LORAIN — A Lorain renter who had hoped to be a homeowner plans to walk away from a foreclosed property because he ended up bidding against the city for it.
But Tom Hutchinson said — after meeting Tuesday with city Service Director Robert Gilchrist — that the city should have stepped back once it learned that Hutchinson and his wife wanted it, even though he understands why the city didn’t.
“My feeling is the same, which is when the city became aware of a family wanting this property, they should’ve backed off,” Hutchinson said.
Hutchinson and his wife bid on a foreclosed property at 931 King Ave., Lorain, and found themselves in a multiple-bidder situation. Hutchinson said he was told the winning bidder was paying cash and acknowledged a cash deal tends to take precedence over someone who needs financing like he and his wife do.
A foreclosed home at 931 King Ave., Lorain, that was the subject of a bid between a private citizen and the city of Lorain. (Photo by Chuck Humel, The Chronicle-Telegram.)
As Hutchinson soon learned — after doing some Internet research and making some phone calls — he was competing against the city, which has $3.03 million in federal Neighborhood Stabilization Program funds to spend by the end of 2010. He wasn’t actually supposed to know who the other bidders were — a point Gilchrist emphasized.
“The system is designed where the entities are anonymous,” Gilchrist said. “If that system is breached in any way, how ethical is it?”
But Gilchrist also said that the city cannot withdraw if it learns there is a private citizen interested in a home because there is no guarantee the other bidder will get it.
“We can’t guarantee that individual is the highest and best bidder,” Gilchrist said. “The highest and best could end up being a slum lord.”
The city — which doesn’t know yet whether it was the winning bidder on the home — intends to buy more than 100 properties using NSP funds and either demolish them or rehabilitate them for resale. The city also can demolish the structure and keep the land for future use.
In addition to the funds the city already has received, officials also have applied for another $20 million for Phase II of NSP funding as a part of a group that includes several other local municipalities.
Hutchinson said he understands the NSP program much better now and also understands why the city didn’t withdraw its bid on the King Avenue home he and his wife had their hearts set on.
“We don’t agree with each other, but we understand each other’s position,” Hutchinson said, adding he and his wife will probably take a break from home-hunting and consider all their options.
“We need to re-evaluate our commitment to reinvesting in our community,” he said.
The Hutchinsons wanted that home because his wife’s parents live on that street and because it’s centrally located to a school, a park and the lake. Still, Hutchinson said he’s disappointed.
“We were born and raised here,” he said. “We’re both educated and it’s always a city’s dilemma of ‘What do we do to retain our young, educated couples?’ You need to allow them to purchase homes in nice neighborhoods.”
Gilchrist said he understands Hutchinson’s frustration, but he said the city will continue to try to spend its NSP funding regardless of whom they’re bidding against. He said he was pleased Hutchinson agreed to meet with him.
“I’m glad he better understands our program,” Gilchrist said.
Contact Alicia Castelli at 329-7144 or acastelli@chroniclet.com.
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