Published: November 10, 2009 10:13 pm      

No answers for Linden Meadows

Redevelopment Commission seeks audit, Community Housing books

The City of New Albany is still searching for a strategy to deal with the failed Linden Meadows housing development.

Though the city doesn’t own the property, money was shifted to the New Albany-Floyd County Community Housing Development Organization for rehabbing the houses moved to Linden Meadows following the expansion of Floyd Memorial Hospital and Health Services.

The city also donated land to the project, as well as cash for home ownership classes administered by Community Housing. The houses were meant to be sold to low-to-moderate income homeowners.

The Indiana Housing and Community Development Authority, or IHCDA, halted work at Linden Meadows last summer due to concerns over the quality of construction work.

Since then, PNC Bank filed a lawsuit against Community Housing calling for the organization to pay back a defaulted $500,000 loan. The state — which has a second mortgage on the property — offered $300,000 to PNC for Linden Meadows but was turned down.

Deputy Mayor Carl Malysz met with IHCDA officials in Indianapolis last week and said the state is no longer negotiating with PNC for the property.

Further complicating the situation, Community Housing leadership have stated the organization’s board will likely dismantle due to the debt. Malysz said the city administration does not want to wash its hands of Linden Meadows.

“We don’t want to see Linden Meadows remain in this perpetual state of abyss,” Malysz said during a New Albany Redevelopment Commission meeting Tuesday.

But commission member Terry Ginkins wants answers — mainly how Community Housing spent $1.1 million in loans without finishing the houses while still building other homes in the city.

“I’m just wondering how all this happened,” Ginkins said.

In forming a plan, Malysz said a key step will be to obtain all of Community Housing’s financial records. He blamed some of the setback on lawsuits filed by property owners who live near Linden Meadows.

Several residents tried to stop the development at its onset, though their lawsuits were defeated in court.

Money was also spent by Community Housing to install infrastructure such as sewer lines, and to pour concrete foundations for some of the houses, Malysz said.

Irving Joshua, president of the redevelopment commission, called for a complete audit of Community Housing’s books. City Councilman and commission member Kevin Zurschmiede questioned why the city would spend money to rehab Linden Meadows while New Albany is plagued with several other foreclosed homes in need of repair.

Joshua countered initial support by the administration and commission for the development means the city has a degree of responsibility in Linden Meadows.

“We’d be walking away from something we were very instrumental in getting started,” he said.

Engineers hired by the state have formulated options for fixing Linden Meadows to make it marketable in the future. Malysz said he will meet with City Attorney Shane Gibson to work on what the city can legally do to turn the development around.

He defended the lack of action to this point by saying the city should not throw money at the problem until having a better grasp of how the situation may unfold.

“We’re in a weird position here,” Malysz said.



In other news

The commission approved donating up to $5,000 to Floyd County VFW Post 3281 for an Internet cafe at the East Fifth Street location.

The cafe would be available for families of soldiers serving overseas to contact their loved ones via computers. The money is coming from the commission’s public service activity fund, officials said.