City considering loan to help demolish houses

PARKERSBURG – Acting as the Urban Renewal Authority Tuesday, City Council sought more time to consider a proposal to fund demolition of dozens of dilapidated houses.

They also narrowly rejected the proposed donation of one property targeted for demolition, concerned over the precedent it might set.

The authority, chaired by Councilman Mike Reynolds, met prior to Tuesday’s council meeting in council chambers. City Development Director Rickie Yeager outlined a proposal to borrow $500,000 from the West Virginia Housing Development Fund to pay for the demolition of blighted properties and the acquisition of some of the land on which they sit.

In April, Mayor Bob Newell proposed using $1 million – $200,000 a year from street-paving funds for five years – to tear down more than 80 run-down houses and acquire land.

Yeager said the loan would allow the city to do some of that work while using the other money for incentives to get people to build back on those lots to address a predicted housing shortage as oil and natural gas activity increase and the proposed ethane cracker plant is constructed.

Newell, who did not attend the meeting, said later that the change could mean fewer houses are demolished up front. During the meeting, Yeager noted some of the structures marked for demolition are already being addressed.

“Since that list was developed, there’s already been four or five properties that people have sold or transferred,” he said.

Yeager said the Housing Development Fund board granted the city special permission to request a half-million-dollar loan when usually they cap requests at $150,000.

Council members had questions about the plan and voted unanimously to send it to the Finance Committee for further consideration.

“I kind of feel uncomfortable with this,” Councilman Jim Reed said.

Reed asked if there was a way to draw down the money as needed rather than borrow it all at once and have to start paying interest on the full amount.

Yeager said local banks had been contacted about that but there didn’t seem to be enough support to do it.

The loan would have zero percent interest the first year, and the city would pay $100,000 before the rate rose to 2 percent in the second year, reaching 5 percent by the fifth.

Councilman John Kelly said he would support borrowing the money only if it could be paid back by the end of the current mayoral and council terms, on Dec. 31, 2016, or within six months of that date.

“This mayor, this council will leave office with a legacy of tearing down homes” and leave their successors to pay for it, he said.

The authority also voted 5-4 not to accept the proposed donation of one of the houses slated for demolition.

The house, at 1107 13th St., is owned by Harrisville-based Gas & Oil Inc. and offered to the city by Gas & Oil Vice President Stephen Ward.

Yeager said Ward indicated the house was originally purchased to be renovated but that was now cost-prohibitive.

“People broke in, stole the copper piping and pretty much just wrecked it,” Yeager said, noting the lot is also irregularly shaped.

Some council members questioned why the city should pay for the demolition.

“It just appears to me that we’re taking on Mr. Ward’s problem,” Councilman Jim Reed said.

Councilwoman Nancy Wilcox said if this donation was accepted, future donations of property to avoid cleaning it up or tearing it down could get “rampant.”

“What’s the worst-case scenario if we don’t accept it right now?” she said.

Authority attorney Rob Tebay said the city might wind up eventually tearing it down anyway but the Urban Renewal Authority wouldn’t have control of the property.

“We will only have a lien on the property that will probably never get paid,” he said. Tebay estimated the city could spend $5,000 to $7,000 to acquire the property, on top of demolition.

Despite her reservations, Wilcox voted to accept the donation. But only Councilwoman Kim Coram, Councilman J.R. Carpenter and Councilman John Rockhold joined her, and the motion was defeated.