The City of Morgan Hill is moving ahead to purchase the property at 17545 Depot Street for $925,000. The eventual intention of the city is to demolish the building and used the combined area, along with the cleared lot at 85 East First Street, to construct an affordable housing project.
When the city bought the property at 50 East First Street last year in a probate sale, Ralph Bader, the owner of the building at 17545 Depot Street—which contains four one-bedroom apartments—approached the city to inquire if they would be interested in buying his property as well.
The interest was mutual, and the Morgan Hill City Council voted that city staff should go ahead and buy the Depot Street property, which Valbridge/Hulberg Property Advisors valued at $905,000.
After negotiations with Bader the city agreed to purchase price for $925,000, 2 percent higher than the appraisal amount.
The city used funds from the Housing Fund to purchase the property and is now seeking nonprofit developers to construct affordable housing on the 17,700 square feet of property. According to documents made available at the April 4 Morgan Hill City Council meeting, “The property is strategically situated in the downtown core with easy access to transit, parks, amenities, and services, in a walkable environment.”
“It was bought using a housing fund, which stipulated that the money needs to be used for affordable housing,” said Assistant City Manager Leslie Little.
The building at 17545 Depot Street is a single story, wood-framed building, built in 1967, with a large concrete patio and a former garage that was converted into an apartment.
Following necessary environmental studies, the city must give Bader sufficient time to notify tenants—about three months—before demolition. After that, the site will be used for temporary parking until construction of the affordable housing project begins.
