Wednesday, March 02, 2016
Should Easton RDA Help Absentee Landlords?
Panto said his long-term goal was to provide homes for everyone among the working poor, and mentioned that the Easton Redevelopment Authority (RDA) is helping achieve that goal by picking up old vacant properties, rehabbing them, and then selling them to first time-home buyers who are at or below 80% of the median income in Easton.
Although that may be Panto's goal, that's not what is happening. Since he has become Mayor, many of the RDA sales are going to out-of-town landlords who form LLCs, not first-time homebuyers. I've counted over 20 of these corporations.
Let me give you an example with a West Ward property located at 1234-38 Chidsey Street, a collection of three row homes. It was owned by Easton and turned over to the RDA. In 2008, the RDA conveyed it to "Cimcom Properties" for $10,000. That company ended up giving the property back to the RDA in 2010. Two years later, the RDA sold it to a Danielsville couple masquerading as "Ricca, Inc." for $55,000. Yes, that's $55,000 total for three units with rehabbed exteriors, gutted to the studs inside and ready for easy rehab.
Just one month ago, "Ricca, Inc." sold the Chidsey property to Long Island landlords for the tidy sum of $232,500. The Danielsville couple with the corporate name turned $55,000 plus rehab cost into $232,500, probably doubling their money.
The only persons I see making out here is this couple, and now, a Long Island landlord. This is classic real estate speculation.
Unfortunately, this is only one example.
It's a great way to use public funds to keep the working poor in their proper place.
Addendum: The realtor involved in this deal was Michael Brett, which I find fascinating. Brett was at that time employed by the RDA as a "Community Development Specialist," but apparently no one thought there was a conflict with him pocketing a sales commission as a realtor for RDA properties. In fact, Panto rewarded him with a slot on the Zoning Hearing Board.
Two years ago, Brett and Simon Silk Mill developer Mark Mulligan teamed up for a side business and formed one of those mysterious corporations to buy two fire-damaged South Side properties at well below their market value. They could use money escrowed with the City for fire restoration. I blew the whistle and ruined everything. An angry Panto vowed he'd never comment here again.
Until he did.