George Lumley the Author Of The “Let’s Fix That” Series

Dear CCO Editor

What happened to $3,605,204.00 given to Evansville to invest? Was the investment a bust? Did the investment only generate construction and rehab of 17 homes and 86 demolitions? That is what this report dated January 4, 2016 indicates. https://drgr.hud.gov/public/downloads/reports/National%20NSP%20Production%20Report%20-%20Details

This money was given to us a long time ago, and it seems local government wants to forget it and move forward. I made some investments before the tech bubble burst and would like to forget them, but I also made a few that have paid returns. I keep track of these investments: daughter number one and daughter number two.

Not all investments have a monetary return, but the difference between spending money and investing money is that one expects a return of some type on investments. The City of Evansville received the authorization to invest $3.6 million from the federal government under the National Stimulus Plan (NSP) in 2009. This was part of the bailout where we taxpayers, through our government, bailed out Banks, GM and others by investing in those businesses. I understand many of those billions have been repaid.

Let’s say you and I were given $3.6 million to invest in housing for the economically disadvantaged with the goal of helping people with housing cost; fighting blight by reducing vacancy and stimulating the economy. How would we proceed? I don’t know how things were in 2009 in Evansville but there appears to be plenty of opportunity in rehabbing or flipping houses. Vacant houses needing a little repair seem abundant. Say we buy them at a steal, add value, and then resell just like the private sector does but subsidize each buyer with 20% of the cost. Remember, we don’t want to make money with this investment, just make a difference. If we stick with homes in the $75,000 range we could subsidize each buyer 15% or $11,250. That is a pretty good housing gift. With $3.6 million we could each take $300,000 for administering the program and provide ($3,000,000/$11,250) 266 subsidized homes. Why did the city only come up with 17?

The city invested the money for us in 17 homes! There are some demolitions, but no one can live on a vacant lot. The program documents indicate they had a “little” program income. To date as of 6/30/2015 the program income is reported to be $136,243.51. Important here is the date and the amount. Although this program started in 2009 and everyone wants to forget about it – it is not over. There is not much activity listed on the quarterly reports these days; mowing grass was the only thing I noticed. I have been trying to get information on this program from the DMD for almost 2 years. I started when I read the news report that reported DMD/Brownfields was to dispose of property acquired and land banked. Lately they have a different plan for us to fund an even bigger land banking operation. My detailed questions have been answered with responses such as “it was a verbal agreement”, “we are in compliance”, and “we decided to go in a different direction” to list a few.

Program income would include the sale of each property invested in. Why do the quarterly reports, http://www.evansvillegov.org/index.aspx?page=280, list $3,678,798.86 in expenditures and only $136,243.51 in income? Did Evansville give these homes away? Did Evansville actually spend $216,399.00 ($3,678,798.86/17) to subsidize each of the selected needy families?

George Lumley
Let’s Fix That