Concerns that cost the city money

Register
Jan 7, 2014
Cities are desperate for development and Sandusky is no different. Sandusky doesn’t seem to know how to attract the right kind of developer who won’t take advantage of the situation. 
 
The local groups feel a need to push the city in the right direction when it comes to development. The groups can sometimes make matters worse by throwing anything up against the wall to see if it will stick without considering the consequences of what the project t will do to the city’s budget. The right kind of developer will not demand any financial backing from the city other then tax abatement, TIF, revolving loan, or altering zoning for the project.
 
It is the nature of the developers to press their demands to the limit to see if the city is desperate enough to fulfill their every request. The city needs to recognize the limits it can go to assist a developer without it costing the city to the point where it has to lay off people and cut services in order to accommodate development. 
 
Another concern for the city is demolishing commercial buildings due to the structures causing a nuisance. The private property owners have caught on to the idea that the city will shoulder the responsibility of taking down their buildings. Of course, the demolition expense will go on the owner’s property taxes and the city would be first in line to get paid, but the chances are slim the city will be able to recoup the loss. Sometimes CDBG money can be used, but it seems the city is depending too much on CDBG money for these projects and not using the CDBG money in more useful ways. 
 
Some of the vacant building owners can afford to clean up their own properties without the city’s help. The city needs to be more aggressive in getting the property owners to take care of their property to a point that the building doesn’t start to deteriorate and become a nuisance. If the owners can afford to buy the property, they can afford to do something productive with the property instead of allowing it to deteriorate all in the name of investment property for some time in the future.
 
Demolition cost the city a lot of money and the grants are running dry to take care of all the buildings that need to be demolished, especially, when it comes to the old factories setting around costing a half a million dollars or more to take down. Placing a band aid on the situation doesn’t help much if the core of the problem goes unchecked.
 
It is a shame that the Brownfields Committee has been suspended due to budget cuts. The committee was instrumental in pushing to get the old factories sites cleared for demolition. The group started to gain momentum with the monumental task of assessing the properties before it was suspended. At least some of the properties have been cleaned up so development can take place without the developer having to be concerned with asbestos, demolition, and doing the environmental cleanups, which can run into a great deal of money for the developer. I hope he committee can reconvene at a later time to complete the job that they started.

Comments

T. A. Schwanger

###

Was the Brownfields Committee disbanded due to budget cuts or because the committee was allowed to go by the wayside by the City Manager and City Commission. I personally do not recall a vote or discussion to disband because of budget cuts.

Latest word in the trenches is the City (taxpayers) is now on the hook to clean up Wysteria Farms on Campbell Street. Another example is the City funded cleanup of the automotive repair shop at 1636 Hayes Avenue. This property is now in the Erie County Land Bank Program. While there have been occasions where the City has placed demolition costs on the property taxes, the City has not been overly successful in collecting. In the end, the deadbeat property owner comes out the winner.

One suggestion for this Blog--Can Ms. Johnson update this particular blog by getting an update from Chief Ricci on how his Commercial Building/Vacant Building Licensing program has progressed? As of 2012, Sandusky had 156 vacant or abandoned commercial or industrial buildings.

Fireside

A private person buying the property does not mean said person has the tools to deal with the govt when cleaning the property up. Most cases it is better to have the city govt help with state and fed govt clean up mandates in concert with the private owner.

T. A. Schwanger

###

Agreed under certain circumstances.

However, in the case of Wysteria Farms property, there was a mini celebration at City Hall when it was announced the property was purchased and the owners agreed to clean up the property at their expense. Now the City will foot the bill.

Nemesis

"The right kind of developer will not demand any financial backing from the city other then tax abatement, TIF, revolving loan, or altering zoning for the project."

No, Sharon, the right kind of developer will not demand any of those, either, and the right kind of city government will not offer them. Such come-ons and incentives only serve to tilt the developer's decision scale, distorting a good developers' well honed judgment of whether a project will succeed. If a developer truly believes a project will be successful, flourish, and thus offer a good return on investment, then no such incentives are needed. Such incentives only serve as a way for a developer to hedge his bets on a questionable project.

Better to reduce the tax and regulatory burden across the board and create a climate conducive to investment for both new developments and the growth of existing enterprises.

T. A. Schwanger

###

@ Nemesis:

I agree with you to a certain point. In fact there are numerous papers written by expert economic development gurus documenting your exact hypothesis.

With that said, if the City of Sandusky does not apply for CORF Grants (State Issue 2) to clean up properties such as Sandusky Cabinets or APEX, some other Ohio community will. At least in the APEX case, Famous Supply Company did kick in money for the clean-up which should have been a prerequisite to CORF regulations. The problem now becomes when a developer wants to develop the APEX property and expects 100% tax abatement on new development for 30 years.

Nemesis

Wow, Tim, that's a heck of a rationale there. Let's follow that line of reasoning and see where it goes....

Why shouldn't I quit my job and go on the dole, then? After all, if I don't take those food stamps and unemployment checks, someone else will.

Darkhorse

Developers like to see how stupid the cities really are when it comes to investing in their projects. They can also tell the city that if the city doesn't play ball, they can take their project somewhere else. This is when it is time to cut ties with developer because if he could take his project somewhere else, why did he come to the city in the first place? The developer is aware of what cities they can manipulate for tax dollars and which ones will not go for their extraction of tax dollars. If the developer can get away with spending less on his project by allowing the taxpayer to pick up the tab for his project, the more dollars he ends up putting in his pocket for the project. The city needs to stop allowing the developer to manipulate the need to use our tax dollars for their projects.