Sunday, February 21, 2010
Expanding on a Proposal to Save the Sheltering Arms House
Post and photo by the Hawthorne Hawkman.
About a month ago, I was chatting with Connie Nompelis about this property after I'd been inside of it. I was in a mood of despair, since PPL also examined the place and felt that the city's estimate for rehab of $450,000 was accurate. But Connie came up with a novel idea on how to save this building. I've been playing phone tag with various contacts and didn't want to write about this prematurely.
(ADDENDUM regarding the ownership status and purpose added in the comment section of this post.)
Connie, on the other hand, decided to post her idea on her blog in order to build momentum for this house. Now that the idea is out there, I'm adding my own proposals to it...
First things first, go to Overnorth and read Connie's proposal. Are you back? Great, let's get started.
The $450,000 price tag is just plain unrealistic for saving this house. With the city as its owner, we essentially have three potential buyers: PPL, Urban Homeworks, and Twin Cities Habitat for Humanity. Habitat can only do single-family residences or conversions to single-family homes, so they're eliminated right off the bat. That's too bad, because the number one thing this house needs is sweat equity.
The other thing it needs is an exemption from a lot of the federal strings attached to the NSP dollars used to (unnecessarily) acquire it. For instance, the inside has extensive water damage, resulting in paint hanging off the walls in huge strips. Every single wall/ceiling is going to need to be stripped bare. If you or I were to do this, we'd get the following essential tools: masks, goggles, scrapers, friends, pizza, and beer. The masks and goggles would be optional. But with federal government worried about the effects of lead paint, this simple procedure becomes prohibitively expensive.
But if we get the cost down to somewhere in the $200 - 250,000 range, then it becomes manageable and desirable. A $200,000 mortgage would cost about $1,100 per month, plus taxes and insurance. Rent for each of the three non-owner-occupied units would bring in $1,800 - $2,100 per month.
So how else might we bring the costs down? Well, the city would spend at least $30,000 in demolishing a structure that simply should not be destroyed. I think it's fair to expect them to spend that $30,000 or more in helping out the new owners with the rehab.
I'm also going to push this one step further and propose that we implement principles from tax-increment financing districts. Wake up! I promise the rest of this paragraph won't be as boring as the last few words of the previous sentence. The premise is that an owner-occupied house will be far more beneficial to the area than a vacant lot. That in turn will stabilize or raise surrounding property values and bring in more revenue to government coffers. So why not cut the owners a break on their property taxes as long as the place remains owner-occupied?
For instance, structures like the Sheltering Arms House, once fully renovated, will bring in between $2,500 and $4,000 per year in property tax income. A vacant lot of this size would bring in between $150 and $500 per year. WOULD, except that the city owns the property and will pay no taxes on it. So give the owners a break by taxing the property at the rate it would be taxed at if it were a privately-owned vacant lot. That's still more money than would be received otherwise, and the whole area benefits. Plus, it would allow the owner to absorb more of the rehab costs in the form of a higher mortgage amount.
Finally, I'm still mystified about how the city goes about acquiring houses for the purpose of demolition. According to the Hillside Chronicles blog, the HPC has blocked the demolition of the infamous 1564 Hillside property. I don't agree with the Hillside blog about the necessity of 1564 Hillside's demolition, nor do I feel that historic designation of any kind should be necessary to bring about adequate rehabilitation of 1564 Hillside OR the Sheltering Arms House at 2648-50 Emerson Ave N.
But what I find MOST disagreeable is what appears to be the muddled bureaucracy inherent in the system. The Historic Preservation Commission is part of the city of Minneapolis. The city acquired 1564 Hillside FOR THE PURPOSE OF DEMOLITION. Now the HPC is refusing or at least delaying signing off on the demolition. Can someone tell me what's wrong with this picture?
Furthermore, the Hillside property has few, if any, of its original features left. The most famous historical connections it has coincide with mortgage fraud and identity theft. Contrast that with the Sheltering Arms House, which has many of its original features and was one of the first (perhaps THE first) Sheltering Arms orphanages in the city of Minneapolis. How can it be even remotely possible that the Hillside property has its demolition prevented by the HPC unless identical or stronger action is taken regarding the Sheltering Arms House?
However, historic designation shouldn't even be necessary. Solutions for saving this house abound, if we are only willing to act upon them.