Yeah, that’s what she said.
SETTING THE SCENE
The CDA meeting last night was quite tense. I actually felt bad for most of the CDA members that likely had very little to do with decisions that were made, but were being accused of some pretty awful things. On the other hand, I don’t blame the residents that were rightfully upset with the low-ball offers for their property they don’t want to sell. The decisions were made in closed session and even tho they are required by law to announce what decisions were made, they were not allowed to tell me what was decided. I’m kinda confused by them not being able to tell me, because I thought the rule was as discussed here:
Q. Must the motion and roll call votes of closed sessions be recorded, and are they open for public inspection?
A. Yes. The motion and roll call votes must be recorded, regardless of whether they are taken in open or closed session, and they are open to public inspection to the extent disclosure is required under Wisconsin’s Public Records Law (WPRL).
However, I didn’t study up on it, wasn’t going to hang out for possibly hours without internet access to find out what they decided and quite frankly, wasn’t going to make a big deal out of it, as long as the property owners were notified quickly. The property owners will be notified this morning. And I’m going to do further research the answer to that question, since I’m now curious! 🙂
Bruer spent the first 45 minutes of the meeting in the hallway. He finally came in when Alder Kerr suggested someone go get Alder Bruer. There were about 30 people there for the meeting, city staff (Olinger, Brown, Olvera, Marx, Gromacki, Rolfs, Whitehead, Stepnik and I hope I didn’t miss anyone) and consultants or partners in various projects (5 or 6 more I think). By the time this issue came up, 14 members of the public had been waiting an hour and 15 minutes and only one staff person was able to go home.
There were no attachments to the agenda. So, you’ll have to forgive me if I have some of these numbers wrong as I couldn’t verify them cuz they kicked us out for closed session. Usually when there are number heavy items, I can just get copies from some committee member that is just going to throw them away anyways or there are handouts. No handouts, and the members still needed their materials. I wish this committee was more forth coming with information and transparent by putting relevant attachments on their agendas.
Oh, and finally, all of the members of the public that speak are African American, except the one guy, who says he’s a white guy and Duane Steinhauer.
PUBLIC TESTIMONY
David Hammonds – He’s the owner of 2405 Cypress Way. He says he has been a landlord for 40 years and a businessman. He feels that the city has hiked his assessment over the years to generate revenue or run him out of business, they failed, now they are taking advantage of us during the down market, to take their property, contingent on an appraised value, knowing it would be appraised low. The honorable and right thing to do is to at least give them the assessed value. Hammonds says offer is insulting, paid taxes on $400,000 and to offer $240,000 on the building is insulting. If not worth that much, why assessed at that rate? That could have been $2 – 3K in property taxes each year. That should not have been done. Feels the city has destroyed his faith in city government and discouraged him from investing in this city again or to encourage other minorities to invest. He has been an owner and businessman in Madison, they invested more every time had chance tried to encourage people to be investors and owners, by offering this, it put a bitter taste in my mouth. He has nothing good to say about the City and won’t encourage anyone, I would feel like would not be telling the truth that if you work hard for a living and invest, pull yourself up by boot straps and that 20 or 30 years later the city take all the investment away.
Levitan asks when he bought the property.
Hammonds says about 15 – 20 years, but he has been a landlord for 40 years.
1994 says Shimanski.
Levitan asks if primary issue is that the offer is so much less than the assessment?
Hammons says he paid taxes for last 5 or 6 years on assessed value of about $400,000. An offer of $260,000 is a kick in the face, shows lack of respect, if the property was appraised at $240,000 then that is half the assessment of our property for 5 years. Taxes made property hard to cash flow, could have put others out of business.
