Redevelopment authority trying to operate with little funding
The Redevelopment Authority of the City of Kenosha met this past Tuesday night. A foreclosed four-plex was found on 37th Avenue, and the city requested a check for $10,000 to put down as earnest money on this property, whose purchase price is $70,000.
Charles Labanowsky, who has five properties to sell, was present and spoke on behalf of his partners and himself. He said, “There is a whole array of visions in this town,” and he mentioned the YMCA, the Boys and Girls Club, the Kenosha Area Soccer League, the Market, the Museums. He stated that he and his partners are flexible and would be willing to work with the city and stagger the sales of the properties, if that would help the city. “Having an entire block would be of benefit to the city,” he said. Labanowsky stated that the last property he sold to the city went for $145,000. The next one could go for $135,000, which is $10,000 less than the assessed value.
Alderperson Anthony Kennedy spoke from the audience and stated that his opinion was that “the ability to buy properties above the market value won’t go well with the Council. The 37th Avenue purchase is an arrow in our quiver (to be able to find a property at that price). “This committee has taken some hits,” he said, “since I was first elected. The budget started at $500,000; then, the budget was halved, and now it’s even worse. We’re being asked to make bricks without straw,” he said, “and we have no Moses to lead us.” His recommendation was to continue to buy foreclosed properties until more funds are found.
Jeremy Mitchell spoke about trying to find other funding sources and partnerships, like Supportive Housing. Possibly a plan could be worked on with them. Mitchell stated that they are interesting in working in Wisconsin.
Alderperson Katherine Marks wanted to know the amount of the funds they had available to work with. Jeff LaBahn, city development director, responded that there is about $105,000 left. Zohrab Khaligian, city development, stated that there is no 2011 redevelopment authority funds. The actual cash balance was borrowed from the previous year, 2010. Marks wanted to know where the funds were that would be available for a project. Khaligian replied that the preference of the City Council would be for the Redevelopment Authority to bring forward a project, and the Council would then find the money for it.
Bob Johnson, vice chairperson, suggested that Mitchell work with Labanowsky, with the Redevelopment Authority, and even the Kenosha Housing Authority.
John Potente, committee member, wanted to know how many more foreclosed properties were available. Marks stated that she didn’t know of any, and that she had a real estate agent looking for the committee. Potente thought that was proactive of her. Potente also thought that this one property, with the low purchase price, will skew our numbers. “It misleads us, and our numbers. If there were ten more properties out there at $70,000 each, it would be wonderful. But I doubt it,” he said.
Khaligian reminded the committee that they have no authority over these funds. The Common Council resolution was that they can’t spend on anything except maintenance on properties, demolition, water bills, etc., for current properties. “As I stated earlier,” Khaligian said, “if we identify a property, we would then submit it to the Finance Committee, telling them that we need funding. They, then, need to find the funding.” He stated that he also thinks that a separate authorization would be required to spend the funds.
Subtracting the $10,000 earnest money will leave the committee with $95,000. Everett Butler wanted to know where the remaining $60,000 would come from. “The city owns the property. They can do it, but we can’t. Then, why are we here?” he wanted to know. “We have no authorization to spend money.”
Johnson stated that Alderperson David Bogdala’s resolution basically defunded the Redevelopment Authority. “The capacity, then, of the Redevelopment Authority is in question. There is no authorization, no clear picture. They want deliverables, but we have no resources.” He also stated that Butler’s frustration was understandable.
Marks asked Khaligian to check to see if the $10,000 payment was, indeed, made. He stated that he assumed it was.
Labanowsky stated that he and his partners will prepare a letter of intent. He also udnerstands Butler’s frustration. “The oversight committee is running the show.” Johnson wants Mitchell and Labanowsky to find out if the programs can interact together.
Kennedy had another idea. He asked how many lots the city owned on that block. There are eight. If Labanowsky is willing to sell the city five more, then “we could bundle our eight with his five, and get Requests for Proposals out there, and see if there was a company out there willing to redevelop the properties. This might be a way that we could move this forward. It just might get through the Council.” Labanowsky said that he thought Kennedy’s idea was very clever.
Kennedy said that he stated that the committee needs to continue to look for foreclosures as a strategy. Johnson stated that the price is the issue now. He further stated that he hasn’t seen anything compelling enough tonight to partner with Labanowsky. “Unless creative ways were found to partner with the city,” he stated, “I don’t think that we’ll have any progress.” Marks thanked Labanowsky for attending tonight’s meeting.
Potente then did a quick calculation. Subtracting $60,000 from the $95,000 leaves $35,000. “It will cost $20,000 a year to maintain our current properties. Pretty soon, we’ll be in deficit spending,” he said. Khaligian stated that the committe has no assets. “This is a city problem created by the city.”
Marks asked Khaligian to request at least a minimum of $25,000, $30,000, or even $50,000 for the Capital Improvement Project budget. “The only thing they can do is turn us down,” Marks said. She told him to ask for $225,000 for the funding account. “If the city could buy two of Labanowsky’s properties for $225,000, $125,000 per building,” Marks thought that would be good.
Marks suggested that the committee take a walking tour of Wilson Heights at their next meeting in October to see Labanowsky’s properties. Johnson stated that he could see advantages for the city of Kenosha, too, like eliminating blight, reducing crime, police presence. Labanowsky expressed his desire to see he and his partners do something with the city. Labanowsky again stated that he would prepare a letter of intent “out of respect for all of you.” Labanowsky will show them “the good, the bad, and the ugly.”
Johnson stated that he’s been on this committee for over a year now, and he didn’t appreciate Alderperson Orth knowing about a foreclosure and not informing this committee.