EDITORIAL: The cost of urban renewal is high and only worth it in the end

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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.

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diogenes
diogenes
8 years ago

Could not disagree more.

TWAS THE NIGHT BEFORE CHRISTMAS
Aurora, 2012

Twas the night before Christmas, and all through the town —-
all the citizen were wondering “what the hell’s going down”.
The folks down by AURA, had cut such a deal
to purchase Fan Fare, “it’s really a steal

Appraised by the appraiser, at thousands seventy-seven,
and bought by the City for four million eleven —-
the owners were snuggled asleep in their bed,
while visions of banknotes danced in their head.

The Mayor, as Santa, was dressed in his suit,
called to his reindeer to distribute the loot.
“On LrGare, on Monier, on Cleland, and Pierce,
on Broom, on Berzins, on Harlen and Roth!!

A full moon set the town all aglow,
reflecting above the new fallen snow.
Santa circled his City, adjusted his coat,
and considered the voters who had not a vote.

He called his lead reindeer, the Roth and the Broom —
“set her down on top, there’s plenty of room.”
But as they approached, Santa cried with a gasp,
Bolter! Bolter!! Bolter !!! the whole roof will collapse!!!

Santa flew around and found a good spot —–
in an old, crumbling, swanky, parking lot.
“I’ll do an inspection, take a quick look —-
then deliver the money, their profits to book.

Asbestos, was hung, from the roofs with great care —
Santa said, “man, I’m not going in there!”
benzene had bubbled all over his boot,
those scummy rascals gave not a hoot!”

Santa flew off, with fire in his eyes—
“those doggone owners will have a surprise.”
“With fines and penalties for each violation,
and taxpayers not subject to new taxation!”

“we’ll keep our City, though there’s a fight—-
Merry Christmas to all —- and to all, a good night

TisMichael
TisMichael
8 years ago

The city should walk away from this and never look back. In the study they paid to have conducted the “clean” value of the property is $4 million but as is it is only worth $77,000. If you were to read the valuation of the property they go on to explain that the cost of removing the asbestos and potential mold would be about $2.5 million and to demolish the building it would cost another $1.1 million. The cost of removing the Benzene from the ground is not included and would cost potentially more to have cleaned up. This would need to be done to make this property a “clean” property. i understand they want to redevelop this land into a viable revenue producing area but they really need to consider if they should be taking this on themselves.
Another little tidbit I found in the purchase agreement is where they would exempt the current owners from having to clean up the Benzene. They would be tackling that themselves and costing the citizens even more.
Would they be borrowing more than the original $4 million to make sure the groundwater remediation is done? Why are they trying to keep the citizens of Aurora out of the loop? Why are they not being honest about the real cost of this clean up? Who is the owner and why is he getting this sweetheart deal from the current city council? I know some of them are commercial realtors, are involved in LEED construction and other careers they may benefit from this kind of deception.

City council and the Mayors office need to come clean about the reality of the costs involved and how it will impact a city that is apparently so cash strapped they have to try to pass tax hikes almost every year. Where do they expect to get the money for the Benzene remediation?