to have properties demolished in six months from the time of the buyout.

“Right now, we’re working in the background to put together some proposals. We’re going to wind up soliciting for contracts, Myhre said.
The city is still in the tentative initial stages of demolition, and Myhre said, “Hopefully on or about Oct. 1, we’re going to have some contracts in place for people to move or demolish properties,”
He added that city officials are hoping to get all the demolishing done before winter sets in.

Myhre said a fair amount of property owners do some level of salvage to their property, like taking windows. They are allowed to move garages and entire houses, at their own expense.

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