City of St. Paul eyes $46 million to fix, raze houses

St. Paul planners want to buy 400 vacant and foreclosed homes to fix up or knock down with the goal of renewing struggling city neighborhoods.

The estimated cost is about $46 million. That's money the city certainly doesn't have.

But the federal government has nearly $2 billion that it wants to hand out through the second round of its Neighborhood Stabilization Program, part of the American Reinvestment and Recovery Act.

On Wednesday, the City Council told the city's Department of Planning and Economic Development to apply for funding. The total project cost is nearly $58 million, but city officials anticipate selling 120 of the acquired houses for about $12 million, which is why they're asking for $46 million.

"Invested wisely, this funding will allow us to turn vacant houses into homes, attract new families to our neighborhoods, and create jobs in our community," Mayor Chris Coleman said in a statement.

If granted, the money would join an initial $10.5 million that St. Paul was allocated through the first-round of the Neighborhood Stabilization Project, part of the Housing and Economic Recovery Act of 2008. That initial money would buy about 125 properties for repair, demolition and buyer programs. It hasn't been received yet.

City officials are confident their second-round request will be approved.

"The most valuable thing we have going for us is that we already have a plan in place."

She was referring to the $25 million initiative started three years ago by the mayor's office to improve four struggling neighborhoods. Frogtown, North End, Lower East Side and Dayton's Bluff were selected because of property values, home vacancies, mortgage foreclosures, crime rates and water utility shutoffs.

The purpose of Invest St. Paul is to work with various partners to revitalize those neighborhoods and attract new development and services.

More than 1,900 vacant buildings, most of them single-family structures, were registered with the city at the end of June. That compares with 550 such buildings in 2007. Dealing with upkeep and security of abandoned properties cost $3.8 million last year.

Many of the vacant buildings are in foreclosure, and the city estimates that an additional 2,000 occupied properties also are in foreclosure.

For more information, go to www.stpaul.gov/nsp.

In other action Wednesday, the council approved a $125,000 grant from the Traveler's Foundation to go toward the mayor's post-secondary preparedness initiative.

Chris Havens • 612-673-4148

$16 MILLION for acquisition of 400 homes

$30 MILLION to rehab 300 of those acquired properties

$600,000 to create a land bank and for property holding costs

$4.5 MILLION for incentives for 300 home buyers