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Housing Trust Fund Locked in Financing Battle

Bell Administration May Sell Parking Garage That Funds Housing Trust

The Toledo-Lucas County Housing Trust Fund is locked in a battle for its existence with the Bell administration and city council. In recent weeks, advocates have argued that city government must continue to honor a commitment made in the 1990’s to share revenues realized from a downtown parking garage—but now that garage is up for sale.

Hugh Grefe, housing trust fund board president, has publicly stated the city has “a moral obligation” to support the fund with a dedicated revenue stream. The trust fund is run by a volunteer board of directors, which disburses grants to housing construction and renovation projects for low-income people who make too much money to qualify for federal programs. Many of the city’s non-profit housing agencies are represented on the board.

Mayor Mike Bell and his top administrators have countered that the city has no such obligation, and even if it did, there is no money available in the city budget to dole out. The Bell administration also contends the city already funnels millions of federal dollars to housing programs each year.

The mayor has, however, offered a compromise: $90,000 this year and $50,000 annually through 2013. A spokesperson has called it “a good-faith gesture from the mayor” while the trust fund seeks a stable, permanent source of funding elsewhere.

The housing trust fund board already has tried that to some degree, but without success. Lucas County Commissioners approved an increase in the real estate transfer fee in December 2008. Advocates argued unsuccessfully that a portion of that fee hike should go to the housing trust fund. Officials say Franklin and Montgomery County Commissioners devote part of the real estate transfer fee to generate millions for affordable housing.

The housing trust fund board continues to seek what it sees as an ongoing commitment from the city: $50,000 per year in perpetuity. The dispute could wind up in court, unless top-level officials from both sides can work out an arrangement. Grefe met Monday morning with Deputy Mayor Steve Herwat to talk over the situation, but city spokeswoman Jen Detweiler would only say “discussions are ongoing.”

Grefe characterized the meeting as an opportunity “to clear the air” and to set a stage “more conducive to a positive end.” Grefe stated the board made it very clear to the Bell administration that public comments in recent weeks amounted to “personal attacks” and attempts “to impugn their credibility.”

The housing trust fund board now also is waging an all-out blitz to win public support, holding news conferences and letter-writing campaigns as part of its overall strategy. One housing advocate even stated the trust fund will remain “vulnerable to the whims of local politics and politicians” without a stable funding source.

The possibility of heading to court to resolve the situation is possible, although Herwat has expressed confidence the city would win on the merits of its arguments. A coalition of community development corporations, which helped start the housing trust fund nearly 20 years ago, was party to such a lawsuit in 1998, represented by Advocates for Basic Legal Equality.

A prior city administration used a federal Urban Development Action grant to build the parking garage in question, instead of diverting the money to help neighborhoods throughout Toledo. In return, city council had agreed in the late 1990’s to provide the Housing Trust Fund with proceeds realized from parking garage receipts. Over the years, that funding has proven spotty.

Community development corporations (CDC’s), essentially neighborhood-based non-profit groups set up to address housing and other issues within their service territories, frequently dispense federal Community Development Block Grant (CDBG) dollars for such purposes. However, CDC’s such as Viva South and United North, believe that the housing trust fund is essential to fill in the gaps to meet situations that don’t qualify for such federal funding.

Toledo’s CDC Alliance, a coalition of six remaining neighborhood groups, is backing the Housing Trust Fund board in its current efforts. Alliance president Terry Glazer disputes the Bell administration’s argument that more than $32 million in federal stimulus funding can solve many of the city’s current housing needs—including home repairs, weatherization, foreclosure prevention, and heating bill payment assistance.

“I think the city has a commitment to the housing (trust) fund, it’s clear,” Glazer said. “I think we need a housing fund because it’s non-federal money and federal money has all kinds of strings attached to it. When you really look at the situation, housing values have gone down,  people are having trouble becoming homeowners—it’s needed more than ever right now.”

Glazer speculated that the Toledo-Lucas County Port Authority may buy the parking garage from the city. If that’s the case, he said, “a chunk of money from the proceeds of that sale” should go to the housing trust fund.

“The money from that sale—we need to talk about it,” said Glazer. “I don’t think the city intends to take the proceeds from that sale and put it in the housing fund. I think they’re going to use it for either debt retirement for other garages or some other bills that they have.”

If that happens, Glazer stated the CDC Alliance “would look at its options,” including reviving the original lawsuit over the parking garage funding.

Port authority spokesperson Carla Firestone confirmed there are discussions between that economic development agency and the Bell administration to purchase the city parking garages, which she said would make it “another property in our portfolio.”

“We’ve been trying to buy the parking garages for a long time,” she said.

However, Ms. Firestone stated a potential deal with former mayor Carty Finkbeiner apparently fell through, because “he perceived a lot more equity” existed in the municipal parking garages than the real estate market would bear. The Bell administration, she said, would realize “an influx of cash for the 2011 budget year” if a deal gets done this year. Ms. Firestone stated she did not know the price range being discussed as a potential sale price of the parking garages.

A Bell administration spokesperson refused to comment on any possible sale, although Grefe stated the subject was addressed by both sides in Monday’s meeting. The housing trust fund made it known it expected a portion of the proceeds from any sale in a lump sum.

“We didn’t even come close to having that discussion, but I think they understood that our intention is, if they are going to sell them (garages), then we’re going to ask for a lump sum,” Grefe told El Tiempo. “Our assumption is they would prefer not to be making a lump sum.”

The talks between the Bell administration and the housing trust fund board are far from over. However, the two sides have agreed to put a hold on any ordinances pending before city council as long as progress is being made toward a resolution of the situation. The two sides will meet privately again on Sept. 1.