'Fix or flatten' properties not guaranteed to recoup costs

The city handles about a dozen properties a year through the "fix or flatten" program. (H-W Photo/Phil Carlson)
Posted: Nov. 24, 2012 5:37 pm Updated: Dec. 8, 2012 7:15 pm

Herald-Whig Staff Writer

The city of Quincy has received less through the sale of some properties than it spent to obtain them through the "fix or flatten" program, but officials still believe the program is beneficial in the long run.

The Finance Committee recommended last month that the city sell 1000 and 1002 Chestnut for $4,500 each and 1008 Chestnut for $1,600 to Blessing Hospital. It also recommended selling 905 N. 10th to Matthew Lehner for $1,525.

The prices were substantially below what the city had invested.

The city spent $21,443 in legal, demolition and cleanup costs for the three Chestnut properties, and $12,500 to fix up 905 N. 10th, including a new roof. Lehner plans to develop that property into a rental unit.

Chuck Bevelheimer, the director of planning and development, said the city must weigh the costs of stabilizing a building versus tearing it down.

"We felt that the amount of cost on this case was not exceeding the value of keeping that house and trying to maintain the neighborhood," he said. "It's looking at the restoration and stability of the neighborhood, not just this one single home."

Alderman Steve Duesterhaus, D-2, said it is a concern when the city loses money on a property, but the city is not in the business of banking properties.

"Our consideration is we need to stabilize the neighborhoods," he said. "We need to stabilize those that are viable, because they are better for us in the long run than a vacant lot that has to be maintained."

Duesterhaus said the program helps keep neighborhoods intact and puts properties back on tax rolls.

"The price is discounted, but we've been fortunate that we've had some responsible owners get a hold of these properties, rehab them and get them back on the tax rolls," he said "Ultimately, that is for our benefit."

Bevelheimer said often times when the city obtain properties through the "fix or flatten" program -- used as a tool to deal with nuisance properties -- they are too far deteriorated to save.

"We don't have much choice, and in that case we're in the position of tearing it down," he said. "And we typically spend $5,000 to $10,000 to tear the structure down."

In some city neighborhoods, when homes are demolished, new homes are difficult to build because lots are narrow. Properties, in some cases, are sold to a neighboring property owner to increase the size of their property.

"I'm not going to be necessarily opposed to that," Bevelheimer said. "Sometimes that may be the best use of the property, because the houses are a couple of houses apart, and adding an extra 25 feet definitely makes a difference."

The city handles about a dozen properties a year through the "fix or flatten" program. It has a budget of about $90,000.

In October, the City Council approved a resolution to deal with 13 problematic properties. While the city spends tens of thousands each year on nuisance abatement through the program, properties sold brought in $11,597 in the 2011 fiscal year and around $15,000 in the 2012 fiscal year.

"If you don't try and manage these derelict properties, then you end up with blight in your neighborhood," Bevelheimer said.

The city usually handles about half the properties in the program, while the other half are covered by another party, such as a bank. The city advertises the properties it obtains and receives sealed bids from interested buyers.

Aldermen on the city's Finance Committee tend to question when the city gets a low return on properties, but still approve selling the properties.

Alderman Mike Farha, R-4, is concerned the city is losing money.

"This is a clear one where we made a huge investment (on Chestnut) and a nonprofit entity has bought it," he said. "Whether it goes back on the tax rolls or not is questionable."

Farha said when city gets what it puts in, he is supportive. However, he has seen more properties being sold for much less than what the city has invested.

"Increasingly in this environment, we're not getting our money out of it," he said. "We tear the property down. We're in there $5,000 or $6,000, and we sometimes get $1,500."

Farha stopped short of saying whether the program should be completely revamped.

"We need to look long and hard at it," he said. "I don't know what the easy answer is. We've got properties in our ward where they are very problematic."