Bringing Down the House

Taxpayers spent $65,000 to demolish the old Victorian at 1816 15th Ave. S. A buyer wanted to invest at least that much to fix it up. Make sense? You bet, says the Minneapolis Community Development Agency.

But it wasn't that easy. Before the MCDA board could accept any offer from Stephens it would have to circulate a formal Request for Proposals, inviting any member of the public to offer a plan for the house. Stephens still has her calendar for the months she spent putting together a pitch that would satisfy the agency's complex regulations: The pages for July and August 1998 are filled with notations in green, black, blue, and red pen, meetings about bids, financing, engineering reports.

Bringing 1816 up to code, she found, would require plenty of work. The house needed several thousand dollars' worth of tuckpointing and masonry work on the exterior; $11,000 worth of reconstruction for a bowed-out section of bricks on the north wall; and $86,500 for miscellaneous repairs such as adding central air, repairing floors, remodeling the bathrooms and kitchen, adding fences, a garage, and a porch.

On August 10 Stephens sent a proposal to the MCDA, pegging the price to completely rehab the property at $112,102.29. She attached architectural drawings and bids from two well-known local restoration firms. To raise the money, she said, she would take out a $67,000 mortgage and apply for a $45,000 Neighborhood Revitalization Program (NRP) subsidy. As the purchase price, she put down $1; she says the MCDA's manager of housing development, Earl Pettiford, had told her he couldn't imagine the house going for more than a dollar.

Michael Dvorak

Two months later, Stephens got a letter from Edie Oates. "The purchase price of this property is $55,000," it said. "Your proposal does not meet the basic requirements for the sale of this property and as a consequence must be rejected."

Pettiford denies telling Stephens that the house would sell for a dollar: "That dollar-house thing only comes up when [a property] is in public hands," he scoffs. "Some people think that they no longer have to pay market prices." The MCDA once did offer "dollar houses" through its Urban Homestead Program, but it abandoned the idea a few years ago. "Sweat equity was a big part of that," explains Pettiford. "But, in most households, both people are working and then coming home to a house that they have to work on at night. It got to be so there had to be a marriage counselor involved. There were some great success stories, but there were also divorces and jobs that just plain never got completed."

Fine, Stephens says she told Pettiford, maybe the dollar-house idea was unrealistic. But why $55,000? Behind that figure, she learned, was one of the more arcane loops of municipal financing: When PNHT disintegrated in 1997, the neighborhood group had tried to pick up the nonprofit's buildings. But the organization was barred by its charter from owning property, so the MCDA stepped in and purchased the buildings using NRP dollars. And that money, Pettiford told Stephens, had to be paid back to the NRP.

Stephens says she was willing to negotiate. "We would have met them somewhere in the middle," she says. But the agency stood fast on the $55,000 figure. She argued that the MCDA would have to pay the NRP even if it tore the house down, but to no avail.

Pettiford says it wasn't just Stephens's suggested purchase price he objected to: "Whether she paid $55,000 or $1, what she proposed to do was infeasible. The dollar amounts involved didn't make sense. It was a poor investment." As for the city's own investment, Pettiford says: "I know that I swallowed real hard a couple of times. The dollar amount was pretty large. We wanted to save these houses."

Stephens says it didn't look that way to her, though. "It didn't matter what we did, they just didn't want to sell it to us," she fumes. "Here's someone who works in the neighborhood, really wants to live here, has ties to the block. I don't understand why they wouldn't help--do everything they can--to get someone in there."

In November Stephens received another letter from Edie Oates. Since she hadn't responded to the earlier missive, it said, the MCDA would "be proceeding to the Phillips Housing Committee in December recommending demolition of this building." Later that month Stephens, discouraged and weary, closed on a house in the Powderhorn neighborhood. "I do feel some resentment," she says now. "No one likes being kept in the dark. No one wants to jump through hoops for nothing."

Phillips residents and realtors Corinne Zala and Dean Eichaker have dealt with plenty of buyers like Stephens over the years--people who fell in love with a government-owned, boarded-up house and the idea of saving a piece of history from the bulldozers. But, they say, many give up frustrated with the delays, inefficiencies, and sheer bureaucratic hassles of dealing with the MCDA.

For starters, no one seems to know exactly how many houses the agency owns--and which ones are for sale. Activists claim that in addition to nearly 200 vacant lots, the MCDA has some 50 houses in Phillips alone. Officials peg the number of buildings at closer to 25. They explain the discrepancy by noting that some homes inherited from other government agencies don't have clear title, and that others are considered the property of local nonprofit developers working in partnership with the MCDA.

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