Mrs. Hammond [That is the way they were announced at the CDA, no first names, just Mr. or Mrs. so I missed some first names] says Dr. Martin Luther King birthday coming up, it is a celebration around people of color, she has worked at the Department of Justice, worked in city and a lot of places we are talking about justice, Martin Luther King would roll over in his grave to find out property is being taken from people of color and they are being put out of business. If someone came to you and wanted to purchase your home which was not on the market and offered half to three-quarters of the value would you say yes? She says they don’t need to answer that. [I missed some here as staff pointed out that their appraisal came in at $300,000 and they are currently offering $344,000] She says she seldom uses the race issue, but there is 5 acres across the street, enough to do the senior housing. But they are taking land from a person of color, the power and decisions still made up by the majority, those who sit in judgment and enforce the rules, this is not the right thing. All of these landlords deserve the assessed price that they are paying taxes on. They worked hard all their life, and people will take property their property. She is intentionally saying “take” and “steal”, how far has America and Madison come? They deserve minimum of assessed price – they take and steal form minority and given to the majority. This happened to her parents and happening now. Hope it stops. Always paid mortgage and taxes on time, no murders in their buildings like other buildings in the area, no drugs found in drug raids, every day he is at his buildings even Sat and Sun, not an absentee landlord, been extremely passionate about life and work, helped people buy homes, not just put money in his pocket, he got in the business cuz got discriminated against when they moved here, talks about legacy to his children. She says Bruer just siad he wants to give people what they want, he just talked about not wanting Jim Crow and segregation. Young people would like to see a person of color as a business man, someone who looks like them, a person of color. She ends with a quote – “only light can drive out darkness”, asks each of them to find light in your heart and restore faith in city government.
Levitan asks if she thinks they are doing this because they are black?
Mrs. Hammonds says that it is not the only reason, but putting 4 minority landlords out of business.
Levitan asks why they can’t just buy new properties?
Mrs. Hammonds says if I came to you and asked to buy house your house at half price, how could you go out and buy something similar?
Levitan says that the difference between appraisals and assessments are different if you just bought a property than if you have held it for a long time. He says unless they bought it at the height of the market, why can’t they sell and just buy another property.
Mrs. Hammonds asks how you could take $240,000 and go buy another 6 unit in this market? Market says it is worth more than that.
Levitan starts to argue more, Kerr says not argue with speakers.
Kerr asks about comment that assessment doubled.
Mrs. Hammonds says that they are saying that his belief is that it was hiked or doubled over the years with intent to generate revenue or run out of business.
Kerr says it hasn’t doubled has it.
Shimanski says yes it likely has.
Mrs. Hammonds says that they are offering an assessment from the 1990’s.
Mrs. Lucille, in answer to Levitan, said if paid off all mortgages and capital gains, they would end up in the hole based on the first offer they received. She was at a meeting like this not long ago and was asked on a little slip of paper asks if she was opposed or in support. She said that if everyone comes out good, and better off, then in favor. I feel like everyone come out better. Tenants came out in a good position – they are ok.
Kerr interrupts and asks which buildings.
She says 826, 830, 834 Badger Road.
Mrs. Lucille says tenants got a nice amount of money for relocation. If they budget they should be ok. They are not hurting or mad. City is getting what they want. Getting residential home or facility for seniors to raise value of community. Horizon is getting what they want, they get to make money. Only leaves the landlords, Hammonds, Bobos, Lucilles, they are the only ones not getting what they wanted. They went into business to make money. They named the building after grandmother and mother, planned on passing buildings down to their children, son is 17 year old black male, half of black men are involved in criminal system, trying to leave legacy so he sees hope. They have property, they were not looking to sell the property, they have been content, tenants are content, former tenants and current tenants are here. They didn’t come looking for this, we had a plan, you came knocking on our doors, we came looking for justice. In the future no one should be offered this. On one hand this is what they property is worth to pay taxes, when it benefits the city. The city has worn them down, they are now pleading to get the assessed value. They would never have sold, were making money on their property, would have sold for more than assessed if they sold. Justice is what she is looking for. We want not the kind of Just Us that Richard Pryor talks about. They want the same justice Fred Risser got. Mete out justice, look in consciousness, do what is right, if someone came to your door and said I want your house, I want you out to bulldoze it, here’s half the value and be on your way, how would you feel?
Kerr tries to get some numbers about assessed, appraised and offered value. The gets something handed out to her or pointed out to her and so she stopped asking and I didn’t get the information. If I get it later, I will try to post it.
