Deal for large-scale demolitions in the works for Evansville

The deal hinges on City Council approving the real offensive against housing blight — a proposed $2 million campaign to demolish nearly 2,000 dilapidated structures in Evansville over the next five years.

The proposed five-year demolition offensive is envisioned by its supporters as the first stage of activity if City Council members next month approve converting the nonprofit Evansville Brownfields Corp. into a land bank. The city’s Department of Metropolitan Development has included the money -- $1 million of which would be earmarked for demolition and the rest for administration, property management and staff — in its 2016 budget request. The $500,000 annually earmarked for traditional raze orders would remain in place, to be deployed against a backlog of about 70 dilapidated houses.

If the land bank funding is approved, chances are good that Brownfields will demolish the 161 dilapidated properties the county would otherwise auction. But the two local governments must work together.

“You have to understand, the city has no power,” said City Councilwoman Stephanie Brinkerhoff-Riley, who has for nearly a year led a working group of city and county officials seeking solutions to blight.

Local housing blight may be located primarily within the city’s urban core, but it is county government that is tasked by state law with disposal of tax-delinquent properties. Consequently, county government stages tax sales and takes title to properties that don’t sell and offers them at auction every year.

“Even though (the 161 blighted, formerly tax-delinquent properties) are located within the city limits and they’re doing perhaps horrible damage to property values and quality of life, we have to buy them from the county — and we have to have the funds to do that,” Brinkerhoff-Riley said.

It will require a tricky sequence of events to fall into place.

The Deal

The Evansville-Vanderburgh County Building Commission, local government’s code enforcement agency, designated the 161 houses as dilapidated enough to warrant demolition during a springtime exterior inspection of nearly 300 structures that did not sell at the county’s 2013 and 2014 tax sales.

As is the case with most houses that fail to find buyers, county attorneys took title to the 2014 houses recently. The county already owned the 2013 properties.

In negotiations involving Brinkerhoff-Riley, Brownfields and Metropolitan Development officials on the city side and County Attorney Joe Harrison Jr., and County Commissioner Bruce Ungethiem on the other, the outlines of a deal have emerged.

County officials have agreed not to offer the 161 dilapidated houses at October’s auction, provided the City Council adopts the Department of Metropolitan Development’s first-year budget of $2 million for the land bank. The council will consider the request during 2016 budget hearings Aug. 17-21.

But that’s not all.

Unwilling to hold the dilapidated properties with the attendant maintenance responsibilities and liability concerns through the winter, county officials want Brownfields to take them off their hands before October’s auction. And they want Brownfields to pay the $400-500-per-property costs of transferring titles to the 161 properties from the county to the nonprofit agency.

Given that Brownfields would not morph into a land bank until 2016 begins, that means coming up sooner than later with the roughly $80,000 needed to pay for the title work. Kelley Coures, the city’s director of metropolitan development, said that’s not a problem. Coures said Brownfields, a separate corporation administered by his department, also may have another $20,000 needed to acquire 41 auction-bound properties that the Building Commission designated as candidates for rehabilitation.

But Brownfields will not front the money, Coures said, unless the City Council approves the land bank’s $2 million first-year budget. That way, the amount paid upfront could be reimbursed after Jan. 1.

Demolition would have to wait a few months, Brinkerhoff-Riley said.

“Obviously, (Brownfields) won’t have the budgeted funds — and probably the weather will be a factor — to actually start demolishing the (161 houses) until early next year,” she said.

County government would not likely contribute more than $100,000 to the new land bank’s budget, Brinkerhoff-Riley said, but she added that there is great value to the county’s cooperation in agreeing not to auction off 161 dilapidated houses. And, after all, the vast majority of local blighted structures are within city limits.

Harrison confirmed the outlines of the deal from the county’s perspective, stressing that the County Commissioners have made no final decisions.

“Hopefully, if the City Council appropriates the funds, I think that’s a benefit for everyone,” the attorney said.

Bottom-dollar Affair

It is not as if the county expected to make a barrel of money at the auction, a bottom-dollar affair at which properties are sometimes sold even with demolition orders attached to them.

Before a house gets to the point of demolition, the Building Commission must persuade a judge in an administrative code enforcement hearing that it is unsafe. County officials acknowledged last year that many of the houses auctioned were blighted, some with squatters lurking about.

The annual auction of properties that didn’t sell at tax sale is intended to get them into the hands of people who will maintain them and pay taxes. But the houses that are vacant and blighted sometimes sell for figures as low as $25 — a practice that can put uninhabitable structures in the hands of people who can’t afford to fix them. About 70 percent of the properties sold at auction are back at auction within three years, according to the Department of Metropolitan Development.

“A lot of those properties that we finally tear down have been auctioned two or three times,” Brinkerhoff-Riley said.

Dreamers aren’t the only ones perpetuating the yearly recirculating of uninhabitable structures. Scavengers buy the houses, strip them of valuable coppers, metals and porcelain and ignore property tax bills. The houses go right back to tax sale after 18 months, only this time in even worse shape.

In an exercise that could help persuade the City Council to appropriate the land bank money and perhaps even more than the current $500,000 for demolitions, the Building Commission and Metropolitan Development Department intends as early as this week to release a report quantifying how much taxpayer money the city spends maintaining vacant and abandoned blighted structures that could not find buyers at last year’s tax sale.

The idea is to put a price tag on police and fire runs and code enforcement at the roughly 400 “no-sale” structures and to evaluate whether it would be more cost-effective to take ownership from the county and demolish them.

“I think people will be surprised when they see how much money is spent perpetuating blighted property,” Coures said.