Ransom or relief? An effort by the city to buy the dilapidated Fan Fare building on Havana Street as part of an urban renewal project raises the question of the value of using taxpayer money to rehab properties and neighborhoods gone bad.
The decaying and unsightly remains of the former shopping pavilion at 333 Havana St. are a perfect case study for revealing the benefits and pitfalls of buying blighted properties to improve a neighborhood.
Aurora’s Urban Renewal Authority, governed by Aurora city council members, has agreed to pay owners of the Fan Fare property up to $4 million to clean up known environmental hazards and raze the building that sits in 10.5 acres. Two city lawmakers oppose the proposal, saying it’s tantamount to paying the owners ransom after holding the neighborhood hostage with the disfigured property for more than 30 years.
Adding to the controversy, the Denver Post reported this week that the city had appraised the building and surrounding land for $77,000 but wanted to pay the owner upward of $4 million. The Post story was misleading at best, avoiding the bottom line spelled out in city reports: If the 11-acre parcel were cleared and clean, it would be worth about $4 million — not $77,000. That doesn’t even buy a house lot these days, let alone 11 acres. Updated mitigation reports show the cost of cleaning the site before a sale would net property owner Herbert Buchwald somewhere around $2.5 million.
After looking closely again at the deal, the controversy isn’t whether the city is paying too much, it’s whether it should pay at all.
Here’s the short answer: If Aurora doesn’t buy this property, it will be many more years before the site is cleaned up. That’s what urban renewal is all about. These projects, which have created vital neighborhoods from virtual slums all over the metro area — including Denver’s LoDo and Arvada’s largest shopping district — are expensive and controversial, and they’re necessary. They focus on marginal neighborhoods where private commercial developers have no interest. The reason Fan Fare still stands in all its dilapidated glory is because it costs as much or more to tear the building down as the property underneath it is worth. Meanwhile, for the past five years, the city and businesses have worked diligently to bring new life to the Havana corridor. An example of urban renewal at work is the new Gardens on Havana shopping complex. It replaced the defunct Buckingham Square Mall at Havana and Mississippi Avenue, which was about to become a category-five hurricane of blight all by itself.
Not only is Fan Fare unsightly, it’s keeping the community from turning Havana Street into a tax-generating asset instead of a deteriorating liability. The thing has got to go.
The city can turn to condemnation to get the property, but eminent domain laws were created to protect landowners, not taxpayers. The city is trying in good faith to find the fastest, easiest, cheapest way to tear the building down and get something new built there. As far as simply forcing Buchwald to demolish the building as a nuisance, it’s possible. But more likely, it would take years and hundreds of thousands of dollars in legal fees to make that happen, and then the property would become encumbered with the price of the clean-up, which local taxpayers would have to fund.
This deal isn’t pretty. No urban renewal deals are. Property owners don’t like them, and neither do taxpayers. But in the end, the city will likely recoup the full purchase price of the land. Rather than create just $11,000 a year in property taxes, this site could easily be home to businesses generating millions each year in sales taxes. But someone has to tear down Fan Fare first.