Wednesday, Nov. 23, 2016 12:08 am
Neighborhood group under scrutiny
City looks at Enos Park neighborhood association
With the redevelopment arm of the Enos Park Neighborhood Improvement Association behind on property taxes, at least two city officials say the city of Springfield should consider taking over ownership of land from the cash-strapped group.
Since 2010, Enos Park Development has acquired dozens of properties using public money approved by the city council. Some homes have been demolished, some have been fixed up and some are awaiting new owners who will renovate them. While the neighborhood group boasts that 40 properties have been redeveloped, Enos Park Development owes more than $35,000 in delinquent taxes, fees, interest and penalties on 73 parcels. Taxes were auctioned on Nov. 4. Property owners who don’t pay taxes for two years risk losing their land.
Funded by tax increment financing, the so-called land bank in Enos Park was set up to acquire fixer-uppers and sell them to people who would bring dilapidated homes up to code. Structures that are too far gone are demolished, and the land bank includes vacant lots as well as houses in need of work. Renovated homes must meet design standards set by the neighborhood group, with Enos Park Development often selling properties for less than market value in hopes of attracting so-called urban pioneers willing to invest in the neighborhood and abide by design standards intended to beautify the neighborhood and maintain its historic character.
With Enos Park Development behind on taxes, Mayor Jim Langfelder and Ward 5 Ald. Andrew Proctor say that the city should consider taking over ownership of land, which would be removed from property tax rolls if it were publicly owned. Proctor says he’s not sure how to address the current tax debt, but he doesn’t want to see TIF money allocated for property taxes.
“I don’t think anybody would support doing that,” Proctor said.
The city inspector general’s office is now conducting an investigation of Enos Park Development. Langfelder said the probe began this fall when the city couldn’t immediately say whether a property on a list for acquisition had already been purchased with TIF money. That proved not to be the case, but Langfelder and other city officials want more oversight over the redevelopment program.
Under former Mayor Mike Houston, the city council approved annual $250,000 allocations for property acquisition without knowing what properties would be acquired. That changed last year, when the council required the neighborhood group to provide the city with a list of parcels that would be purchased with TIF money. Council members in 2015 also expressed concerns about real estate agents who are members of the neighborhood group collecting commissions on land transactions made with TIF money. Before approving TIF funds for land acquisition last year, the council amended the ordinance to ban real estate agents who are members of the neighborhood group from collecting commissions on property transactions involving TIF money.
“I think Enos Park should be on notice: There’s going to have to be more documentation given to the aldermen before we can, in good conscience, write a check for $250,000 without more specifics to it,” Ward 7 Ald. Joe McMenamin said in 2015 before the council unanimously approved the amended ordinance.
Michelle Ownbey, president of the Enos Park Neighborhood Improvement Association, said that her group has given the city a list of all properties acquired with TIF money, prices paid, the names of purchasers as well as sales prices. Realtors who volunteer for the neighborhood group have collected commissions on sales of renovated homes, she confirmed. There has been one such transaction in the past year, she said, but it involved a property purchased before the city barred association members from collecting commissions. The commission was reduced from 3 percent to 1 percent, she said.
A $150,000 TIF allocation to purchase five properties that had been set for council action in September is now on hold pending the inspector general’s investigation. Langfelder said that he wants to know who sold property purchased by the Enos Park group with TIF money, who bought it from the group and at what price and what ultimately happened to the property once it was sold by the group. He said he expects the investigation to be complete in about two weeks.
“Are the properties being improved or are they being turned around and sold for a profit?” the mayor asked. “What we want to do is follow the whole cycle. What properties are you going to purchase, and what happens after that? We’re not going to take it over. We’re more in partnership with them to make sure it moves forward.”
Proctor, who lives in Enos Park, said that the pace of construction seems to have slowed.
“Anyone who goes through Enos Park, who lives here and drives through, you can see a lot of progress in the last five years – there’s always a house or two being renovated,” Proctor said. “The last year or two, it seems that everything has kind of stopped.”
Ownbey said that people who buy homes that were initially acquired with TIF money are allowed to sell them, and they are also allowed to redevelop more than one property.
“I’ve heard the criticism: People shouldn’t be allowed to make money on these properties,” said Ownbey, who is publisher of the Springfield Business Journal, a sister publication of Illinois Times, which is owned by Fletcher Farrar, who sits on the board of directors of the Enos Park Neighborhood Improvement Association. “If it was easy to make money on these properties, we wouldn’t exist.”
The properties come with strings that include abiding by design standards. The neighborhood group has sold property purchased with TIF money for below market rates, Ownbey said, and sometimes for thousands of dollars less than Enos Park Development paid for the land using public money. She pointed to a home on North Sixth that recently won a city preservation award as an example. Enos Park Development paid about $15,000 for the house, Ownbey said, then sold it to a couple last year for $2,500. After renovation, the house this year won a city historic preservation award and was appraised at $160,000, she said.
“Did we lose money?” Ownbey said. “I don’t think we did.”
Ownbey acknowledged some growing pains in an all-volunteer group that existed on a shoestring before the land bank was established with city money five years ago. She said the neighborhood group is adding an attorney and an architect to its board of directors.
“We’ve gotten so big in the last few years, without having a staff or administrative support, we need some professional expertise,” Ownbey said. “For the first time, we’re getting folks from outside the neighborhood involved.”
Contact Bruce Rushton at firstname.lastname@example.org.