Please consider the following message from Rick Swartz, executive director of the Bloomfield-Garfield Corporation (BGC):
In response to Robert Swope's comment, let me say that there may be a Community Development Corporation (CDC) in town that somehow managed to acquire a property from the city at some point in the past and then flipped it for a substantial profit. The Bloomfield-Garfield Corporation (BGC) is not that CDC. We actually have taken one property in this manner from the city and re-sold it within a few months to a private buyer. It's at 4924 Dearborn Street in Garfield. As Mr. Swope correctly notes, we were able to obtain the vacant house from the city for $1,000. We incurred another $2,447 in settlement costs on top of the $1,000 purchase price. When we re-sold it, we incurred another $787 in closing costs. The buyer paid us $7,000, but that was only after we issued a public RFP for prospective buyers to respond to, and had cleaned it out completely at a cost to us of over $2,000. We netted less than $1,000 in the end for all of our trouble.
Paul Leger, the city finance director, has no intention of letting any CDC abuse this process. And, as the market begins to recover in a number of distressed neighborhoods, it may become less necessary (hopefully) for CDC's to ask the city to take vacant, tax-delinquent houses on their behalf. Folks like Mr. Swope will be able to buy them more swiftly from their owners, assuming they can find them. For us, though, it's a 2-year-long process at best, and the property usually suffers further damage during that period.
The principal value in the city doing this is not to find a way for CDC's to enrich themselves, but to remove liens totaling, in some cases, tens of thousands of dollars that could leave the property vacant and blighted for a very long period of time. These sales, by the way, are open to other bidders, and we have been to court-supervised sales where other parties have outbid the CDC for the property that the city had taken on their behalf. It was all fair and square. Just sayin'.
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In response to Robert Swope's comment, let me say that there may be a Community Development Corporation (CDC) in town that somehow managed to acquire a property from the city at some point in the past and then flipped it for a substantial profit. The Bloomfield-Garfield Corporation (BGC) is not that CDC. We actually have taken one property in this manner from the city and re-sold it within a few months to a private buyer. It's at 4924 Dearborn Street in Garfield. As Mr. Swope correctly notes, we were able to obtain the vacant house from the city for $1,000. We incurred another $2,447 in settlement costs on top of the $1,000 purchase price. When we re-sold it, we incurred another $787 in closing costs. The buyer paid us $7,000, but that was only after we issued a public RFP for prospective buyers to respond to, and had cleaned it out completely at a cost to us of over $2,000. We netted less than $1,000 in the end for all of our trouble.
Paul Leger, the city finance director, has no intention of letting any CDC abuse this process. And, as the market begins to recover in a number of distressed neighborhoods, it may become less necessary (hopefully) for CDC's to ask the city to take vacant, tax-delinquent houses on their behalf. Folks like Mr. Swope will be able to buy them more swiftly from their owners, assuming they can find them. For us, though, it's a 2-year-long process at best, and the property usually suffers further damage during that period.
The principal value in the city doing this is not to find a way for CDC's to enrich themselves, but to remove liens totaling, in some cases, tens of thousands of dollars that could leave the property vacant and blighted for a very long period of time. These sales, by the way, are open to other bidders, and we have been to court-supervised sales where other parties have outbid the CDC for the property that the city had taken on their behalf. It was all fair and square. Just sayin'.