TAMPA - With Florida facing the nation's highest foreclosure rates, Mayor Pam Iorio and U.S. Rep. Kathy Castor announced in November 2008 that the city would receive $13.6 million in federal stimulus money to turn around one of Tampa's most blighted neighborhoods.
At a news conference in ramshackle Sulphur Springs, the two touted the so-called neighborhood stabilization money as an opportunity to clean up blocks of boarded-up, abandoned homes in a neighborhood that festered with garbage, vagrants and crime amidst the housing crisis.
"This is a good day," Joseph Robinson, president of the Sulphur Springs Action League, said that day. "We can turn this community around."
But 18 months later, the city has spent only a little more than half of its federal allotment. The remainder must be spent in two months or the money has to go back to the U.S. Department of Housing and Urban Development. City housing officials say they will spend the rest, although it will go to projects not envisioned as part of the original concept.
"We have no intention of giving back any of that money," said Cyndy Miller, director of the city's growth management and development services.
In 2008, Tampa's plans called for buying 40 foreclosed homes, then renovating and selling them to low-income and first-time home buyers; buying 40 foreclosed homes and tearing them down for construction; and buying, renovating and renting 30 single- and multi-family rental units.
In the end, Tampa and its nonprofit and private partners bought and sold only 28 houses, and tore down only 19.
With 58 percent of its money obligated, Tampa ranks 224 out of the 307 nationwide participants in the HUD's $3.9 billion Neighborhood Stabilization Program, according to HUD's figures. Pasco County has spent 97 percent, Pinellas County 87 percent, and St. Petersburg 68 percent. Hillsborough County has obligated only 45 percent.
Why the holdup in spending the money in Tampa?
"It was a lot harder than we thought to acquire the single-family homes," Miller said.
Private investors swooped in, sometimes buying dozens of parcels at a time at the courthouse, while the city moved cautiously to follow grant guidelines.
Those included purchasing 5 to 10 percent below appraised value, buying only bank-owned properties, and targeting a narrow geographic area.
"Private folks don't have to do that," Miller said. "They can just buy sight unseen."
Miller said the city investigated 900 properties in Sulphur Springs to ultimately land fewer than 50.
"It's not that we weren't trying," she said.
Sara Romeo, executive director of the nonprofit Tampa Crossroads, was one of those working with the city on finding properties to purchase.
"The contracts continued to fall through because we couldn't meet the criteria for the seller or it was overpriced," she said. "The banks had mortgages on the properties that were two or three times the market value."
On top of that, many required extensive repairs.
Miller said other governments that have been slow to spend their money faced similar problems, prompting HUD to loosen its guidelines by allowing properties to be purchased at just 1 percent below appraisal, expanding its definition of abandoned and foreclosed, and letting local governments stretch beyond narrow geographic areas.
"The feds made modifications," Miller said. "The original rules were just too restrictive."
Tampa turned its attention to other neighborhoods - West Tampa and East Tampa - and multi-family rental units instead of houses.
While the original plans called for 25 percent of the money to go to 30 rental units, the latest plans show at least 42 percent of the grant money will pay for more than 84 rentals in Sulphur Springs, West Tampa, East Tampa and Seminole Heights.
Among those is four units on Nebraska Avenue near Martin Luther King Boulevard bought by Romeo's Tampa Crossroads.
Plans call for putting another 18 apartments on the property - using $2.7 million in stimulus money or another source - for women and families with low incomes.
Romeo, a candidate for the citywide District 1 council seat, says she hopes to break ground in September on Eco-Oaks.
She says the project will create 237 construction jobs, two permanent full-time jobs, and take advantage of the latest green building techniques to save residents energy and transportation costs.
"The property itself is along bus routes, sidewalks, places for employment," Romeo said. "It's covered in oak trees,"
In the end, she said, the project will bring safe, stable housing to an area where none existed and create jobs, goals of the HUD grant as well as the stimulus package.
"The Neighborhood Stabilization Program, the concept is very good. What Washington wanted us to do with the funds is help the neighborhoods deal with all these foreclosures," Romeo said. "But because it was new, it took more time than everyone had hoped to get it up and running."
Janet Zink can be reached at email@example.com or (813) 226-3401.
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