Strange Use of Funds (cont.)
This is a Culver follow up on the Burr Oak post, Strange Use of Funds, from last September. I still vacillate between amusement at the absurdity of that project and outrage at the wasted tax dollars.
In any case, my bemusement extends to Culver and the thinking that went into the crosswalk from the southwest corner to the northwest corner of intersection of S.R. 10 & S.R. 17 at the end of Lake Shore Drive. First, it’s an absurd place for a crosswalk. As with some of those pointed out in the Burr Oak post, there is no connecting walk on the north side. Second, there are no storm drains or even right-of-way swales, so the condition pictured to the right, is pretty normal when there is any rain at all. Third, in the best of conditions, as shown in the picture below, the corner remains muddy after a rain, the walk is below the road and the surrounding grass, and it runs directly into a gas line marker and part of a stone wall!
This was a Town of Culver project, but I assume this design falls squarely within INDOT requirements. Culver just wanted a sidewalk going west to accommodate Culver Academy students walking to the Family Dollar. This extra little feature was no doubt a INDOT requirement, costing several thousand dollars in engineering and construction. Money spent to solve an non-existent issue, while not fixing real issues, i.e. flooding and obstacles, that make this even less useful, if that’s even possible.
I often wonder if others see these things. For any of you that have looked at this and scratched your head, did you also notice the weird hump in the sidewalk just west of this intersection? The rest of the new walk pretty much follows the curb grade, except for the 20′ +/- section right there that rises up 4″-6″ and then back down for no discernible reason. I suspect someone kicked a grade stake and no one noticed until it was too late, but that’s just a theory. There could be many other explanations. It just looks weird though…
Keep your eyes open people. You never know what you’ll run across. Best to just be amused, because impotent outrage will just make you crazy.
Gotta Laugh
Working on a project and needed some prices for a unisex restroom sign. I ran across the one to the right. I thought this was a amusing illustration of how ridiculous things have gotten. Just please wash your hands!
If you like it, and have a need for such things, you can purchase one from Amazon here.
Blight
It seems odd to talk about Blight and missed opportunities at the same time, but here we are.
I attended the SBERP RDA ( South Bend Elkhart Regional Partnership Regional Development Authority) board meeting last week and heard presentations of several properties that would benefit from the Lilly Foundation funds that have been pledged to them for blight elimination. As a sign of the times, all of them included some form of housing, as additional and better housing is the biggest perceived need at this time. The project that would be most recognizable to those in our area contemplated a multi-million dollar renovation and repurposing of the old Kamm and Schellinger Brewery in Mishawaka currently known as the 100 Center.
Several properties in St. Joe and Elkhart Counties were submitted. Marshall County was conspicuously absent… thus the missed opportunity.
Blight, as referred to when talking about communities, is generally a reference to systemic vacancies. But it is sometimes referring to buildings with deferred maintenance. I’m sure we all can think of properties in our communities that would fall under one of these definitions. Without even trying, I can name seven properties that fit this definition in Culver. I can think of half a dozen in Plymouth. I know of several in LaPaz and Argos. I’m sure those familiar with Bourbon and Bremen could name similar properties there. So how did we allow this opportunity to pass us by? Couldn’t we have put together something? We are the smallest county by population in our three county regional partnership. There would have been strong incentive to try and share some of the largess if we would have presented something.
We’re at a disadvantage in these things that we need to figure out how to overcome. The internal staff available in South Bend, Mishawaka and Elkhart to throw at these opportunities far outweigh the capacity of any Marshall County community. One Marshall County is being touted as a possible answer to this, but they couldn’t muster the effort to make a presentation as they are still fighting to gain acceptance locally. This is sad, as this could have been an easy win for them that would have shown their value.
Just from attending public meetings, I know of three properties in Culver, two in Plymouth and one in LaPaz that have asked for help and would have qualified for this program. A Marshall County regional submission could have been a combination of projects that would have helped all of our communities. A rail transfer facility was floated at the PIDCO annual meeting for one of Plymouth’s blighted properties. There were opportunities there.
Submitting something would have helped our larger region as well. It’s been clear from the feedback from the Regional Partnership that they need to use some of the funding in Marshall County, but if we fail to give them something to spend it on, it’s hard for us to complain. At some point this could be a problem when the region goes for additional funding. The down state entities want to see the wealth shared.
Some of the issue has been disorganization and some has been a lack of cooperation. Both should be things that can be remedied for the greater good. The sad thing is that most Marshall County residents don’t even know about this missed opportunity. It is likely that most of the property owners of the above mentioned sites don’t know they missed an opportunity. But by definition of the program, the projects must be put forward with government support. Unfortunately, I would guess that the majority of our elected representatives aren’t aware of this either. At least that’s my hope. If they knew and did nothing, that is worse.
There will be more opportunities like this coming down the line. We need to take steps so they aren’t missed too…
What’s in a name?
I’m pretty unhappy that I know the name of the shooter that attempted to assassinate former President Trump. If you don’t know his name, I’m not going to be the one to enlighten you…
My personal feeling is that it’s unconscionable that the press puts the names of such people out there. Law enforcement must, in the name of full disclosure, but it’s the press that gives them posthumous fame. My distaste for this is not because of concern for their families. Often their families are complicit, through ignoring red flags, if nothing else. My reasoning is that many of these individuals are doing it for that fame. How many other disturbed people see this and think, “At least I will be recognized”? What other heinous acts are being contemplated by disturbed individuals seeing this shooters name plastered across all media?