Mr. Lucille says he initially, heard about project for 4 or 5 years, so it was not a surprise. What happened was a few months ago he sat down with CDA and discussed how it would go. That was October or November. CDA said they would be fair. Cool, he can understand that. When got first offer, he had heard it wouldn’t be too high, but is this your definition of fair? They got a second appraisal, he doesn’t believe in conspiracies – but the appraisals were based on foreclosed properties as a comparison. He thought, what was the guy smoking. On the city side, whoever reviews appraisals should have seen so many red flags, had to know it wasn’t going to fly. When someone from the city said they were going to be fair, on original offer couldn’t break even. The buildings were assessed at $790,000 for all three, second offer was $648,000 which is still $100,000 less, is that the definition of fair? When the city took 827 Hughes, they got assessed value. Minority people getting paid less. He talked to a dozen people from all over city that ask how can the city do that when assessed at more, the city has been taking taxes for years. He doesn’t have an answer to that. Are we asking too much? They want to buy other properties. Have you seen some of these foreclosed properties, they need a lot for work, it’s not a lot of fun to work his way back up. Buildings at $180,000 or 190,000 are a dump and needs to put a lot of work into it. I could, do I want to, not a lot of fun. If buy something at $260,000 or $270,000 it will be in working order but not at 180,000. [The question running through my mind is, with the banks the way they are, could they even get financing for a new building? They are being pretty tough on people trying to borrow. They don’t even want to refinance a building I’m involved with despite a 10 year flawless payment record and with us having 2/3 equity in the building.]
Levitan asks about state of market now, do you think the properties are over assessed?
Mr. Lucille says no. If compare, the buildings are running at $190 – 250K and they are assessed at $216K. That is not bad, but what can you buy for that? They would need to work on on those buildings. Assessments are not high, offer is low. Second appraisal was what the first offer should have been. Doesn’t want to bicker with them, but they are getting nickled and dimed. Economy and market not like 2 or 3 years ago, but not this is not California Arizona or Nevada. Madison has held on pretty good.
Mrs. Bobo – first of all, thanks them. Fred and I own 838 Badger Road and basically, we have actually gone into business with Lucille’s many years ago. Heard them talk about how they want the buildigns go to children as a legacy, same for them. Owned for 14 years, they go to the property over weekends take children to help maintain the property. They replaced the roof, put in hard wood floors, carpet, furnace, central air, they kept the building up, only to learn that over last few years the these buildings basically were labeled blighted. By labeling it blighted, this was a way to get access to their property and a way to turn it over to someone else, other than the city, to take ownership of the senior housing project. Just as the Hammond’s had mentioned, other properties could have been used. They do feel targeted. Wants you all to understand that we are going out of business. No offense to fellow housing providers, but they want more than the assessed value, this is putting us out of business and we are at a loss. Assessed value is mortgage and taxes, if take what’s left, where can they take that to purchase another property, that property will need more work. Appealing to you to take a look at the numbers, see how tenants, city, people working on project all winning, all compensated, except us. Even if look at assessed value, the money left over isn’t enough, thinks should get more than assessed, I think that is fair.
Kerr asks if they have an appraisal that shows it is worth more.
Mrs. Bobo says no. When you are looking at the offer, it should be more than assessed value to offset where it is going to put us.
Mr. Bobo, says they owned their property for 14 years, took property that wasn’t in best condition, but knew investment would pay off. This is allowing city to take the profit from us. This is our investment for last 14 years, children were told this will get you through college, now, my children are in high school, entering college, where do they turn? Where to they look, what do I tell them? Do I say the mean city has taken your future? Yeah your dad worked hard, invested many years in this, but one pen, one strike and it is all gone. Daughter had to write a paper about injustice for school. This is what she brought t up, did I stop her or influence her? No, you and the city did. She asks what is happening to these land owners, this injustice that has happened has influenced her. Young influencable mind has to ask where is the justice dad? Don’t like to say that things came easy to us and don’t expect them to come easy, I expect that I can fight things that I know are coming at me, I couldn’t foresee this happening. That the city by a stroke of a pen would wipe out all our investment and future goals and what we worked for. Individuals ask can I rent from you, I tell them I can’t rent any more, city owns the property, they put me out. Basically, we’re saying that what we are offered, doesn’t allow us to remain in business, doesn’t allow children to see profitable future, education is the key to anything especially in Madison area where most people are college graduates. They need that college degree if not more to compete and drive in Madison. Just wanted you to hear my argument.
