GARY — City officials hope its demolition program, outperforming those in other Indiana communities, will help it snag a larger share of federal funds as Gary continues to knock down empty structures.
By the end of 2015, the state had paid claims for the removal of 270 structures in Indiana through the Hardest Hit Fund Blight Elimination Program. More than a third of those were in Gary. Because of a lag time between demolitions and when claims are paid, the actual number of structures removed is greater.
The latest report said more than 2,800 structures statewide have been approved to receive funding for demolition under the program.
The state had trouble using all the Hardest Hit money it received from the federal government, especially compared to states such as Illinois.
Gary, however, stands out from the rest of the state when it comes to using the funds to remove blight. It was one of the achievements Mayor Karen Freeman-Wilson pointed to during her recent State of the City address.
"Our team worked together and used the local data survey and other tools to develop a plan, so as the money becomes available, we can have a detailed reconstruction process," she said.
In February 2015, the city released the results of an 18-month survey done with the University of Chicago Harris School of Public Policy that concluded more than a third of the structures in Gary were deemed blighted, and nearly 6,800 were vacant.
Gary anticipated it would knock down 379 structures with the $6.6 million it was authorized to receive in 2015.
Actual demolition costs are expected to be between $4 million and $5 million, and the city hopes to stretch its allotment to knock down additional homes, according to Joseph Van Dyk, Gary's executive director of planning and development.
That doesn't count buildings Gary already has removed using other funding sources.
Other cities also demolish
In East Chicago, Building Commissioner Winna Guzman said 36 of 62 buildings have been demolished it was scheduled to remove with its federal blight-elimination money.
It also received about $4 million from the Regional Development Authority; when money in the city's Unsafe Building Fund is included, the city has taken down 350 structures since 2010, she said. East Chicago's Unsafe Building Fund money comes from payments for civil penalties, fines, collection of rental registration and special assessments.
Last year, Gary used RDA funding to help demolish the former Sheraton Hotel and remove asbestos prior to the demolition of Ambassador Hotel and Apartments. Tax increment financing money and its Unsafe Building fund also have been used to remove hundreds of abandoned structures.
By contrast, Hammond has knocked down only a couple of buildings with its federal Hardest Hit funds. It has demolished about 500 structures since 2008, primarily with $500,000 a year in casino money Mayor Thomas McDermott Jr. allocated to the city's demolition program. Bids to demolish four structures under the Hardest Hit program are set to be opened March 17.
Hammond's Corporation Counsel Kristina Kantar said the requirements associated with federal Hardest Hit funds mean it can take twice as long to knock down blighted residences than when using casino set-aside money.
"There are lots of requirements and lots of paperwork, which slows it down," Kantar said.
One requirement demands a separate agency, such as the Hammond Redevelopment Commission, acquire the property and then repurpose the land after demolition.
Maya Newman, a spokeswoman for the U.S. Department of the Treasury, said each state develops its own program rules and regulations, and any streamlining of requirements would be up to the individual state. State officials, however, said the U.S. Treasury Department issued "guidance" regarding the program.
Marino Solorio, East Chicago's Hardest Hit project manager, said the requirement to acquire the property added time to the process but was known up-front.
He said other requirements, however, were added after the federal grants were awarded, which also took time to implement. One of them included a "waste stream" report detailing how items within the structure were disposed of by workers.
Another requirement called for cities to say when property was leveled and land compacted; when top soil was added; and when it was seeded. He thought the requirement was added because of concern some communities were not converting the demolition site into a green infrastructure.
The city has become so proficient at meeting requirements that Guzman said officials may use E.C.'s submissions as a model.
The biggest delay, Solorio said, involve getting NIPSCO to disconnect utilities for property scheduled for demolition, which he said could take months.
Bureaucratic hoops not fatal, help neighborhoods
Van Dyk said there are bureaucratic hurdles, "and NIPSCO delays were quite problematic before they subcontracted utility requirements."
But Gary was able to work through the issues and hasn't had any problems over the past few months, he said.
And, he said, the city-ownership requirement "can potentially be beneficial if done thoughtfully."
He said as a result of that requirement, the city "can install green infrastructure and assemble larger tracts of land for potential redevelopment. While not solely for demolition, required acquisition can work to the city's advantage if blight elimination is a component of a larger plan and not just an end in itself."
Solorio agreed the federal program is worthwhile, despite the hurdles.
Proponents of demolition programs point to studies showing they stabilize property values and neighborhoods. Empty homes can create public safety hazards, as criminals will sometimes use them. In October 2014, the bodies of five women linked to alleged serial killer Darren Vann were discovered in abandoned Gary homes.
Van Dyk thought an advantage for Gary was the city already had started work on its demolition program before the federal money became available, while other communities may have started from scratch.
The state recently received another $28.5 million in Hardest Hit Funds, although how much will be allocated to eliminate blight still has to be determined.
"We're going after the money," Freeman-Wilson said at her state of the city address.
Other states get more but demolish less
Federal Hardest Hit funds were set up to help unemployed homeowners pay mortgages in 18 states hit hard by the 2008 economic downturn.
Indiana received nearly $222 million in the first two rounds of funding. It, and six other states, eventually were allowed to use some of the money to eliminate blight.
Another $1 billion will be released later, and one deciding factor will be the track record of how cities use those funds. Other states have done a better job utilizing the money, but only a minority use it to fight blight.
Illinois, which used 100 percent of its Hardest Hit cash, only allocates a small portion to eliminating blight. Indiana by comparison received permission in early 2014 to use about a third of its allocation for such a program.
As of January, Indiana had used about 66 percent of its initial Hardest Hit allocations. Because of that, it didn't get as much money in the current funding round as several states with similar populations.
While Gary received the lion's share of the federal blight-removal money in Indiana, it was far smaller than what some cities in Michigan received. Saginaw, Michigan, for example, received $11.2 million, even though its population is smaller than Gary's.
Michigan along with Ohio was one of the first to use the Hardest Hit money for demolitions and knocked down a far greater number of buildings under the program, according to quarterly reports provided to the federal government.
By the third quarter of last year, Michigan had demolished or removed 5,850 structures, including 672 in Saginaw.
Gary has knocked down a total of 211 structures with another 13 in process with the Hardest Hit Fund money, Van Dyk said. This does not include the 53 structures removed in 2015 with other sources.
On Thursday, the city's redevelopment agency awarded bids to demolish another 67 structures using Hardest Hit dollars. In addition to those, Van Dyk said the city will advertise for bids to demolish another 35 in the next 30 days, and 41 more in April. Another 12 homes are being deconstructed -- taken apart in a manner to save some features.
Van Dyk said once these are demolished, the city will seek release of the remaining $2 million of the $6.6 million allocated to Gary for elimination.
The city, however, will be a long way from demolishing the thousands of abandoned properties in Gary.