November 7, 2014 [Andrew Cass, The News-Herald]
“What we do today is not the end of the process, it’s really the beginning,” said Cuyahoga County Councilman Pernel Jones, shortly before council members voted to approve a plan to make $50 million available for demolition projects in the county.
“We are putting our money where our mouth is,” he said, calling the county the nation’s foreclosure capital. “We should not let this opportunity pass to take the first step.”
Jones asked for full support from council on the program, and after months of debate and despite differences of opinion and philosophy, the council members unanimously approved the plan.
Shrinking the gap
Nate Kelly, Cuyahoga County’s deputy chief of staff of development, previously told The News-Herald that there are about 12,000 vacant and distressed properties in the county.
The $50 million plan will not remove all the blighted properties in the county. Jones said Oct. 28 estimates could be up to $300 million for total removal.
County Research and Policy Analyst Kahlil Seren said in September with “a swift, impactful push on demolitions, we may be able to shrink the gap.”
Blighted properties, Kelly said, affect property values and discourage reinvestment in the community. Nuisance properties also come with crime and other health and safety concerns. The outer-ring suburb Richmond Heights, for example, has seen an increase in break-ins this year, mostly in vacant homes, where copper pipes have been stolen.
The plan passed by County Council in October had been discussed for months, with several tweaks and amendments made along the way.
In the months leading up to the passage, county council members debated among themselves the past course of action of how to distribute the $50 million. They also heard from leaders throughout the county, ranging from mayors to city council members to housing directors.
Of the $50 million, $41 million will be available to municipalities in the county through a noncompetitive bid process. The other $9 million in funding will go to the Cuyahoga County Land Bank through three one-time allocations.
The funding will be available to the municipalities in rounds. In the first round, municipalities can apply for up $1 million for projects, with no more than $100,000 being awarded for any individual structure.
Municipalities can apply for a subsequent round of funding only after taking “all legal actions necessary to enable demolition” of at least 80 percent of the structures approved for demolition.
The maximum amount allocated per applicant may change in subsequent rounds, but will not exceed $2 million.
In order to receive funding, the municipalities will have to meet the following qualifications:
• Sufficiently identifying a “target area, neighborhood typological priorities, or spot demolition site(s) containing a demonstrable need for demolition.”
• Whether the “structures identified by the applicant for demolition have been certified as vacant, abandoned, and nuisance or blighted.”
• Whether the applicant has “sufficient capacity to administer the demolition, or intends to engage an agent such as the Land Bank to administer demolition on its behalf.”
• Whether the actions proposed in the application are “designed to assist in carrying out a plan developed by the applicant to improve housing quality or strengthen the housing market in the applicant’s municipality.”
The municipalities also will need to commit to take all legal action necessary to enable demolition and abide by minimum demolition and property maintenance standards established by the Department of Development. They also will have to commit to place a lien on all properties where the demolitions will occur, except for properties owned by the municipality or the Land Bank. The municipalities also must commit to competitively bid all demolition contracts and refrain from any action that may adversely affect the tax-exempt status of any bonds issued by the county to fund the property demolition program.
The funds will be available in either grants or zero-interest loans, through an amendment made by Councilman Dave Greenspan. Applicants who choose the zero-interest loan will be eligible to receive a grant equal to 50 percent of the principal amount of the original loan after the loan is paid off.
Greenspan said he does not expect to see cities take advantage of the loan option until almost all of the $50 million is used, however.
“Because then at that point they’ll have realized they have a greater need and there’s money available and they would opt to exercise a loan option to receive a grant that helps to supplement their operations and activities as it relates to this issue,” he said.
Unlike the municipalities, the Land Bank will not need to submit applications to receive its three $3 million allocations. The individual demolition projects funded through this allocation will be subject to the approval of the Land Bank’s director of development. The Land Bank will start receiving its funding in 2015.
‘Smaller need, no less important’
All of the municipalities will have the opportunity to apply for the maximum of $1 million in the first round of funding, despite requests from representatives from Cleveland that some of the inner-ring suburbs to receive a larger cut of the money.
In September, Councilwoman Sunny Simon said the county isn’t in a position to score each individual community’s needs. A certain home, she said, might be “cataclysmically bad” to a small community, but not as bad for another community.
“A small amount of demos could go a long way in South Euclid or Euclid or even Westlake or Strongsville if there’s a bad area that needs to be enhanced,” she said. “I don’t think we can score this the way we do otherwise.”
Kelly agrees, calling it a “strategic use” of the funds. He said a community with a smaller need does not mean its need is no less important. A community like Shaker Heights, he said, may have a need for demolition as well. The demolition of a few properties there could have a “tremendous impact” on the city.
“It’s going to take more properties in Cleveland to make the same kind of impact,” he said.
Kelly said Cleveland and the communities in the Broadway Corridor have the greatest need and he expects a lot of applications and execution of projects in those areas.
The communities with greater need will have future rounds to apply for, something communities with smaller problems might not need.
After doing a final review of the passed legislation, Kelly said there will be a meeting Nov. 12 with all 59 municipalities in the county to discuss the plan.
At that time, the communities will have the opportunity to give any additional feedback on the application and process before the applications go out.
The hope, Kelly said, is to have the applications sent out before the end of the year, but he is unsure when the funds will be distributed. He said it depends on how quickly the communities make their requests, but adds they are eager to get the program started.
Area representatives said they plan on attending to get a better understanding of how the funding process will work as well as what they can and can’t do with the funds.
“We’ll certainly do what we can to be included in those funds,” said Christel Best, economic development director for Richmond Heights.
Richmond Heights approved an agreement over the summer to work with the Land Bank. The Land Bank is helping the city with the remediation of a vacant gas station at 26102 Chardon Road.
The city identified five nuisance properties and Best said they have a few others on a watch list. The city is still unsure of whether demolition or rehab is the best course of action on those properties.
“It’s a question of what makes the most sense,” she said.
Euclid Director of Planning & Development Jonathan Holody, who attended some of the council meetings where the demolition plan was discussed, said the city has started to look into which properties it will apply to demolish. He said he could not give specifics, but the city is looking to have both residential and commercial properties demolished through the program.
“The program council passed has a good amount of flexibility, which is a good thing,” Holody said. “As a new program, there’s going to be details that need working out,” Holody said. “We’re looking forward to working with them to understand and take advantage the best we can.