Why Butler County had to give back $620K awarded to demolish blighted homes

The Butler County Land Bank was forced to return more than $600,000 in state grant funding awarded to demolish vacant and blighted homes, a large portion of which was left over because of Middletown’s low use, county officials said.

Butler County was awarded $4.3 million in Neighborhood Initiative Program monies beginning in 2014 that targeted preventing foreclosures and stabilizing local property values through the demolitions. .

Hamilton and Middletown, the county’s two largest cities, had until Dec. 18 to spend $3.2 million. They didn’t spend $620,839, which will be returned to the state, said Butler County Treasurer Nancy Nix, who is president of the land bank board.

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So far, Hamilton has acquired, demolished and been reimbursed for 160 properties, while Middletown has done the same for 35.

“Had we known that they weren’t going to be an equal partner then we could have included the townships,” Nix told the Journal-News. “Like Fairfield Twp. or St. Clair Twp., those are contiguous townships to Hamilton, which are Hamilton’s gateways. So it could have been used by Butler County or the townships. There is a consequence to this money being returned to the state in that we weren’t able to use it elsewhere and I think that’s the bothersome part.”

Middletown City Manager Doug Adkins told the Journal-News his city has been razing ramshackle homes according to the city council’s direction, as part of a plan they are developing to transform the city’s housing stock. He noted the city knocked down more than 500 blighted homes during the Great Recession but that it can’t act on others identified in the grant application.

“The vacant, blighted houses in those neighborhoods are mostly down. The remaining blight in those grant-eligible neighborhoods is with occupied houses, which are not eligible under this grant,” Adkins told the Journal-News. “I fully understand the county’s and the land bank’s concerns in returning grant funds, but Middletown only had so many qualifying properties to work with.”

Middletown acquired 36 properties between October and December but not in time to receive the reimbursement.

“We wanted to assist the land bank in their endeavors to the extent it wasn’t in conflict with our ongoing housing goals and discussions,” Adkins said.

Nix said Hamilton’s assistant law director Kathy Dudley submitted Hamilton’s grant application estimating a per-demolition price at $25,000, but the true cost has been closer to $13,000 per demolition. That led to more demolitions for less money, which also led to some returned to the state.

She said the land bank can still compete with other state jurisdictions to get the $600,000 back and there is just over $1 million left to spend on more demolitions this year. The county also contributes delinquent tax assessment collections funds toward the blight busting effort.

Dudley was hired by the county commissioners for the newly created position of community stabilization administrator last fall. She had been the point person for Hamilton working on land bank business. Commissioner Don Dixon at the time said they were hoping Dudley could save some of the federal funds, or at least ensure they are not wasted again.

“Hamilton has done a pretty darn good job of meeting the demands and using the dollar resources to get stuff torn down,” Dixon said. “Middletown has been lagging behind. I attribute most of that push from Kathy Dudley for Hamilton.”

Dudley — who has no control over what Middletown decides to do — said she will be working hard to make sure they don’t forfeit anymore funds.

“Moving forward we will assist both cities to ensure that grant dollars are spent efficiently so that we don’t waste money,” she said. “But also to maximize the benefits of any grants the land bank receives.”

Commissioner T.C. Rogers said the two cities had an equal need for the funds but Middletown had a different process and for “whatever reason” they weren’t as successful as Hamilton.

“We had a grant which was going to be used by Middletown and Hamilton and Middletown had made a plan to use theirs and for whatever reason they were not able to complete their plan,” Rogers said..

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