WASHINGTON, DC - After months of negotiations with Syracuse officials, the U.S. Department of Housing and Urban Development has agreed to keep nine Syracuse apartment buildings out of the hands of private developers. Instead, HUD will auction the properties only to nonprofit housing corporations with a specialty in preserving affordable housing. The agency will auction the buildings as one package Dec. 3 at the Onondaga County Courthouse, HUD officials said Wednesday. "We've gone as far as we can, legally," said Jerry Brown, a HUD spokesman in Washington. "We're putting on the table one of the best deals we've been able to offer."
The deal allows for one building, at 407 Stolp Ave, to be demolished, which is what neighbors and the city had wanted. It also sets income limits for residents of the redeveloped units. Whoever buys the package will have the option of redeveloping all nine buildings or selling some to other developers, which will allow for the city's plan to break up the properties among several developers.
The city has an interested bidder in the nonprofit National Housing Trust-Enterprise Preservation Corp., city officials said. The nine buildings owned by ElJay Redevelopment and managed by Longley Jones had provided 274 units of affordable housing for low-income residents. HUD initiated foreclosure on the properties last year due to failed inspections and late mortgage payments. The department tried to auction the property package to the highest bidder in April, but no bidders came forward.
Mayor Matt Driscoll and other officials have been working with HUD since April to avoid another general auction. Driscoll said his goal was to prevent an unqualified landlord from buying the properties, which require about $16 million in repairs. The agreement with HUD will disqualify the slumlord bidders that Driscoll feared. Driscoll in June pitched a plan to split the properties among several developers. The city still is working on the details with interested developers and state housing agencies.
Working out a plan for the properties will be complicated, said city Economic Development Director David Michel, but the HUD deal offers hope for the mayor's plan. "They did give us 90 days, plus 90 days to close after that," Michel said. "That gives an organization time to get the state funding or tax credit allocations they'll need to make a project viable."
National Housing Trust-Enterprise Preservation Corp., the nonprofit interested in developing some of the apartment buildings, recently initiated a study to determine marketability of the buildings' units and rental rates. The Syracuse Industrial Development Agency board agreed to split the $14,000 cost of that study with the nonprofit. The study was completed Wednesday and offers some positive information about the potential demand for the units, Michel said.
The deal with HUD comes after months of debate among the city, HUD and other officials. Sens. Charles Schumer and Hillary Rodham Clinton and Rep. James Walsh jumped into the issue, working to delay another general auction and to broker a deal between the city and HUD.
All three officials said Wednesday that they were pleased with the agreement. "This announcement is welcome news for the city of Syracuse and a victory for a community that has worked hard to revitalize their housing market," Clinton said in a written statement. HUD will pay for a legal advertisement in the next few days, alerting potential bidders to the auction, Brown said. Agency officials will review the highest bidder's track record before awarding the package.
Some tenants have chosen to remain in the properties, despite the foreclosure and the offer of relocation assistance from HUD. Current tenants with very low incomes will receive two years of rent protection at 30 percent of their monthly income, according to the deal.
Source: Syracuse.com