I knew the names of the killers from Columbine. I knew the name of the Boston Marathon Bombers. I knew the name of the Aurora, Colorado shooter and the man that shot up the music festival in Las Vegas. I know the name of Sharon Tate’s killer cult. I know the names of the brothers famous for killing their parents. I know the name of President Reagan’s attempted assassin. I know the names of JFK’s assassin and clear back to Lincoln’s assassin. I’m sure this is enough to bring many of those names to your minds… None of this information is valuable to us nor does it protect us. All of this could be the catalyst that causes a continuation of this murderous loop.
What’s in a name? For some people, this is their way of achieving their 15 minutes of fame. Let’s stop making that possible.
Cost of doing business
August 12, 2024
Kevin Berger
Commentary, Plymouth, Politics
Affordable Housing, Community, government, housing, Multi-family, Politics, Trends, Volunteering, Workforce Housing
The Pointe has been all over the news and social media lately due to the City of Plymouth deeming the property unsafe to occupy. This has forced the charitable community to jump to action to help the residents of the 16 units there. On top of the general low income housing shortage in Marshall County, there is the issue that this property was renting at the very low rate of $400 per month. To the best of my knowledge, this is not a subsidized housing site.
As has been described to me, the facility is a former nursing home, so the “units” are small rooms with half baths, i.e. a sink and toilet. They are set up with common (shared) men’s and women’s showers and a community kitchen. There has been some deferred maintenance that includes roof leaks leading to other damage. Pictures from the Pilot News indicate that there is some mold/mildew, but the level and danger from that would have to be professionally assessed.
The landlord is taking it on the chin for this. Again, I know none of the background, reasons for deferred maintenance, etc. But I do think the $400/month is an unworkable business model. So if all the work that is projected to be needed there is done, there’s no way it supports itself at that rental rate. Here are some numbers to start the conversation:
So lets total that up as if someone were to buy this this and puts it back the way it should. That comes to $626,000. I think this is probably a cheap number, but it’s a starting point for this discussion.
First pass: 20% down = $125,200 The remaining $580,800 financed per the above at 5% = $45,996 in loan payments, against fully rented 16 units x $400/month x 12 months = $76,800. Seems like a decent return of $30,804, but remember, right now, plunking that $626,000 into a government bond funds would pay in excess of 5%, or a yearly return of $31,300 with no risk.
But lets do a second pass the way a developer would look at this:
Now we’re at a loss of $28,706 despite some of those numbers being generously on the low side. Not including the time value of money, i.e. the $125,200 down payment would earn $6,350/yr at 5%. So looking at the first three numbers in the above list, it would take a rent increase of $173/unit to get to break even. Most banks won’t finance a break even project and most developers want to make some money and have some cushion for unforeseen things. And nowhere in there was any maintenance reserve savings for when the roof needs replaced again or whatever unforeseen problem comes up.
Granted, this is an extremely simplified analysis. It doesn’t take into account the benefits of depreciation, since those are only a benefit when there is profit. Likewise it doesn’t take into account any taxes on the theoretical income. It also doesn’t take into account any escalators for inflation. There would be a large spreadsheet that a commercial developer would run this through to make their analysis.
Minimum Rent to make this begin to work would need to be $700/month, when existing tenants say they are struggling with the current $400/month. Reality is more like $800 – $900 to get to comparable rates in Plymouth that make economic sense to cover the myriad of additional things that will come up in the renovation and the probably greater management, vacancy and bad debt costs that are likely. The significant age of the building warrants a large maintenance reserve.
But lets take a step back and do really, really rough math (because I don’t know their expenses) on existing conditions assuming with the initial investment of $126,000. Assume 20% down leaves $100,800 financed. Using the 5% interest rate number in the previous scenario, that’s $665/month = $7,980 per year.
This would give us a profit of $14,944/yr. There may be other expenses I haven’t put a number to and conversely there are those that would suggest the maintenance line items should be zeroed out, since maintenance has been less than needed. In any case, this is not a gold mine as it exists today.
This is the real life example of what I’ve said for years… I would rather have a leaky roof over my head than no roof at all. Some of these residents have been living that situation, but the City has (rightly) cited safety concerns that removed their leaky roof.
the $626,000 number is a low number for the renovation, but it’s an impossible number to duplicate that building. $626,000/9,840sf = $64/sf. New construction on a facility such as this would be in excess of $200/sf. It is also questionable that a new facility such as this would meet current zoning standards, though a variance might make it possible. Then there is the issue of where to put it. Even if built on the same site, rezoning would be required along with the variance. That would prompt the same NIMBY protests that Garden Court ran into with the two sites they considered for their project. Theoretically, Garden Court’s GC Horizons project should have been less objectionable as fully functioning apartments.
Plymouth as a community has some hard decisions to make regarding housing. Complaints are rampant about facilities like The Pointe, but solutions are few. As seen with The Pointe, just shutting down the problem facility without a viable alternative creates a different crisis. As seen with Garden Court’s GC Horizons project, those that step up with a solution are often disparaged. Mayor Listenberger is making efforts, but is getting a lot of pushback. It’s tough when there’s a cry to “Do Something!“, but it’s accompanied by a chorus of “But Not That!“… no matter what “that” is…
Some things never change… That’s just part of the cost of doing business…
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