Sales slow for city's vacant properties

The Baltimore Sun

Baltimore's housing department has significantly slowed the process of offering city-owned properties for redevelopment in the past several months, potentially jeopardizing the city's ability to draw private investment into poor neighborhoods that need it most.

After years of amassing abandoned homes and buildings with the hope of spurring renewal in the city's most blighted neighborhoods, Baltimore's Department of Housing and Community Development now appears to be decelerating at least three programs once used to put that property back on the tax rolls.

The slowdown in the pace by which city-owned properties are put up for sale raises questions about whether Mayor Sheila Dixon has made a priority out of developing Baltimore's vast stockpile of vacant buildings and empty lots - be it for the rehab of a single rowhouse or a large-scale project intended to attract dozens of families.

Housing officials note that the overall real-estate market has slowed - making it harder for everyone, including the city, to sell property. And while they may be making fewer offerings now, officials said the Dixon administration is considering new ways to unload the thousands of properties the city owns that may make the process faster in the future.

"We understand the softness in the market right now, and we don't want to swamp the market," said the city's housing commissioner, Paul T. Graziano. "We want to focus on those viable projects that are moving forward now."

In February - weeks after Dixon took office - the housing department created a new division focused on "neighborhood investment" that, according to the city's Web site, was "designed to speed up disposition of city-owned property." But a review of several months' worth of housing development projects suggests that the opposite has occurred.

In one program, called SCOPE, that is used to sell individual properties in relatively strong neighborhoods, the number of lots added to the sales pipeline dropped from roughly 106 in 2006 to none so far this year. Before this year, the department had steadily increased the number of properties it put into the SCOPE program.

"It's almost as if that program is being abolished, dismantled or just phased out," said Neil Abraham, a real-estate agent who had previously worked with SCOPE, which stands for selling city-owned properties efficiently. "It at least presented a sense of hope. Since the leadership has changed, it is virtually gone."

Another method used to sell city-owned property - the "request for proposals" process - has also dried up in recent months. Last year, the housing department issued eight such requests, including one for a 4-acre site in the Penn North neighborhood and another for a seven-parcel site along East Lombard Street.

Graziano argued that the city has issued one such request this year - a large-scale development of more than 150 properties in the Oliver neighborhood - though the process being used in that case is slightly different. In Oliver, a developer initiated the process by approaching the city with a proposal. The city then offered the properties before moving forward with the deal to make sure a better offer did not come along.

On its own initiation, however, the housing department has not issued a single request this year.

Several sources in the development community told The Sun that they have noticed a slowdown from the housing department since Dixon became mayor in January to serve out the remainder of Gov. Martin O'Malley's mayoral term, but they declined to comment on the record because many of them do business with City Hall and fear retribution.

The drop-off, those sources said, corresponds with staff shakeups that have taken place in the past several months, including the appointment or promotion of longtime Dixon allies.

The mayor denied having any involvement with how staff members were placed within the housing department.

In February, the department created the neighborhood investment division, which took control of selling city property along with other functions. Jacquelyn Cornish - formerly the executive director of the Druid Heights Community Development Corp. - was chosen to oversee the new division. Cornish served on Dixon's transition committee this year and contributed $1,135 to her campaign in 2007.

Within the division, another official and longtime friend of Dixon's was then put in charge of a number of the programs the department uses to sell city property. Despite their friendship, Dixon denied ever lobbying the housing department on behalf of Edward Anthony for a promotion.

"First of all, you need to talk to the commissioner, because he doesn't work for me," Dixon said of Anthony. "I've never done that. ... I don't get involved in the hiring of people - and he's more than qualified - but I don't get into that."

Asked directly if Dixon had ever intervened on Anthony's behalf, Graziano answered indirectly, saying that he had empowered Cornish to "put together her team. She hired Ed Anthony. She put together her team of directors and assistant commissioners. That's the way we have operated."

Anthony said he is proud of the work he has done for the housing department. He said the number of properties actually sold has increased this year.

Asked to characterize his relationship with the mayor, Anthony said: "My personal life is my personal life. ... I stand on my own merits and my own strengths."

For years and through prior mayoral administrations, the city has struggled to deal with Baltimore's vacant housing stock, which includes 40,000 properties by some estimates. A centerpiece of O'Malley's tenure as mayor was the Project 5000 program, in which the city acquired thousands of buildings. The hope was to purchase entire blocks that could be refurbished or demolished and redeveloped.

As City Council president, Dixon was often critical of the Project 5000 program, and she has said she intends to speed up the process by which the city's properties are sold. That is one of the reasons the department wants to move away from formally requesting development proposals - because they require a more stringent review, they are often criticized as being too slow.

City housing departments - in Baltimore and elsewhere - have historically struggled to act as large-scale real-estate agents. And though the process has slowed considerably recently, it was never perfect. By some estimates, the city owns about 12,000 properties, most of which are boarded-up buildings or vacant lots.

Experts say confronting vacant housing is important for the health of cities because those homes can attract criminal activity, sap resources without contributing to the tax base and reduce the value of surrounding properties.

"There's a huge foreclosure crisis, and the market is soft in many cities," said Jennifer Leonard, director of the National Vacant Properties Campaign in Washington, who said that Baltimore has taken several correct steps to deal with the problem. "Cities that are willing to at least confront the problem and recognize the issue are the ones that do see progress."

Another indication that the department's process has slowed is that revenue coming in from the sale of city property is falling below expectations. Michael Bainum, an assistant commissioner, said he believed the department had come in about $800,000 below projections for the fiscal year that ended in June.

"The market has shifted a lot in the last six to 12 months," Bainum said. "I think it's to our advantage that we can be sort of deliberative and thoughtful about offering properties up [so that] we're not offering them at a time when money is tight and development interest has waned."

Regarding SCOPE - the program that showed a sharp falloff this year - Bainum said the city has identified 50 properties he expects will be put up for sale in the next four to six weeks.

The problem has not been with actual sales of city property, but rather the number of properties being put into the pipeline for future development. Housing officials said that the city sold a total of 132 properties in fiscal year 2007, up roughly 83 percent from fiscal year 2005.

A third initiative used to sell city properties, known as the rolling bid program, also hit a rough patch this year. Under that program, the city posts a list of properties every month that are up for development and gives potential buyers three weeks to submit a proposal to redevelop them.

According to the department's Web site, the program was suspended this summer. In July, officials posted a notice: "Rolling bid listings have been suspended until September 2007" - a date that also happens to coincide with the Sept. 11 primary election.

That notice was later removed, and a new list of properties was posted for consideration. Asked why the program had been suspended and then restarted, both Bainum and Graziano blamed a shortage of staff.

john.fritze@baltsun.com

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