Sale OK’d, With Tighter Deadline

Markeshia Ricks PhotoA private buyer got a step closer to transforming a blighted two-family home in the Hill into affordable housing, after an extended debate that ended with a tighter rehab deadline and a vow to demand more from people who buy property from the city.

After about eight months of deliberation, the Livable City Initiative’s Board of Directors Wednesday unanimously approved a plan to sell the long-vacant house at 59 Elliott St. for $10,000, during its special meeting at City Hall. (Read about those previous deliberations here, here and here.)

The board made that decision after receiving evidence that the would-be developer has the funds to do the extensive rehab of the house. The board also obtained a commitment from city anti-blight officials that the ensuing land disposition agreement, or LDA, will require that the units be affordable housing and that construction be completed within 12 months of the start of construction on the property instead of the standard 18 months.

The approval comes after months of directors raising concerns about the deal. Chief among those concerns was that the developer lacked experience and might not have the capacity to complete the work; that directors weren’t privy to the developer’s source of funding to complete the rehab; and that the offer price was low compared to the property’s appraised value.

The developer, city schools official Gemma Lumpkin, wasn’t at Wednesday’s meeting. But LCI Executive Director Serena Neal-Sanjurjo assured the board that Lumpkin had provided documentation showing that she has access to $48,000 in cash and to up to another $100,000 in conditional funding to acquire the property and cover the rehabilitation cost. Lumpkin has estimated that the cost to overhaul the property and make it ready for tenants is about $60,000. 

Neal-Sanjurjo said the final LDA, which would still have to be approved by the Board of Alders, will stipulate that the property is developed as affordable housing and within a timeline dictated by the city.

Carly Wanna PhotoLCI Board Chair Tim Yolen, who had pushed LCI over the months of deliberation to be more thorough at addressing the board’s concerns and making sure that future LDAs are legally more binding, still expressed concerns that the board won’t see all the particulars of the agreement before it is signed. He pushed LCI officials at Wednesday evening’s meeting to continue to make that process more transparent.

Neal-Sanjurjo said in the past LDAs were simply submitted to the board with little fanfare. She said she welcomes the board’s efforts to scrutinize the deals more closely. She noted that all LDAs are now written with strict provisions that outline the city’s expectations for projects, including timelines for completion and conditions for which the city can take back the property should the agreement be breached.

“I know that we’re doing things differently and I’m glad of that,” she said. “We’re changing the way we do business.”

Director Seth Poole reminded Neal-Sanjurjo that his original heartburn with the deal had been the low proposed selling price of $10,000. The appraised value of the property is $108,000. Given the fact that the developer getting the property at such a low cost, he asked why the city would provide a generous 18-month construction time frame. He noted that the desire is to get the blighted property back on the tax rolls as quickly as possible. Why not make the timeline for four or six months? he asked.

Neal-Sanjurjo said six months would be aggressive, but she said 12 months wouldn’t be unreasonable. Ultimately, directors voted to allow the purchase price to stand at $10,000 but shortened the timeline for completing the project to 12 months.

Yolen said after the meeting that in the past LDAs had generously favored those who purchased blighted properties rather than the best interest of the city. He said he doesn’t want to see properties languish for years. If the city’s going to sell a property at such a steep discount it has to hold people accountable for getting construction done in the timeliest manner possible, he said. (Read here about the city’s plan to renegotiate defunct LDAs.)

“If you’re going to get a very good deal. you have to get the work done,” he said.

Contacted after the meeting, Lumpkin said she’s ready to get to work and glad to have finally cleared this hurdle.

“I love New Haven and am very excited to be part of the solution,” she stated in a text message. “Affordable housing is a basic need that impacts our families and our children. I look forward to playing a part in addressing this need.”

She added that as a single mother raising two children in the city, she sees cleaning up the house and renting it as a way to help another family like hers have a safe and affordable place to live.

“That’s really the underpinning of all of this,” she said.

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posted by: Patricia Kane on February 7, 2019  5:08pm

Thank you, Tim Yolen, for pushing for full transparency.
  It should not be such a struggle.

posted by: Kevin McCarthy on February 7, 2019  6:51pm

It appears that the city is giving Ms. Lumpkin a windfall of several tens of thousands of dollars. Let’s assume that the appraisal is significantly high and that it will take an investment of $60,000 to make the building habitable, as Lumpkin estimates. This amount, plus the $10,000 she is paying, is still $38,000 below the appraised value.

I have no reason to believe that Ms. Lumpkin received preferential treatment as a result of her position. But a cleaner approach would be to allow potential buyers to inspect city-owned properties and then conduct an auction. Given the city’s (justified) concern about affordabilty, it could require the winning bidder to enter into a covenant, enforceable by the city, to ensure affordability over the long-term.

posted by: yalegrad on February 8, 2019  1:18pm

Maybe the city can publicize the process for selling off these properties? I have never seen a website or link that shows all the properties that being auctioned off.

