Hill Development On Life Support

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by Thomas MacMillan | Mar 16, 2010 11:00 am

(8) Comments | Commenting has been closed | E-mail the Author

Posted to: Housing, The Hill

Thomas MacMIllan Photo As the Hill Development Corporation struggles to stay afloat, the city is stepping in to buy back six crumbling houses the community development organization has failed to renovate.

Hill Development (HDC) has been an institution in the Hill neighborhood for decades. The not-for-profit organization has a history of acquiring homes and fixing them up. But recently HDC has suffered from dried-up funding and entanglement in costly litigation.

With no money left to pay salaries, the agency fired its director and half its staff last fall. HDC has shut down its property acquisition department and locked up its Howard Avenue offices.

Nearly lost in the shuffle are six abandoned houses in the Hill. HDC bought the homes from the city in 2004, intending to fix them up and turn them over to new homeowners. Then grant money fell through and a lawsuit with a contractor drained resources. The renovations never happened.

With the properties in foreclosure, the city is negotiating with Citizens Bank to buy the houses back from HDC for a fraction of the debt owed on them. New Haven’s Livable City Initiative aims to rehabilitate the properties for new tenants. Two of the buildings are in such bad shape that they will have to be demolished.

The Board of Aldermen voted unanimously on Tuesday night to approve the purchase of the six houses.

In 2004, HDC acquired 11 properties from the city. Five of them were renovated and sold. Due to a combination of market, organizational, and legal problems, the remaining six were left incomplete and have fallen into neglect. HDC eventually defaulted on the six properties with the mortgage lender, Citizens Bank.

Now the LCI has stepped in to bail out HDC. LCI’s Cathy Schroeter said last week that the department was nearing an agreement with Citizens Bank to buy back the mortgages.

HDC has been unable to develop the six Hill properties in foreclosure due to a lack of funding, said Fair Haven Alderman Joey Rodriguez, an HDC staffer. The project’s financial troubles are partly due to drawn out litigation with the renovation contractor, he said.

“Several years ago, the developer took HDC to court,” Rodriguez said. “He tried to do 50 percent of the work and take 100 percent of the money and walk away.”

The litigation was just a one of a number of financial setbacks that have beset HDC in recent months. Hill Alderman Jorge Perez, who sits on the HDC board, said the recession has hit the agency hard, he said. “There was a series of grants that we didn’t get.”

The organization was forced to lay off the director and “most of the staff” several months ago, Perez said. The agency is now trying to figure out how to carry on, he said.

Rodriguez said HDC’s Howard Avenue office has been closed for months, with a padlock on the door. The organization’s property management offices on Davenport Avenue remain open, he said. “The management component of Hill Development Corporation is thriving,” he insisted. The corporation manages 65 affordable housing units, he said.

Abe Colon, spokesman for the HDC board of directors, offered a different appraisal of the organization. “There’s not much going on,” he said. After grants didn’t come in, HDC was forced to shut down most of its operations, he said.

Now the board is trying to regroup, he said. “We’re trying to work through this and see what the future holds,” he said. “Times are really tough.”

HDC is not ready to throw in the towel yet, Colon said. “By no means do we intend to leave or close up shop.”

Colon expressed support of LCI’s efforts to pick up the six unfinished homes. It’s good that the city will be stepping in to develop the abandoned buildings, he said. “The last thing we want to do is to create more blight.”

“The board is currently meeting and trying to prepare some contingency plans,” Colon said. HDC will continue to seek federal, state, and city grants, he said. It’s a “very, very difficult time” to be trying to do development work, he said.

HDC may have to sell more properties if it can’t afford to maintain them, Colon said.

Comments

posted by: Jonathan Hopkins on March 16, 2010 11:51am

Well, that’s not good.