Mr. Evanko said he was here representing Reverend Gee from Fountain of Life Church – says he moved to Madison 18 years ago, and Reverend Gee asked him to come, but he knows the landlords and would have come anyway. He says he knows he is white and male, which is obvious, he is an educator, pastoral staff and land owner. John Lucille was my mentor for being a landlord, he helped him buy property in poor condition and fixed it up, appraised value is low compared to what can get form it. CDA is an Authority, you can amend the offer you are making the landlords, they are providing housing in a difficult neighborhood for years, they take risks most won’t take, hoping his property will help him take kids to school. He says he doesn’t want to preaach, but they should “Do good unto them to whom it is due, when it is in your power to do so.” You have the power. Lucille has been a firefighter for 20 years, they live in community, pay taxes, Sherry Lucille worked in the public schools for 20 years, in poor neighorhoods and some that are a little better off, not well off. He has worked on and lived in John’s (Lucille) buildings, they have only been improved, it is quality housing, if you want to build something there, you have the right, but you need to give reasonable money to whom you take the property from. That’s in the US constitution. As a white man I need to work against system that is racist, Mr. Bruer, as I know you do, sometimes you need to stand up to things that don’t make sense, formulas made by banks and insurance companies are they best formulas they can come up with, but to do justice would be a minimum assessed value and appraisals should be a bit above. That would be the proper course of action. They have worked to build their business through difficulties and stridently to build a better life. He is here to encourage you, not to berate, but to encourage you to make a decision that is best for everyone. After making this decision, the decision will stand and have a life of its own. Be fair, do the right thing for these folks.
Mr. Dillard – says his name is Jerome, he is a former tenant at 826 Badger Road, he moved there at a pivotal point in life, they took a chance and rented to me. While he lived there, any issues with the building were taken care of, these landlords bring a valuable service to south Madison, not only did they serve us and his clients – he works at Madison-area Urban Ministry where they work with disenfranchised individuals – who the Lucile’s, Hammond’s and Bobo’s gave housing opportunities that were pivotal to get their lives on track. They were mentors in helping me become a home owner, after 7 years of living there. They modeled something to him that was valuable, this is bigger than the housing business, tgeur hearts are in it for the community, for people who need opportunities. They have mentored many, this room could be full of people they helped. I never thought I could own a home, they encouraged me, he has been a home owner for 6 years. They are positive and constructive members of the community. He came here because he was watching what going on, he knows the properties have been profitable, they have low vacancy rates, many tenants have lived there for years, and they really don’t want to move now, even with the incentives from the city. They want to stay, even tho the properties are in a community that is not a favorable place to live. He comes here to ask them to be fair with them. If someone came to me, when I purchased my home and told me I could have purchased at assessed value, that would have been a good deal. Seldom are houses sold at assessed value. Be fair with good people, who have provide positive valuable service to a community that needed it. Bobos have rented to several of his clients who could get their lives on track, decent housing is a real need in the city and these individuals who provided it for years are being pushed out, ask you to be fair. Not stand on soap box tonight, hope they have justice.
Duane Steinhauer – What these people told you about, is something a number of us have gone through. When you buy property that is distress, you are not buying real estate, you are buying a job. Hours have been put in to get the property to a point where they could be assessed as they are. There are 26 building inspectors there every day, some neighborhoods have an assigned building inspector. If something happens in a building today, you will have a notice by tomorrow. Even if you haven’t seen it yet. This situation of offering them the assessed value and taking of business opportunity value is – well you heard them – the question he would like to ask is with the eminent domain law they are working under, who will be the owner long term? An item on the agenda is that you are planning to pass this to a private entity. Not being a lawyer, but on edge of process, his understanding is that eminent domain no longer works unless city maintains ownership. He’d like to hear how that would work?
DISCUSSION, EXPLANATION
Levitan asks that before they go into closed session that Don Marx (City Real Estate) make a presentation about process, address the Steinhauer question and tell them what authority they have to modify offers on the table.
Marx says that Steinhauer asked if legal authority to acquire under eminent domain and then transfer the property. It’s in the statute. They had to do a redevelopment district, created by CDA in which case 50% of structures have to be found to be blighted by an independent firm – MSA is who does their studies. In the olden days, even if not blighted could buy a non-blighted property, that got changed, now need to meet certain conditions. Owner occupied single family homes are different. The city attorney office has reviewed it and they said this was ok. The law required them to do a redevelopment district, the Council approved a relocation resolution, then they could move to condemnation or eminent domain. We get an appraisal, review it, make an offer based on that. Once the owner recieves that offer, the property owners has 60 days to get own appraisal, they don’t have to get it, sometimes they will hold off when think it will go to court. All but one provided an appraisal. In this case, they has been some movement on our part. They sent a second letter with new price – the owners are not satisfied, met with them, include Mr. Tau and they provided us with he compensations they want to see. They are here tonight to discuss in closed session what the price is that they should get. If we low ball, it is done at a risk. The process is that if we give them another offer, then we give a jurisdictional offer which is the final city offer. Then they have 20 days to accept or reject or do nothing. If do nothing, then de facto rejection. At end of that period, if accept the offer, then they close and the owners get the amount in the jurisdictional offer. If not, they file a legal document with a check for the offered amount. Title to the property will be passed from owner to CDA, owners can pick up the check or they can keep it there if planning to appeal. A lot of people will not pick it up – they are afraid to prejudice appeal process. He says it doesn’t. Once get check, can go to court and challenge compensation, it can be done by the condemnation commission by county which usually doesn’t happen because it is not a binding decision on either side. Often goes to circuit court, trial with jury, jury doesn’t know the offer, they put the appraiser on the stand and the second appraiser and at end of day, they decide what the compensation would be. If award 15% or $700 more than our compensation, not only pay difference with interest, they pay attorney fees. If less than 15%, no attorney fees.
