Evanston has some federal housing money that’s at risk of being taken back if the city doesn’t find something to spend it on by the end of the month.
So aldermen tonight will be asked to spend the HOME program funds on the three-unit apartment building pictured here, located at 1509 Emerson St.
Here’s how the deal stacks up.
The building, which the county assessor lists as having a current market value of $378,250, was bought by Brinshore, the city’s partner in its $18 million federal Neighborhood Stabilization Program grant, from Fannie Mae, the government-sponsored entity that facilitates mortgage loans, for $96,000 early this year.
Based on county recorder of deeds records, it appears that the previous private owners of the building, heirs of a woman who had owned it for decades, lost it in December 2010 after having fallen behind on mortgage payments at least two years earlier.
The records indicate that the long-time owner of the building had taken out two mortgages totalling $711,000 on the property in July 2004, back when the housing market was heating up.
According to a memo prepared for the aldermen, the city now plans to spend a total of $823,000 — including the acquisition cost — to rehabilitate the 3,984 square foot building, which will end up being owned and managed by Brinshore.
The plan is that after all the rehab work, two of the three-bedroom units will be rented at subsidized rates to low income families while the third is rented at market rate.
The projected rent rates are $725, $890 and $1,100 a month.
With $250,000 of the funds now coming from the HOME program and the rest from the NSP2 grant, the city staff says more of the NSP2 money can be spent on other projects designed to repair damage done by the boom and bust of the housing market.
Update 11/28/11: Except for a $51,000 private mortgage scheduled to be paid off over 15 years, all funds for the project will come from the federal programs. City officials say the funds will be secured by mortgages on the property that will require no interest or principal payments during their 15-year term.
Assuming Brinshore meets the requirements to provide low income housing for that 15-year period, the loans will be forgiven and Brinshore will own the property debt free with no further requirement to use them for low-income housing.
They can buy my house too!!!
Only in Evanston can the city spend over $800k on a building worth less than $400k. Anyone wonder why our government is in the situation it is? The Feds want to raise taxes and cut services … Once again the working class gets screwed. The city can buy my house for twice the market value and rent it too!
Memo to Gov’t officials – spend YOUR OWN MONEY
Their should be a simple rule by which government officials spend OUR tax dollars: Spend OUR tax dollars as if it was YOUR OWN MONEY. The absurdity of spending $823,000 of our tax dollars to buy and rehab this building is preposterous. And people wonder why there is a lack of confidence in government? It doesn't matter if this is federal money, state money or local money – don't waste our scarce tax dollars on stupid investments. Spend a couple of minutes on Zillow's web site and see where comparable homes in the neighborhood are listed. It's easy, it's quick, it's responsible for public officials to do before spending our tax dollars. Talk to local real estate agents, talk with contractors. Please show some responsibility before committing $ 823,000 of our money. A quick analysis would suggest that half that amount or $411,500 would be more than enough to buy and rehab this house. Please use some common sense.
Wasted resources. Again.
The city is spending more on rehabbing one three unit apartment building this year than the cost of keeping Chandler Newberger Center open—and that $800K is near enough to the shocking $1M of capital improvement the city manager was complaining about that Chandler and the Mansion at Lighthouse Beach that houses the Evanston Art Center would need to stay off the chopping block?
I realize that the rehab was funded by a grant, but it seems only Evanston could waste so much money on one project while lamenting about the need for budget cuts and how the taxpayers just need to tighten their belts and not expect "recreation" because "we aren't in the business of recreation."
Sounds logical to me. Thankfully the council listened to the people for now on Chandler. Yet at $800K, don't you think the city could have improved 2-3 buildings for low income families throughout the city—and would someone really pay that rent in that location in the city? What a waste of resources.
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