The first foreclosed house has been sold.
There are hundreds of houses to go, but Schenectady Mayor Gary McCarthy took great pride in announcing that the program has started to work.
He had planned to solve the city’s tax collection problem and some of the blight by seizing houses from landlords who have not paid taxes for years, getting contractors to bring those houses up to code, and then selling them to owners who would live there.
The big question was whether anyone would actually buy the houses. But a contractor looked at an overgrown building off Union Street and decided to not only bring it up to code but to move in.
Gary and Lynn Pappas will buy 14 Myers Alley, which the City Council agreed to sell them Monday night.
Renovations to the badly damaged building will cost about $75,000. The Pappases plan to turn the three-story building into a two-family house and rent out the second unit.
Myers Alley is near North Jay Street, known as Little Italy. There are many abandoned and blighted buildings in the area, but it’s also been the focus of recent residential development and several badly damaged buildings have been demolished.
McCarthy said the Pappases, who are moving from Colorado, know what they’re getting.
“They’re going in there with the attitude of challenges in the neighborhood and they understand one family can make a difference,” he said. “They see it as potential. There’s other activity going on there, on lower Union Street, Little Italy.”
The process of selling the foreclosed houses has gone far more slowly than McCarthy had originally hoped.
Title issues and court challenges slowed down the foreclosures, but the city has now seized about 160 properties and inspected most of them. Another 7 to 10 properties will soon be available for contractors to evaluate, McCarthy said, while more than 200 other properties are in the foreclosure process.
Contractors will bid on the jobs, fix up the houses, and oversee the sales.
“It’s a slow, methodical process,” McCarthy said. “Believe it’s going to have long-term benefits.”
City officials are also working on a marketing campaign for the houses.
In other business Monday, the City Council decided not to allow the Downtown Schenectady Improvement Corporation to increase its fee on downtown property owners.
The DSIC collects a fee each year to fund business promotions, decorations, a cleaning crew and other amenities. The agency asked the council for permission to increase its budget by $10,000, which would have equated to a small fee increase for some of the many businesses and property owners.
Some mom-and-pop stores complained mightily because they would have been unduly affected: DSIC changed its formula and would have increased the fee only for large property owners, but many of those owners rent out storefronts to the smallest businesses. That meant the fee could have been passed on to those least able to pay it, and many of the small Jay Street business owners signed a petition urging the council not to raise the fee.
Councilman Carl Erikson met with affected owners and negotiated with the council to cut $10,000 out of the DSIC budget so the fee would not be increased.
“The DSIC does a great job at promoting downtown,” he said. “But at this time, the economy is challenging everyone. It’s not the right time. You’ve got to stretch the dollar further and I think the DSIC can do it.”
It’s up to the DSIC to decide what specific expenses to cut.
Executive Director Jim Salengo said the change won’t devastate the agency.
“It was only $10,000,” he said.
The fee increase was needed mainly to prepare for cost increases in future years, he said.
“They’re looking not only at this year, but at future years,” he said. “Some of our grants are uncertain. They were just trying to do something now, for the first time in six years, for the future.”