Editor's note: This story has been updated with comments from MSHDA.
Six boarded-up houses along North Main Street in Ann Arbor still stand a full week after they were supposed to be demolished by the city.
Asked why the houses weren't taken down by a March 15 deadline the state gave the city in order to qualify for demolition grant funding, Mayor John Hieftje put the blame on the state.
"I've been extremely frustrated by the pace of things on North Main and the funding agency is MSHDA," Hieftje said, referring to the Michigan State Housing Development Authority, which agreed to give the city $96,000 to demolish the blighted structures at 700-724 N. Main.
"They told us we needed to get the houses down by March 15 and a check was coming," Hieftje said. "Since then, we've had very little communication with them. They're not getting back to us."
Cars drive past the boarded-up houses on North Main Street in Ann Arbor on Thursday afternoon. They were supposed to be demolished by March 15.
Ryan J. Stanton | AnnArbor.com
The Ann Arbor City Council voted last month to accept $96,000 in Neighborhood Stabilization Program funds from MSHDA, but Hieftje said the check never came through, and the city was planning to receive the money before going forward with the demolition.
"They apparently aren't adhering to their own deadline," Hieftje said of MSHDA. "The city was ready and willing to go forward, but it just hasn't worked out."
MSDHA spokeswoman Katie Bach relayed a somewhat different story on Friday, saying the agency worked hard to cooperate with the city on the issue.
She retraced the history of the NSP grant, saying the city was awarded $909,178 in 2009. Those funds had to be used by March 15 of this year, she said, and all but $60,749 was spent.
"The problem is the city didn’t make it a priority to demolish the homes in the 700 block of North Main until eight weeks before the grant was set to expire and there were issues with those demos because they were part of a failed development project, which had nothing to do with MSHDA," she said. "Ann Arbor was trying to fix failed federal HOME-funded development properties by using NSP1 money."
Bach said Ann Arbor still might be able to demolish the homes, because there will be a reallocation window opening soon, and the city can reapply.
"There are no guarantees, though, because it is a competitive process," she said.
Hieftje said if the issue doesn't get resolved soon, the city will just go ahead with demolishing the houses using its own money.
"People like me are frustrated about this, and I can only imagine the neighbors there are even more frustrated," he said. "I want those houses down, as do many others."
The houses originally were supposed to be demolished to make way for a $15 million affordable housing project called Near North, a project that is now dead due to financing troubles.
A spokesperson for Avalon Housing, one of the partners on the project, said in September 2011 the houses would be demolished soon. Months dragged on and that never happened.
Ann Arbor officials pledged last August to have the houses demolished within 45 to 60 days. Less than a month later, the development team announced the Near North project was dead.
In all, there are eight boarded-up houses from 626-724 N. Main that are owned by a limited partnership between Three Oaks Group and Avalon Housing.
The city has declared six of the eight houses dangerous buildings. That means the two southernmost houses will remain standing.
City officials said the property owners have waived all proceedings and admitted the buildings are dangerous, but they're uncertain if Three Oaks and Avalon are completely walking away from the property or what the plans are for the two houses that will remain standing.
The city was planning to pay for the demolition of the houses last year using a revolving blight fund established by the City Council. The city would have fronted the money for the demolition work and then tried to recoup its costs by putting a lien on the property.
Sumedh Bahl, the city's community services administrator, said the fact that the property went into foreclosure complicated matters. The city wasn't sure it would recoup its money.
So instead of using city funds for the demolition, the city has been counting on using grant funding from MSDHA. By going that route, the property owners wouldn't be billed.
City officials said last month the city previously received an allocation of $850,000 in NSP funds and in late 2012 applied for and later received approval for an additional $96,000 for the demolition.
Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529. You also can follow him on Twitter or subscribe to AnnArbor.com's email newsletters.