Maintaining and securing foreclosed and vacant buildings is straining city staff and wasting taxpayer money, St. Paul officials said Wednesday. It's time, they said, for the owners of those properties to take responsibility.
"We are not going to stand by and let the quality of life in our neighborhoods deteriorate any further," St. Paul Mayor Chris Coleman said.
Like other cities confronted by the fallout of the foreclosure crisis, St. Paul plans to use legal action, foreclosure prevention counseling, code enforcement and other tools to fight blight and revitalize neighborhoods.
In one effort, the city has issued letters to six firms that it says own or control more than 440 vacant properties in St. Paul.
"The vast majority of these vacant properties are deteriorating, failing to comply with city ordinances and codes, undermining community efforts to stabilize and create healthy neighborhoods, and creating a public safety hazard," the letters state.
U.S. Bancorp and Wells Fargo received letters, but representatives said that just because the companies are listed in foreclosure documents doesn't mean they're responsible for the buildings.
In many cases, they said, the companies simply administer pools of mortgages.
"We didn't originate the loan; we don't service the loan, and we're not the entity that foreclosed on the loan," said Steve Dale, spokesman for U.S. Bancorp. As a trustee, he said, U.S. Bancorp has no responsibility for a property.
That doesn't mean the banks aren't concerned at the proliferation of abandoned properties, however.
"Wells Fargo shares the city of St. Paul's concerns. We've been at the table discussing this issue," said Susan Davis, executive vice president for Wells Fargo Home Mortgage. "That's why I'm a little surprised at the letter."
Mark Ireland, an attorney with the Housing Preservation Project who has been retained by the city to work on vacant property issues, said that even a trustee is responsible for helping to manage its properties.
The city's letter offers to work with businesses on plans for eliminating vacant properties but warns that if not satisfied with the progress, the city will pursue legal action.
Davis, who said she had not seen the letter Wednesday, said her company intends to work with the city.
Bryan Calder, corporate trust executive vice president for U.S. Bancorp, said his company also will meet with the city to help clarify its position.
The city has spent more than $2 million per year over the past couple of years to inspect, secure and maintain vacant buildings, said Steve Magner, head of the vacant building monitoring department. That doesn't include police or fire services, he added.
"Nuisance properties are coming faster than we can handle" he said.
His department budget jumped from $338,000 in 2005 to more than $600,000 this year. A record $100,000 went to boarding up houses in 2007.
There were 1,706 vacant buildings in the city as of April 8. About one-third of the 1,819 foreclosed buildings in 2007 were registered as vacant.
City Council researchers predict that the number of foreclosures this year could exceed 2,300.
The city has created a new mortgage foreclosure prevention division. Four people have been hired and a $250,000 grant will go toward hiring two more employees and buying equipment. Stepped-up outreach programs are planned, including putting counselors at neighborhood libraries and staffing a hot line.
Chris Havens • 651-298-1542