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Published: Tuesday, 5/6/2008

Slow market stalls Toledo riverfront condo sales

BY JC REINDL
BLADE STAFF WRITER
Only seven condominiums have been built along Miami Street. The remaining lots sit undeveloped because of what the developer last week described as Toledo's slow housing market. The unfinished project has flirted with insolvency and required financial help from Neighborhood Housing Services. Only seven condominiums have been built along Miami Street. The remaining lots sit undeveloped because of what the developer last week described as Toledo's slow housing market. The unfinished project has flirted with insolvency and required financial help from Neighborhood Housing Services.
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The Starboard Side development was once envisioned as the proof Toledo needed to show the suburbs there was still money to be made building housing within the city limits.

Proposed in the mid-1990s by three community groups, the $6.5 million project called for two-dozen upscale riverfront condominiums and 20 suburban-style houses along and just above the eastern bank of the Maumee River between the Anthony Wayne Bridge and the Norfolk Southern railroad tracks. It was billed as East Toledo's first new subdivision in 35 years without government subsidies.

But today only a fraction of what was planned along Miami Street - seven condo units that sold for $250,000 to $330,000 - has been built. The remaining lots sit undeveloped because of what the developer last week described as a chronic and straightforward problem: Tole-do's housing market.

In a twist from original plans, finishing Starboard Side could now depends on government subsidies.

"Ten years ago, we thought that marketing riverfront property, or property near the river, would be an easy task," said William Farnsel, executive director of Neighborhood Housing Services of Toledo Inc., which has taken the lead in managing the property.

Now, however, "with the way the real-estate market is locally and the collapse of values, there is no way you could fund a development with everything you need and be able to cover your cost."

The project was developed by Starboard Side Development Ltd., a three-way partnership involving Housing East Redevelopment Corp., Neighborhood Housing Services of Toledo, and River East Economic Revitalization Corp.

After years of construction delays, a 2000 groundbreaking, then more delays and disputes with the builder, Starboard Side built and sold the last condo unit of the seven in December, 2006.

The project has since flirted with insolvency and required financial help from Neighborhood Housing Services, Mr. Farnsel said. Without prospective buyers, plans to construct the remaining 17 condo lots are on hold.

"Starboard Side is out of money," he said.

Neighborhood Housing Services recently put aside earlier goals for market-rate housing and applied for federal tax credits in hopes of luring investors for a proposed 40-unit, three-story apartment complex for lower and moderate-income seniors age 62 and over.

The complex was slated for a vacant 3 1/2-acre parcel across the street from the condos that was once set aside for Starboard Side's unbuilt 20 market-rate houses.

"Why are we switching tactics," Mr. Farnsel said early last week. "Right now there is no market for single-family housing."

Starboard Side received yet another setback Thursday when the proposal received lower-than-expected grades from the Ohio Housing Finance Agency on a preliminary tax credit application.

The apartment proposal was scheduled to go before the Toledo Plan Commission today. However, that plan has been put on hold after last week's disappointing review, Mr. Farnsel said.

Life on that particular part of the river appeared to have been a double-edged sword in the state agency's eyes.

"While the reviewers liked the idea that this project was near the river, they didn't like that there were grain elevators upstream," said Mr. Farnsel who disagrees with the critique.

Starboard's cash crunch also has precluded the clearing of debris, the extension of a driveway, and adding all the planned landscaping. Several condo dwellers have become angry that their side yards still bear the look of construction sites.

"A lot of people won't invite guests over because they're embarrassed," said Fred Fogelman, who with his wife lives in a two-story unit. Neighborhood Housing Services talks "about building those across the street, but they haven't finished these."

Recent data on the Toledo-area housing market seem to support Mr. Farnsel's dour perspective.

The median sale price in East Toledo for a single-family house is now $17,500, or 50 percent lower than it was two years ago, said Chris Hall, vice president of the Danberry Co.'s office that covers East Toledo.

In Lucas County, 4,818 single-family homes were for sale last week, according to the area's multiple listing real-estate service, which does not include independent or bank listings.

Six years prior, there were 3,389 houses for sale, said Allen Green, president of the Toledo Board of Realtors.

Nevertheless, there is still less unsold inventory today than two years ago, which Mr. Hall attributes to investors "snapping up the distressed properties" to snag deals.

So Starboard Side's proponents continue to eye a different population - lower to moderate-income seniors.

"That's a market that's not going to go away," Mr. Farnsel said.

Neighborhood Housing Services is considering constructing another round of condos next to the seven there now. These new units would be built for moderate-income seniors, making them eligibility for tax credits.

"That might be one way to finish out the development," he said.

Lower and moderate income groups are an increasingly popular demographic for area developers, as the number applying for tax credits has been increasing, said Erin Biehl, spokesman for the Ohio Housing Finance Agency.

There were 11 such applications this year for Toledo and 164 for all of Ohio seeking the approximately $23 million in tax credits available statewide. That was up from seven and 96 applications, respectively, in 2004.

"As we see more homes go into foreclosure, people are needing to find places to live," Mrs. Biehl said.

Contact JC Reindl at:

jreindl@theblade.com

or 419-724-6065.



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