Rights to blighted houses sold to nonprofit group

Developer's move eases fears of delays in rehab

October 15, 2002|By Laura Vozzella | Laura Vozzella,SUN STAFF

A Washington developer sold the rights to 69 vacant and abandoned houses to a Baltimore nonprofit group yesterday, allaying concerns that the firm's ownership could delay an ambitious project to attack urban blight.

SkyRise Investors plans to develop 51 of the 120 properties it picked up at a tax-sale auction last month, but it agreed to resell the remainder at no markup because they are less suitable for for-profit development, said Jim Kelly, executive director of the nonprofit Save A Neighborhood.

"We really feel it is a victory for the ultimate goal, which is to see these properties rehabbed as soon as possible," Kelly said.

Save A Neighborhood, a nonprofit group created 10 years ago by the Community Law Center to clear titles on abandoned properties, plans to resell the houses to about a dozen community development corporations interested in rehabbing them, Kelly said.

The total price will be the same that Save A Neighborhood paid SkyRise: $67,259.07.

Save A Neighborhood had sought to buy the 120 properties for $110,598 at a Sept. 18 sealed bid auction. But SkyRise outbid Save A Neighborhood with a $140,010 offer.

The auction was organized as part of Project 5000, Mayor Martin O'Malley's plan to take control of 5,000 of the city's 14,000 derelict houses by the end of 2003.

City officials had grouped the 120 properties into a single bundle for the sale with the local community development corporations in mind as potential buyers.

The intention was to sell the properties to the groups because they had specific plans for the houses and had established records in rehabilitating distressed property, city officials said.

When SkyRise outbid Save A Neighborhood, city officials and community groups expressed concern that the properties had fallen into the hands of someone who might not be serious about redeveloping them.

"There was a lot of concern about this investor, who was not well known, suddenly [being] responsible for 120 vacant properties in Baltimore," Kelly said.

Developer Raj Sehgal of SkyRise said Friday that he was serious about developing the properties.

He could not be reached for comment late yesterday.

Bidders at the auction competed not to buy the houses directly but to buy tax-sale certificates that give the holder the right to foreclose on the property.

Foreclosure can take a year or longer.

Only then does the high bidder own the property and have the authority to rehabilitate it. SkyRise was happy to unload most of the houses and focus on the ones with the greatest potential to turn a profit, Kelly said.

"We are confident that SkyRise will rehabilitate these properties soon, not only because Raj has pledged to do so, ... but also because of a unique Baltimore City code enforcement remedy known as vacant house receivership," Kelly said.

He described that feature of the city code as a "use-it-or-lose-it law" that gives the city the right to foreclose on a vacant property if it is not rehabilitated.

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