Eyesore properties are among the most common complaints in Canton neighborhoods. City officials expect to receive more than $1 million in grant funding for demolitions. The administration intends to issue a bond to provide the matching dollars.
The city has nearly 500 eyesore houses on its demolition list. And it may be getting enough money to knock all of them down.
The city has been awarded $1 million from the Moving Ohio Forward Demolition Grant Program to raze blighted properties through the Stark County Land Reutilization Corp. The city has to match the $1 million.
To do so, the city administration plans to ask City Council to authorize the issuance of a bond for up to $6.5 million to cover both the city’s share of demolition costs — which may exceed $1 million — and to provide funding for downtown economic development projects that have not been publicly identified yet by the administration.
The bond plans have yet to be introduced as legislation.
The city has 485 properties on the demolition list — the vast majority of them houses. Some of the structures could come off the list if code violations are addressed after a 30-day demolition notice has been sent to the owner. The demolition also can be appealed to the Board of Building Appeals and then to Stark County Common Pleas Court.
Gary Baker, senior code officer for the city building department, said it costs about $5,000 to demolish a house. Asbestos removal can drive the cost higher in order to meet state environmental requirements.
So, at that rate, it would cost $2.5 million to raze 500 houses.
“Whatever the final number ends up being we’ll put a big, big dent in what we presently have on our demo list,” Safety Director Thomas Ream said.
The Stark County Land Reutilization Corp. received $2.3 million as part of Ohio’s share of a federal-state settlement agreement reached last year with the nation’s five largest mortgage companies over foreclosure abuses and fraud and unacceptable mortgage practices.
The attorney general’s office has been overseeing a $75 million grant for Ohio counties to be used for the demolition of blighted or abandoned residential structures.
The city of Alliance will receive $75,000, said Alexander Zumbar, Stark County treasurer and chairman of the Stark County Land Reutilization Corp.
Plain Township has requested $100,000, and Pike Township has applied for $500, he said. The Land Reutilization Corp. is required to hire a consultant to administer Stark County’s share of the state’s demolition program. The group can spend up to roughly $100,000 to hire a consultant, Zumbar said.
Before the local grant funding expires at the end of 2013, Canton could wind up with more than $1 million from the account, he said.
Of the $2.3 million grant overseen by the Land Reutilization Corp., $500,000 can be awarded without matching funds. The group’s board is reserving that amount for hardship cases of blighted houses in the county, Zumbar said.
Page 2 of 2 - VACANT LOTS
The Land Reutilization Corp.’s five-member board is in the process of establishing a side lot program, which is designed to get vacant properties “in the hands of neighbors or interested persons” to expand a residential lot, create a community garden, maintain green space and other possible uses, including to construct a garage.
The plan is still being refined, but under the concept, a vacant lot could be acquired at a minimal cost — including the recording fee — and possibly sold for $1. Delinquent taxes and liens would be removed.
Land also could be acquired by the city and potentially used for development projects. Other possible uses include drainage. New housing also could be constructed, but it would require combining parcels in the city of Canton to meet lot-size regulations.
The Land Reutilization Corp. board is considering making the vacant lots “deeds in escrow,” Zumbar said. The properties also would be monitored to make sure they are maintained and do not become nuisances again, he said. Property taxes also would have to be paid on the lot.
To access the demolition funding, the city must come up with matching funds. The match cannot come from Community Development Block Grant Program dollars — awarded by the U.S. Department of Housing and Urban Development.
In a letter to City Council late last year, Warren Price, the city’s service director and chief of staff for Mayor William J. Healy II, said the administration plans to ask City Council for authorization to issue up to $6.5 million in bond anticipation notes — also known as manuscript debt — to provide matching funds for the demolition grant as well as “to provide gap financing to several downtown economic development projects.”
With manuscript debt, Price said, the city would borrow against its own treasury to make funding available. The city would pay interest as if that money is invested, he said.
“We have determined that that’s the most cost effective (and) quickest way to have cash flow availability for these demolitions,” he told council.
The administration also has been exploring bond options, including publicly placing long-term debt on the investment market, Price said.
Price said last week that he cannot identify the proposed economic development projects yet, “although we are on the cusp of being able to do that.”
When the legislation is drafted, the city must be more specific on the economic development reasons for the bond, said Law Director Joseph Martuccio.
The specifics of the bond still have to be worked out, Price said. Martuccio said the subject is being researched by the city’s legal bond counsel.