THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Wednesday, August 17, 1994 TAG: 9408170442
SECTION: LOCAL PAGE: B4 EDITION: FINAL
SOURCE: BY ESTHER DISKIN, STAFF WRITER
DATELINE: CHESAPEAKE LENGTH: Medium: 62 lines
The City Council reached into its rainy day fund for $296,000 to get moving on a plan to bulldoze decaying, World War II-era row houses in Campostella Square.
Hundreds of row houses in what was once called Foundation Park have been demolished to make room for nearly 300 new townhouses and apartments. About 350 cinder block hovels remain, only half occupied by steady tenants. Many others are used as hide-outs for vagrants or drug dealers.
Those vacant dwellings create a dangerous environment for the residents in the community and must be torn down, according to Edmund Carrera, director of the Chesapeake Redevelopment and Housing Authority, which is managing the long-range revitalization plan for the area. In the past few months, several fires have been started in the vacant units and a teenage girl was dragged into one of them and raped.
The authority asked the City Council for a $700,000 loan to complete a three-part demolition project. Instead, the council gave the authority a $296,000 grant for the first stage of the project, which won't have to be repaid.
In deciding to make a grant instead of a loan, the council acknowledged a growing crisis in its six-year promise to revitalize the decaying neighborhood. The project is awash in red ink, and details of the financial burden emerged during the council's discussion.
The city purchased the project in 1988 and gave it to the authority to operate and rebuild. Since then, the authority has failed to make interest payments totaling $768,000, according to Jay Poole, the city's internal auditor. His audit also shows that the authority is technically in default on $2.5 million in payments of interest and principal, which it is attempting to renegotiate.
The authority owes those payments to Maurice Steingold, the original owner of Foundation Park. Because the authority has failed to make those payments, Steingold could foreclose on major portions of the project, Poole said.
Carrera said that before any demolition begins, the housing authority will hammer out a written agreement with Steingold to prevent him from foreclosing on the land.
Under the original plan for keeping the project financially stable, row houses were to be gradually demolished to make way for new development. The rent from tenants in the remaining row houses was supposed to help cover debt payments on the project.
But Poole's audit shows that the project has operated at an annual loss for every year except 1988. The yearly deficits range from $160,000 in 1989 to a high of $206,000 in 1991, according to his figures. It does not show a deficit for the first six months of 1994.
The grant funds the first part of the demolition, which calls for bulldozing row houses along Pasture and Windy roads, and sections of Wingfield, Oxford and Wagon roads.
The council voted 7-1 for the grant. Councilman W. Joe Newman voted against the measure.
KEYWORDS: CHESAPEAKE CITY COUNCIL CAMPOSTELLA SQUARE
by CNB