Bruer says there are protections for both parties in that.
There is exposure on the part of the city says Marx.
Levitan asks if testimony about assessed value will be admitted?
Marx – yes. Appraisers, assessment but not offers. Marx says he talked to an attorney who is an expert in this area, jury can award what is fair.
Levitan asks if appraisals under assessed value is unusual.
Marx says it happens much, depending on market it comes in over the assessment. The assessment usually lags the market, in this case, their assessment was the same two years in a row. He talked to the assessor, asked what the trend is. He indicated that they don’t have the numbers till April 16th, but they will trend lower, city wide.
Levitan asks where money comes from to the purchase. Marx says city of Madison budgeted $3M to acquire property, relocate tenants and demolish.
Levitan asks what the current offer is.
Marx says 2.16M.
Levitan asks assess value.
Marx says $2,282M in 2009, 265,000 off the assessed value.
There is some back and forth about the numbers.
Levitan asks if they have the authority to do what they think is right.
Marx says yes.
Levitan says that is good authority to have.
Marx quips that they also have the authority to do what is wrong.
O’Driscoll asked if they followed the process to the letter of law, not treat anyone different based on race.
Marx says yes.
Bruer asks about the city’s track record. [sounds like he is doing this to bully the owners]
Marx says in 19 years, only once gone to court, sometimes settled ahead of time. Marx says he is not saying that to intimidate. They go to court less than 1% of time – jury has awarded less than city provided, it can happen. Talks about someone who still owes the city $50K.
O’Driscoll asks what happens if a second appraisal is low and they are high.
Kerr asks about what is paying for staff time? Marx says that is part of the budget. They charge their time against it. Staff costs are very low on this project. The figured there were 48 tenants, so for budget max amount 480,000 but only 34 tenants, so if all get the maximum amount, that is 340K.
Someone asked what happens to owners while this is happening?
Marx says after the jurisdictional offer owners have 20 days, if not accepted, court proceeding.
Someone asked if the owners don’t get the money till sign off?
Marx says that court gets the check, owners can get it, most won’t do it because afraid it will impact the decision. He says they can take the check, cash it and has no bearing on your case at all.
Kerr says Marx not a lawyer, should talk to lawyer. Gray area.
Hammonds asks if there is a debt to a bank, there is three parties, who does the check go to?
Marx says that when deposit the check, anyone with an interest can get it, they get a joint check,
Kerr asks if check to everyone listed?
Yes, it needs to get settled with the bank.
AGREEMENT TO TRANFER THE PROPERTY THEY DON’T YET OWN TO HORIZON
Yes, they are agreeing to transfer this property that is in dispute to a private owner, before they settle on the purchase of these properties. They do it because they say they have to do it before they go into closed session. However, the County typically goes into closed session then comes out and still conducts other business.
Before they go into closed session they talk about accepting the proposal from Horizon. Bruer makes the motion, seconded by Alice Fyke.
Levitan asks about proposal where it says they would “appreciate” 40 section 8 vouchers? Does this have any impact.
Shimanski says they discussed that at the selection panel, not necessarily bound by it.
Levitan asks if it will go to housing operations.
They say it is not a commitment, will be discussed, will go to housing operations.
Dan Fitzgerald from Horizon is there to answer questions and in support.
Levitan says adoption does not answer question of what value of offers we make will be. This should follow, but cuz do that in closed session do this first. This says we will do it, but doesn’t say how much.
Levitan moves to go into closed session.
