Monday, February 19, 2001

Builder wants $200K more from city

Developer already got $522K for homes

By Ken Alltucker
The Cincinnati Enquirer

        After getting $521,814 from Cincinnati to build five homes on Sycamore Hill, Dorian Development wants the city to kick in $200,000 more to complete the job.

        The total subsidy of $721,814 would amount to $144,362 per home — a request that is “indefensibly high,” said Peg Moertl, director of the city's Department of Neighborhood Services.

        But Dorian officials say they need the extra money because of engineering troubles encountered while trying to develop the Dorsey Street hillside lots.

        If city staffers persist in denying the extra funds, Dorian will “appeal to our friends on (Cincinnati City) Council,” said Ralph Bawtenheimer, Dorian's co-owner.

        He said his company should get credit for sparking several land sales, smaller developments and rehabilitations of dilapidated homes in the impoverished neighborhood.

        The hillside with snapshot views of Cincinnati's skyline is perhaps the most underdeveloped land with a view of downtown.

        Several council members say Dorian is asking too much.

        “It's absolutely outrageous,” Councilman Pat DeWine said. “You are helping fund houses for rich people on the very end of a dead-end street.”

        Mayor Charlie Luken, who has made developing new housing a cornerstone of his administration's plan to stem the flood of city residents to the suburbs, said developers cannot expect Cincinnati to bail them out of all difficult housing projects.

        “We kept our commitment to them,” Mr. Luken said. “We just cannot fix every problem.”

        Developers say they need the city's help to build new homes in poor neighborhoods because the projects are usually riskier and costlier. They need to persuade lenders and buyers to take a chance on neighborhoods that are trashed with litter, drugs, crime and other problems.

        The city's payoff is luring middle- and upper-income residents. That's a high priority for Cincinnati, which lost 9.2 percent of its residents in the 1990s, a faster decline than all but six U.S. cities, according to U.S. Census Bureau estimates.

        Dorian already has sold the homes for an average price of $320,000, flushing the hillside with optimism as other developers put together plans for new construction.

        Joe Gorman, who plans to build 14 houses on nearby Mulberry Street, said Dorian's project affirmed his belief that the neighborhood is ready for market-rate housing. The city awarded Mr. Gorman's project $180,000, which amounts to a subsidy of $30,000 for each of the project's first six homes — much lower than Dorian's Dorsey Mews subsidy.

        “They are one of the players on the hill that are moving market-rate housing,” Mr. Gorman said. “I thought it was definitely a step in the right direction.”

        Dorian, Mr. Gorman and a series of smaller urban pioneers need the city's help to recreate the hillside neighborhood, said Dorian's Realtor, Denise Guiducci, vice president of Sibcy Cline Realtors.

        She said she was unaware that Dorian asked for another $200,000 but thinks it's justified because of the project's difficulty and positive impact.

        “Nothing happened prior” to Dorian's deal with the city, Ms. Guiducci said. “All of the sudden we have this project and things start happening.”

        Ms. Guiducci said Dorian's development has sparked the neighborhood. She said two dozen homes and properties sold over the last year compared with 23 during the previous two years combined. Average prices jumped 37 percent and the homes sold much quicker.

        Pauline Van der Haer, who controls Dorian, said her company will lose money without the $200,000. It can't stop the project because Dorian already has sold the homes.

        Council members worry that other housing projects will suffer if Dorian gets the extra $200,000. The city has a limited pool of housing money.

        “I thought it was going out on a limb the way we did,” Councilman Jim Tarbell said. “There is a limit. I think it will be difficult to justify funding this.”


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