Redevelopment

The Redevelopment Agency met on Tuesday for an hour or so at City Hall.

Nehemiah's Michael Taylor spoke about the progress of the North End Homeownership project. At this point, Nehemiah and Broad Park are still trying to assemble the funding to build 15 home-ownership units on Ferry, Green & Rapallo (another 2 will be built by Habitat for Humanity). They have pursued a number of funding possibilities, which I have detailed ad nauseum in other EYE posts, here and here, which are contingent on receiving a construction loan from Liberty Bank. In October, Nehemiah notified us that Liberty will not loan the money for the construction unless they believe that there is still a market for these homes, so they are requiring an "after-rehab" appraisal, and a study to estimate how long it will take the homes to sell (we all know how much that ballgame has changed since this project began a few years ago, when real estate was selling like hotcakes.)

Astute readers of the EYE will notice that this is exactly where we stood a few months ago. Unfortunately, the appraisal has not begun because of some sort of internal snafu (it's not entirely clear where) that will require Nehemiah to pony up $4,000 before the appraisal will be done. Hopefully by this writing, Nehemiah has mustered up the funds to take this next step. It is, after all, an expected cost that a developer will face, and one which could be covered by the CDBG* funds that the City has already allocated for this project. But, as I believe is common with CDBG funding, the developer is expected to pay the cost up front and then get reimbursed after the paperwork is all signed, sealed and delivered.

Speaking of cash flow, David Bauer raised the question of how much it is costing Nehemiah for each month that the project delays. Although Michael will bring firmer figures to our next meeting, he estimated that it takes $5,000 to $6,000 monthly to keep this project on hold, including interest payments on the properties they bought, and utilities. He reassured the agency that these costs and his administrative time do not add to the cost of the project -- they are covered through the "Developer's Fee", which is recouped at the end of the project, when the properties are sold and the loan is paid off.

Other Redevelopment Agency members pushed for more of a timeline from Nehemiah. After the appraisal, it looks like the next hurdle is February, by which time they should learn whether they will be moved up from the waitlist for the Federal Home Loan Bank funds or whether they should make a March application for a June award from those same funds. Nehemiah has named next June as a critical juncture -- if funding is not in place by then, they will look at phasing the project, although that would create a large amount of extra paperwork with DECD.

Hopefully, they will receive good news over this winter. Also, Michiel Wackers dangled the hope that this project might be eligible in case the new administration in Washington, DC releases any "New Deal" type grants for local projects. This one is all approved and "shovel-ready" as they say.

But there's no question that the Redevelopment Agency is getting antsy as the months go by.

* CDBG is short for "Community Development Block Grant" funds, which is federal money from HUD (Housing and Urban Development) which goes to cities and towns with "urban" problems. Middletown gets a pot around a half-a-million each year, some of which goes to the operating budget of social service programs in town, and most of which helps with various bricks and mortar projects. Decisions about where to spend CDBG funds are made at the local level by the CAC (Citizen's Advisory Council) and the Common Council. Put that in your alphabet soup!