Historic Dayton's Bluff houses sell for $1, plus city subsidy for repairs

One home's foundation is deteriorating, another's deck is rotting and lead-based paint coats many windows and doors in the five dilapidated houses on St. Paul's East Side.

Nonetheless, city staff members and concerned neighbors saw value in preserving the city-owned buildings in the historic Dayton's Bluff neighborhood. They recently made a last-ditch effort to sell the properties for $1, rather than tear them down. And developers have agreed to buy and renovate the homes — with significant financial help from the city.

The City Council, acting as the Housing and Redevelopment Authority, voted Wednesday to give developers $685,499 to help cover the costs of fixing up the old homes.

"It's such a huge step forward for historic preservation and affordable homeownership," Council Member Jane Prince said. She said the cost is "perfectly reasonable" to create five single-family homes and return the properties, which the city purchased six to 10 years ago, to the tax rolls.

The city has been trying to clear out its inventory of such properties for years. In 2013, St. Paul created the Inspiring Communities program, which uses local, state and federal funds to help developers rehabilitate buildings or add housing on vacant lots.

The goal of Inspiring Communities was to sustain neighborhoods and be a catalyst for other development, the program's principal project manager, Joe Musolf, reminded the City Council on Wednesday.

Over the past three years, the city's inventory has shrunk from 240 properties to 96. The places that remain, like the five Dayton's Bluff houses, are some of the most challenging and expensive to renovate, according to city staffers.

"We have moved 75 percent of the properties," Planning and Economic Development Director Jonathan Sage-Martinson said. "The 25 percent that remain, remain for a reason."

Many of those properties need additional work, he said, and construction costs have increased.

City leaders previously had capped the maximum subsidy for Inspiring Communities properties at $150,000. On Wednesday, they voted to increase that cap to $175,000.

Musolf estimated that $4 million in public subsidies would be needed to clear out the inventory of vacant properties, including the $685,499 for the Dayton's Bluff buildings. The city has about $3.4 million on hand to cover the costs and has applied for another $560,000 from the Metropolitan Council and the Minnesota Housing Finance Agency.

The $4 million, however, does not account for some properties for which the city does not yet have cost estimates, Musolf said.

The full cost likely will be closer to $6 million, Council Member Amy Brendmoen said.

Barbara McCormick, who lives in the city's historic Irvine Park neighborhood, is on the executive team at the nonprofit Project for Pride in Living. The organization builds affordable housing and is purchasing one of the Dayton's Bluff properties. McCormick said she has seen firsthand the importance of preservation in the "rebirth" of neighborhoods.

"I fully respect the idea that there's a limit and one needs to be conscious of the economic logic" of restoring aging homes, she said, but the craftsmanship in some of them cannot be duplicated. "Reaching and stretching a bit to preserve those places is an important part of what makes St. Paul St. Paul."

Jessie Van Berkel • 612-673-4649