If only the Federal government had funded individuals more than contracting new housing after WW2, we wouldn’t have these situations. Canada, for example, following the War, provided subsidies to individuals to fix up their houses and add additions to their houses to make them more livable. The US, instead decided to publicly fund a massive suburban housing project that continues to this day. Instead of providing money to individuals to privately hire home buildings for repairs and additions, we decided to abandon our city neighborhoods in favor of sprawling housing tracts of aluminum sided sheds that required entirely new infrastructure at enormous cost, that today, is bankrupting our country by trying to pay for all this unnecessary and inefficient suburban accessories. If we had instead allowed people to fix up their homes in city neighborhoods, there would be hardly any demand for large highways that cut through the city and this ridiculous commuting system we accept as normal behavior. Sure, some new housing was needed, but not at the expense our existing neighborhoods. Much of the worst housing stock was demolished, some was refurbished, but a bulk of it was left untouched, and that was the housing that black migrants and Puerto Rican immigrants were moving into in the second half of the 20th century. That housing stock had been rotting since the beginning of the great depression.
Organizations like HDC, HHSNH and LCI really have their work cut out for them, because much of the housing in working class neighborhoods was never properly restored or refitted with up-to-date systems because the money just was not made available to do the types of renovations that are necessary in housing of this quality, which usually is an architecture and construction of extremely high quality that has unfortunately not been maintained as it should have been over the years.

The publicly funded suburban housing project is the biggest oopsey doopsey ever.

posted by: that suck on March 16, 2010 12:42pm

Well this truely sucks.

HDC has done great work in the hill. i hope the board can turn things around.

posted by: jdavis on March 16, 2010 2:40pm

nice photos!

Isn’t there a show called “flip this house new haven” that’s on A&E? Call those dudes up and give them a good deal. Could make for some good TV!

posted by: M on March 16, 2010 3:09pm

Man I grew up in that house to the far left It’s tough to see it in that condition.

posted by: Long time resident on March 16, 2010 3:40pm

Do I smell a strong whiff of incompetence here? Aren’t most community development corporations able to sustain themselves with development activity instead of waiting around for grants? Don’t tell me, I bet it’s the Federal grants that used to come in like clockwork that they were waiting on and were “shocked” when they didn’t get them?

posted by: Fred Johnson on March 16, 2010 9:10pm

Here is the Rub: Substantial renovation costs will always exceed the percentage of area median income maximum available to buy the renovated property; who kicks in the difference? How is necessary routine normal property maintenance going to occur when the new owner is already paying all that he can afford. How can initial renovation costs be kept down with all kinds of new “green” requirements and changing building codes and technology keep driving construction costs up?” The term “affordable” housing has never been defined in terms of “affordable to whom and at what cost to someone else”, so the game will continue as long as there is someone without a voice to be taxed.

posted by: WOW on March 17, 2010 9:59am

Wow, it finally happened. HDC CLOSED! There’s a since of sympathy that is driving the story that I feel is bogus! HDC doesn’t need sympathy, the residents of the Hill needed a warrior and have been tremendously failed. The recession is not the reason HDC closed. It was poor management. There have been many clients that have been greatly served by HDC and the programs that it gives but there are many untold stories that drained many clients trying to work with HDC. I know I was one of them. I bought a house and after the closing, I was a nobody! There is a sense of incompetency here within the higher staff. I challenge the Independent to find out the real story of why HDC closed. And why is an alderman is still working for a CDBG funded program. (Do I smell conflict?) LCI you are great for taking over the blight, but I hope its not from guilt of providing poor management to other projects and allowing some of these clients to live in inadequate “affordable” housing! With a board so powerful and influential (check the roster) at HDC’s how does a so-called “recession” wipe out years of great work. Good luck to the residents of the Hill. You were terribly let down!

posted by: WOW on March 17, 2010 11:44am

Just thought about something…if HDC has been closed since the Fall of 2009 why are we just hearing about it in the Spring of 2010? Courtland Wilson must be turning!!!! His legacy shouldn’t close for lack of money!

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