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Grant money saves house

A tug-o-war over the sale of a dilapidated home in New Richmond was decided after the state awarded the city $70,000 to fix up the place.

At the regular New Richmond City Council meeting Monday, Jessa Nelson, city housing coordinator, reported that the city was awarded an additional $400,000 in grant monies for its new low- and moderate-income housing program.

The city initially received under $250,000 to start a program offering no-interest loans to homeowners who wanted to upgrade their houses. The program also provides loans to qualifying families seeking to purchase a home in the city.

With the extra state money, Nelson expects at least an extra 25 to 30 families to be helped. Loans can range from around $5,000 up to $25,000 depending on the project.

The added grant funds were welcome, Nelson told the council, because the city has a serious need for improved low-income housing options.

"It's huge," she said.

The city now has 18 months to spend the money in its housing fund, Nelson said, although the state might extend that deadline in light of the extra funds.

"It's a lot of money to get out the door," council member Jim Zajkowski said.

The good news was dampened as the council later grappled with a proposal to sell a city-owned, condemned home at 137 West Sixth St.

John Walsh offered the city $55,000 for the home and he was the highest of eight bids received. The city's Property Committee recommended its sale.

But alderman Fred Horne said he opposed the sale, noting that one reason why the city received extra housing grant funds was because of its plans to rehabilitate the home and sell it to a low- or moderate-income family.

If the project didn't occur, Horne said he was unsure if the city would receive the $70,000 earmarked for the house. He further questioned if future grant funds would be jeopardized due to the city's sudden change in plans.

"I'd hate to burn that bridge," Nelson said. "We've had to work hard for a number of years to build that bridge."

But Walsh said his bid is the city's only "no-risk" option. He said the city could spend $70,000 rehabilitating the home and be struck with a house that cannot be sold. He said the housing market is slow and there's no guarantee that an older home can be marketed.

Alderman Ron Volkert also questioned if the loan funds would be enough to make a difference on the home.

"I don't know if $70,000 is enough to rehabilitate that house," he said.

Mayor David Schnitzler agreed, noting that the home is in "terrible shape."

"I think it's wasting a lot of money," he said.

But city officials pointed to a successful rehabilitation project at a home on High Street that was a much more daunting task, yet that property is now "really nice," said building inspector John Frisco.

Zajkowski said the city comes out better in terms of tax base with a home on the property. He said the rehabilitation plan also meets a need for more affordable housing in the community.

Nelson agreed, noting that there are only three homes currently on the market under $130,000, yet many families can't afford much more than that.

She added that the $70,000 rehabilitation project would also benefit local contractors, who would be hired to complete the job.

And once the house was sold, money from the sale would be funneled back into the revolving loan fund for other homeowners to use, she said.

Walsh questioned the city's involvement in the real estate business in town, stating they're in direct competition with private business.

"It's a worthy cause to be talking about low-income housing," he said. "I'd like to have the city consider helping longtime residents and business people, too."

Alderman Jim Johnston said the city has ignored its lack of affordable housing options for too long.

"We've got to remember the low-income people in town also," Johnston said.

A proposal to rehabilitate the home was approved 3-2, with Horne, Johnston and Zajkowski voting in favor. Volkert and Renee Keating voted against the idea.

Nelson said qualifying city residents can apply for the no-interest program and complete a variety of projects to improve their home or to help them buy a home.