UniverCity Partnership

A few years back I was on a task force that looked into the PILOT headed by Rep Leary. We all realized that there was very little the City could not legally to impose a property tax, but that there were other options.

The key to the whole task force was that Representative Leary, who did an excellent job, brought people in from CEO for Cities who brought in reports on how other cities work with their non-profits, in particular Pittsburgh. After a few months, we came out with a really good report on how we could maximize the assets (monetary and intellectual) on the non-profits in the the City of Worcester. Amongst the many recommendations was that we should have an agency dedicated solely to these efforts.

Recently I have read about the PILOT issue being brought up again by some of the councilors. As a result I decided to check out the agency that was created by our task force the UniverCity Partnership. I got to tell you that I was rather disappointed. Although I have not heard of many of our recommendations being implemented, I was hoping that I have read something different. Quick can anyone tell me who heads this Partnership??? If you want, you can check out the report here.

If you want to see how this is suppose to be working check out the City of Pittsburgh's University Partnership or the Providence Plan. Instead of going down the PILOT road again, maybe we should reconvene the task force and take a look at our original recommendations and see how we have done so far?

Fire Department

In the paper today there is a story regarding fire department restructuring. Bottom line is that the number of companies from 23 to 21 — Engine 1 at Brown Square and Engine 10 at Park Avenue will be decommissioned.

This is beyond me and I have no idea exactly what this means, but it tells me one thing. For the city administration to take a step like this the budget needs to be in alot more trouble then anyone is saying just yet. All the more reason to question things like a Skybridge.

Stay tuned to budget numbers over the next few months.

PressMet

Rumor has it that they are closing their doors soon. Think we had a blog here not too long ago that there is balancing act between the existing businesses that has to be watched or businesses will leave and further erode the commercial base.

This will truly be a large loss for the City.

Soft Second Mortgages

Many of these new home-owners are helped by the City of Worcester to buy their homes with second mortgage from the City of Worcester. I believe that these are CDBG monies from HUD called HOME funds. It is a great program since it puts alot of people "over the top" into home ownership, who may be right on the fence from being able to qualify or not.

Basically the new home-owner, in addition to their primary mortgage, gets another loan from the City of Worcester (a 2nd mortgage). They do not have to pay it back, thus the term "soft" mortgage. Now that is how I understand it, believe me I could be completely wrong, here is a link that does a better job.

Here is a problem that I see. As the real estate market stabilizes, or even drops, the equity in some of the properties may disappear, especially if one does not own the underlying land. If these properties were to go into foreclosure and be bought by someone who is not low to mod income during the "affordability period", the "soft" second has to be paid back by the participating jurisdiction (PJ). Here is a better link.

Can anyone confirm, clarify any of this?

CDC Land Lease

I just read through one. Although the deed is straightforward (2 pages), the accompanying land lease that a home-buyer signes is confusing (38 pages). If anyone wants a copy, I can e-mail one to you. Drop me an e-mail Bill@AdvantageBenefits.com

The home-owner owns the dwelling but not the land that the dwelling sits on. Instead the home-buyer leases the land for 99 years at $50 per month. Per the terms of the lease the home-owner is reponsible for the property taxes, insurance, upkeep, etc.

The part that gets confusing is when the home-owner wants to sell the house. The landlord has first right of refusal and there is a requirement to sell the home to a "low to moderate income" person amongst other things including "the sale price to a third party shall be subject to DHCD's and to AHTF's approval."

Bottom line, to me, it looks legal to have the home-owner pay the property taxes on the land since that is part of the lease. The thing that jumps out at me is that the home-owner is limited when they try to sell the house. In the event the real estate prices went up, they may not be able to sell it at the corresponsing market value and reap the profits.