By Chinta Strausberg, Gary Crusader
Gary Mayor Karen Freeman-Wilson has come under recent criticism over rumors the city is being sold out to white interest groups by way of former Chicago Mayor Richard Daley and architect Peter Ellis. The progress being made in Gary has come as a result of simple introductions and innovative ideas despite limited financial resources
The mayor said she has an overall vision involving non-performing assets, which once removed will create a more inviting opportunity for investors. When she came into office in December of 2011, the mayor found out that “at least 50 percent of the property in the city was not performing.” Meaning that taxes were not being collected and in many cases they were not being maintained.
In 2012, Freeman-Wilson partnered with former Chicago Mayor Richard M. Daley, who is now a Distinguished Senior Fellow at the Harris School of Public Policy at the University of Chicago. Together they established The Gary Project, which for Gary, is a light at the end of a tunnel. Its goal is to revitalize Gary.
Daley is also involved with the MaiaCo Group. They were the only viable respondent to an RFP issued by the City to find equity investors willing to provide the funds to demolish and clear title, as well as bring in potential developers. Freeman-Wilson said the agreement the City has with Daley has always been that he would not be an investor nor would he profit from his relationship with the city. His effort is to attract investors, but he would not share in the upside. He has held true to that agreement.
“He introduced Mr. (Elzie) Higginbottom to the Gary Airport and Higginbottom with his own dollars developed this beautiful hangar. Mayor Daley was not involved in that deal at all. Any work that has come as a result of the University of Chicago, he has brought his students, but he was not a profiteer or involved in any of that and that is going to be the case now,” she said.
No relationship is without its challenges. Peter Ellis, an architect and former partner of the MaiaCo Group has a video on YouTube in which he is quoted as saying “First of all we are going to partner with the City over the entire City. Our first task is not to build the City, it is to tear the City down.” This video sparked controversy as it described a Revitalization Plan that could be misinterpreted because it described a plan to literally demolish the city for green space with little or no accountability by the equity partner to the City. It also described a profit split between Gary of 80/20. He is no longer a partner with MaiaCo and there is no signed contract with a partnership to revitalize Gary with an 80/20 split.
While some people were capable of paying their taxes, others walked away from their property, while still others were speculating and not being responsible landlords.
“We found that of the speculators we discovered there were five people who were not paying taxes. We were able to identify them and on one of them we intervened on the pending bankruptcy because he was a serial filer.”
Explaining, the mayor said the man would buy property but when it was time to pay taxes, he would file bankruptcy. “It had a very adverse impact on the city” which is why the city intervened and took him to court. The judge barred the man from filing bankruptcy—an act she called “significant.”
She then went to the General Assembly asking legislators to pass a bill to prevent people from selling property on tax sales but had not been purchased. The mayor wanted the city to seize the property that could be developed by commercial brokers. The lawmakers gave Gary an expedited process to acquire the property if it has been on the tax sale a number of times. “That was a big victory.”
However, the mayor said there is another challenge. “Another part of that process was to get permission from then Department of Treasury for Indiana to do what had been done in Ohio and Michigan to use the Hardest Hit Fund originally directed for mortgage foreclosures to get them to allow us to use it for demolition.” The Indiana Housing Finance Authority also had to sign on.
That’s where Daley’s students provided an innovative idea. She wanted them to look at the issue of vacant and abandoned property. “A number of things that came out of those students’ work was the Local Data Survey that Detroit was doing to actually count the parcels of land they had and to grade the property where it existed.”
She said the students counted the parcels of land in Detroit. “They gave us that same product so that we could do it in Gary.” The mayor said it took her two-years to find out what has never been done before in Gary. There were 21,000 parcels of land of which 6,900 were vacant and abandoned. It also gave us the ability to grade it and that idea came from the students.”
The mayor said with that data they went to the state of Indiana and used that figure of 6,900 vacant or abandoned parcels and argued Ohio and Michigan are using Hardest Hit dollars to demolish properties.
The mayor argued that this should be done in Gary as well. She reminded them that “they used only 15 percent of that allocated money for mortgage foreclosure and they had the possibility of losing those funds if they didn’t use it. “That is when they started the Hardest Hit Fund setting aside $18 million to $20 million. Gary, which was in the first group that was eligible for the first $10 million. Gary received $6.6 million.
“We are trying to get property to perform. We want people to pay taxes and keep up their property,” she said explaining it enhances Gary’s budget.
But even with the Hardest Hit money, the mayor said that was not enough so she began looking for a partner willing to invest their own money as a partner to the city. They would become a joint developer while allowing the city to retain title to the land.
“The plan is that the private group and the city would have a public/private partnership and at some point they will invest these dollars to make this property available for development. They will give their initial investment out, and any profit that is gained will be split between the city and the private partners and Mayor Daley will not share in that split,” she said. The mayor said that split is still being negotiated.