HUD clears up Schenectady confusion
SCHENECTADY The city is free to demolish any property it wants after all.
Weeks after City Hall was thrown into confusion over regulations limiting the $3 million demolition loan from the U.S. Department of Housing and Urban Development, one of HUD’s top officials weighed in to settle the matter.
Holly Leicht, regional administrator for New York and New Jersey, said the city has permission to knock down any property it wants — whether it already owns it or not.
City officials had believed they could only demolish property that they acquired after receiving the HUD loan. That restriction came at the eleventh hour, just as the city was preparing to foreclose on many more properties in hopes of demolishing some with the loan. City officials delayed the foreclosure for technical reasons, but said they could delay it further, if necessary, to make sure they could comply with HUD’s rules.
On Monday, Leicht sent a letter explaining that the city had misunderstood the regulation. Development Director Richard Purga was delighted — and confused. He said at first that he could not comment until he understood exactly what was being said. He didn’t dare assume it said what it seemed to say.
But HUD spokesman Adam Glantz said it wasn’t too good to be true. The city can use the loan to demolish any property it wants.
“Yes, that would be the case,” he said.
He said HUD took full responsibility for the mistake.
“I’m sorry about the confusion,” he said, adding that the regulations were poorly written. “I agree, that didn’t seem to make much sense.”
The regulation was supposed to make clear that the city needed to pick property based on its use after demolition, he explained.
“It doesn’t have to do with the timing element,” he said. “You need development. It’s what is going to happen when the property is razed?”
The city must use the property for development that benefits low-income residents. Community gardens would be acceptable, as would selling the property to a low-income resident. But simply knocking down the building and walking away would not be enough, he said.
Mayor Gary McCarthy was pleased by the clarification.
“I thought that was always the premise we were operating under,” he said, adding that top HUD officials had told him initially that the loan could be used for properties the city already owns.
He said the city would pick out properties that would meet HUD’s reuse policy.
The city has finally received the loan documents from HUD and is processing the loan now, he added.
With the restrictions cleared up, McCarthy said he expects the city to accept the $3 million soon.
City officials are already setting up a schedule for demolition, he added.
They are trying to decide whether to organize the demolitions by neighborhood — which could lead to cheaper bids, because demo crews would not have to transport equipment lengthy distances — or by priority, which could send demo crews back and forth across the city.
He’s leaning toward the neighborhood-by-neighborhood option.
Once the decision is made, inspectors must make sure water is cut off and sewers are capped at each house. So demolitions won’t happen this month.
“My goal is last week,” McCarthy said, before adding that he thinks it will be at least another month.
“During the summer, I want to see houses down,” he said.