Then maybe someone who is not a sorority sister or some other connection can actually pay a Fair Value for a house so the city can waste the money somewhere else.

posted by: 1644 on February 8, 2019  2:07pm

So, why not just sell to the highest bidder?  This deal, transparent or not, reaks of corruption and inside dealing.

posted by: THREEFIFTHS on February 8, 2019  3:57pm

posted by: yalegrad on February 8, 2019 1:18pm

Maybe the city can publicize the process for selling off these properties? I have never seen a website or link that shows all the properties that being auctioned off.

Correct.In fact back in the 70’s In New York.They put out a Catalog of the properties that were being auctioned off.You then went to One Police Plaza were they did the Auction Sales Of City Houses.This was how people got some of those Brownstones for One Dollar.

Mixed Record Emerges From Auction Sales Of City Houses

AT 9 A.M. on Sept. 22 an auctioneer will bang his gavel in the auditorium of 1 Police Plaza in Manhattan and start the 38th auction of city-owned houses and small apartment buildings.

Until recently, little was known about the auction buyers and how they fared with their purchases. But profiles have begun to emerge as a result of a new city program that, in conjunction with the Dime Savings Bank of New York, provides subsidized loans for renovating building shells.

It turns out, for example, that almost half the renovators in the loan program have been households headed by single black women. ‘‘The women are doing very well - better than the men,’’ said Peter G. Florey, who administers the Dime’s program. The second-largest group of borrowers were Hispanic families, and the smallest group were three white households - two couples and a single woman.

Buyer: Amadeo Flores, a truck driver; his wife, Claribel, and four young daughters.

Property: 1208-A Greene Avenue, Bushwick, Brooklyn.

Type: Two-family, three-story brick and frame house.

Winning bid: $9,000.

Condition: wrecked, garbage-strewn interior.

Renovation costs: $60,000 estimated.

Cash investment: About $20,000.

City subsidies: 7.5 percent rate on $6,750 purchase loan; $4,048 grant on a $45,000 rehab loan.

From auction to move-in: Three years.

posted by: AMDC on February 10, 2019  7:43am

What does NH get out of the deal,  other than the obvious “affordable” housing??? I applaud those who are asking for 100% transparency on any issue that involves the taxpayers’ funding of these hand-picked buyers.  I have attended public auctions and can testify that the deals were done way ahead of time and the public display was for show only.  The insiders got wind of the deals long before the rest of us could know of them.
People are asking for more oversight of these gifties to investors down the road.  While regs exist on paper (we call them LAWS and Housing/Building/Zoning/ Health codes),  they are often not followed or enforced.  This is what makes people lose heart and become angry and cynical toward the public sector.  Everybody:  DO YOUR JOBS AND THE TAXPAYERS WILL BE HAPPY!

posted by: Seth Poole on February 12, 2019  11:29am

Greetings,

This particular sale was of a property that has been vacant for more than a decade (from its appearance). I had the displeasure of walking through it.  It was sought out by Ms. Lumpkin, and she went through the proper channels to secure it.

All citizens have the right and opportunity to investigate blighted properties in their neighborhoods for purchase.  Attending Neighborhood Management team Meetings is a great place to start. The NHI is an open forum of transparency, just as are the city departments like the Livable Cities Initiative (which provides reports at every Neighborhood Management Team meeting).  People looking to invest in our city need only seek out opportunities.

I would like to wish Ms. Lumpkin all of the best, and challenge other community members to step up to the plate to provide affordable rents for families.

posted by: Kevin McCarthy on February 13, 2019  9:11am

Seth, I trust Ms. Lumpkin went through proper channels and also wish her all the best. But this is a problematic process. I’ve served as chair or vice-chair of my management team and its predecessor organization for 20 years. At no time has our LCI rep (who is quite conscientious) or her predecessors notified the team of available city-owned properties. These properties are at least potentially assets, but the city does little if anything to market them.

posted by: Seth Poole on February 13, 2019  9:20am

Kevin McCarthy, I too have served as the Chair of my management team for several years, and yes, you are correct in your assessment that the LCI representative does not share listings of city-owned properties.  The truth of the matter is that there are very few city owned properties with buildings on them.  I am sure you are aware of the mass-demolition of nearly 1000 properties during the previous administration.  These city-owned lots will be made public.  As Mrs. Neal-Sanjurjo stated, LCI is changing the way business is done in New Haven. 

Thank you, and I will share your input with the board.

posted by: Patricia Kane on February 13, 2019  12:54pm

The City maintains a website. How hard would it be to list either a link to all properties in the portfolio or to list them with their assessed values and zoning info?
  Where there is no transparency, conspiracy theories thrive.