Monday, April 23, 2012
The auction, which will take place on June 9 during the 2012 Ohio Realists Association Statewide Conference at the National Underground Railroad Freedom Center, includes four single-family properties and two vacant, buildable lots at 838, 842, 844, 850, 854 and 856 Lincoln Avenue.
The City acquired 12 units within the single-family development from Living Innovations in 1985, granting them to a private developer in 1990.
Five parcels were sold to individuals, with the additional parcels reverting back to City control following the developers' bankruptcy. Between 2005 and 2007, the City contracted for nearly $856,000 in work to stabilize and rehabilitate the four single-family houses.
Since then, the City has tried unsuccessfully to sell the properties, with the inability for prospective owners to obtain bank financing and prohibitively high rehabilitation costs making them a hard sell. Estimated rehabilitation costs are $360,000 apiece for 842 and 844 Lincoln Avenue; $120,000 for 838 Lincoln Avenue; and between $35,000 and $50,000 for 850 Lincoln Avenue.
The City hopes that the auction will rid it of high maintenance and holding costs and jumpstart the redevelopment. The City has invested nearly $3 million in the project so far, and spends between $10,000 and $15,000 on maintenance annually.
The properties will be sold at auction for the highest bid, plus 10 percent. As a condition of each sale, covenants will require that each property be conveyed solely for rehabilitation or new construction, a certificate of occupancy must be issued for all work within 12 months of execution of the deed, and the property must remain owner-occupied for five years following the issuance of a certificate of title.
Demolition will not be allowed, and all rehabilitation or new construction must conform to guidelines of the local Lincoln-Melrose Historic District.
Residents of Walnut Woods voiced their opposition to the auction, saying that the auctioned properties would lessen the value of their homes. And they still feel burned that they didn't get the gated community with private garages that they believe they were promised.
Instead, they would prefer that the City either complete the rehabs or offer gap financing incentives to bridge the divide between what the houses are worth and fair market value. Estimates to restore the houses to functional use range from between $120 and $200 per square foot.
But Michael Cervay, director of the Department of Community Development (DCD), said in an April 13 memo to City Council that the residents' idea to have the City perform the rehabs and then sell them to private owners was just not feasible.
"DCD, based on past direction, understood that Council wished to pursue less costly alternatives," he said. "If Council wishes to appropriate the funds necessary to complete the development on its own, DCD will execute that alternative plan."
Cervay said that Council instead directed his department to explore the possibility of an auction, and that the chance to highlight the City during the high-profile convention made the idea even more attractive.
"The auction will put the properties into the hands of private owners for renovation — the original intent of the Walnut Woods project," he said. "The improvement of these properties and eventual occupancy by new owners will improve the neighborhood and ultimately increase all property values."
A motion introduced on Tuesday to identify funds for parking lot renovations, fencing, common lighting and internal sidewalks – contingent on the creation of a homeowners' association that would provide for future maintenance – has yet to be voted upon.
Those improvements could cost $300,000, Cervay said.
Councilmembers P.G. Sittenfeld, Christopher Smitherman, and Charlie Winburn voted against the auction ordinance. Councilmember Laure Quinlivan was absent.
Previous reading on BC:
Cincinnati may auction Walnut Woods (3/15/12)
Cincinnati will sell Walnut Woods house for $143K (11/3/09)
To boost homeownership, Cincinnati may sell Walnut Hills house for less (10/6/09)
Posted by Kevin LeMaster at 3:00 PM