The demolition of a handful of eyesore properties in Schenectady could be delayed as the city awaits word about a $3 million federal Department of Housing and Urban Development loan trumpeted last month by U.S. Sen. Chuck Schumer, according to city attorneys.
Acting Director of Development Richard Purga said Thursday that city officials discovered the nearly $2.5 million earmarked for tearing down the dilapidated structures can't be used to raze city-owned property.
He said the city had to also scrap plans to put $40,000 toward the Schenectady office of the Community Loan Fund of the Capital District on Albany Street, which officials mistakenly believed could be used for "economic development purposes."
"We got a greater understanding of how funds could be used by talking to the people in Washington," said Purga. "We had to finesse it a little bit."
The third project, which hasn't changed, calls for $500,000 to rehabilitate the former Department of Social Services building on Nott Street into 14 rental housing units, eight of which would be affordable housing units.
On Thursday the city had not been notified by HUD that it had been awarded the loan, added Purga, something Schumer's office hopes will soon change.
"After our strong push in partnership with the city, HUD made a wise choice awarding Schenectady this loan to address blighted homes, and I will keep their feet to the fire so that the city receives this vital federal investment ASAP," said Schumer in a statement. "This loan will energize a large-scale renovation of vacant and neglected properties, and the sooner the funds flow into Schenectady the sooner this vital community improvement can commence."
Mayor Gary McCarthy said he is scheduled Friday to "go over some of the timeline and options we have to implement."
Schenectady Assistant Corporation Counsel Rachael Ward said Thursday that of the 325 properties in foreclosure, only 10 are on the demolition list. She said the city will decide in August whether to assume title of the foreclosed properties depending on the parameters of the HUD loan.
"The only thing that it has delayed is the demolition of these properties," said Ward. "It could have an impact on how many properties will be demolished or which ones will be demolished."
This is latest setback in the city's efforts to knock down properties in or slated for foreclosure.
Last month, a city attorney was forced to resign after missing a key deadline to file paperwork related to the foreclosures that city leaders said would delay the proceedings by several months.
Corporation Counsel John Polster said Thursday that the city is moving ahead with the foreclosures.
"It was always clear what the purpose of the loan was for, we're being told that it's been approved, and are waiting for them to give us a definitive statement on how the funds can be used," said Poster. "The bottom line is that we're moving forward with the foreclosures, but there may be some properties that we can't foreclose on until we know what the rules are."
http://www.timesunion.com/local/article/Schenectady-plan-to-raze-city-owned-properties-5428399.php
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