Renovation Was Pricey, but City-Owned Building Hits the Market
Between the acquisition and the renovation, including a complete reconstruction of a mansard roof, 118 and 120 East Fifteenth Street cost more than $600,000 to prepare for sale.
The City of Covington used its funds through the state's federal allocation of Neighborhood Stabilization money to complete the project.
The properties appraised at $115,000 and $120,000, respectively, less than half the renovation cost. The difference in the two is that one has off-street parking while one doesn't.
"We're investing in something tangible. something that has a value," said Jeremy Wallace, the City of Covington's program coordinator for federal community block development grant and HOME funds. "Do you always get the return you want? No, but at least it is a tangible asset."
"The city spent none of its own money," said Natalie Bowers, Covington's marketing & communication manager. "If anything, we got money because of the property value return."
Indeed, the two-family townhomes on 15th Street sat vacant for many years and by the time it was selected as the final site for NSP renovation, one could stand on the first floor, look up, and see straight out the roof.
In March, the city commission approved a contract to remediate mold at a cost of $22,000 and to renovate the building for $446,000. Those prices were separate from the six figures needed to repair the mansard roof in 2012.
At that meeting in March, Dennis Elrod, the attorney contracted by the city to administer NSP funds, said that the numbers even gave him indigestion. "But this is a shell of a building," Elrod said at the time. It had been exposed to the elements long before Corbin Custom Remodeling showed up to do the work.
Residents of the Helentown neighborhood were excited to see the homes on the path to being owned.
"Having more home ownership will have a significant impact on our neighborhood," said Jennifer Rawers in March. She calculated that $2.5 million in private investment has been made in the surrounding area with an average of $175,000 per property.
"We're thankful that we got the opportunity to do this because we wouldn't have been able to otherwise," Bowers said.
It is unlikely that more funds for NSP projects will be coming from the federal government making 118 & 120 East Fifteenth the final rehabs. They are also two of the last three properties available for purchase. The average cost of the NSP homes was $150,000, Bowers said.
Some of the homes on Banklick were listed in the $170s but Wallace credited nearby prices of homes in the Old Seminary Square neighborhood as helping boost those tickets while the pair on East Fifteenth did not have that luxury.
The City has gotten aggressive in recent months in bringing the NSP properties to the attention of potential homebuyers. News releases are sent out regularly highlighting the amenities associated with the new homes and recently Bowers wrote a piece called Living in Covington, that profiled one resident that benefited from city housing programs.
The lower requirements for down payments and attractive loans have been played up from the city's communication end.
"How do you tell everyone, this is the deal of the century?," Bowers said.
Homes on Banklick Street, Bakewell Avenue, and Berry Street have been scooped up.
"You get people twenty-four to thirty-five who say we still need to save for three years before we can buy but they should look at this program now," she said. "That's three years that this program could help them."
In all, the NSP program saw the renovation or new construction of thirty-three properties, with only a pair of outliers that went well over budget on East Fifteenth. "Call any developer and they will say it's a risk of any project and you know, we are happy that only happened to one out of thirty-three properties," Bowers said.
"Do you want to do a cheap flip and get a marginal buyer or a quality rehab and a quality buyer?," Wallace asked. He added that NSP had to follow strict guidelines in relation to preservation and remediation that other developers who don't use federal funds can ignore. "These NSP homes were 40 to 50 thousand dollars in before we even start because of environmental concerns."
The program was worth it, Wallace said, because it is helping to achieve city goals of reducing crime, having sustainable real estate, and to improve community morale.
Owning a home also captures and engages citizens, he said.
"When you have engaged citizens that are homeowners, they engage small businesses. That right there is what this project helps achieve," Wallace said. "The psychology of home ownership changes the way you think about the community."
The remaining properties are 118 & 120 East Fifteenth Street and 912 Banklick Street.
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Written by Michael Monks, editor & publisher of The River City News
Photos from inside 118 & 120 East Fifteenth: