On the Block: City explores selling properties to help pension shortfall

Potential buyers had until Aug. 28 to express their interest in 64 city-owned properties put up for sale to raise money for the underfunded Police & Fire Pension Fund, but the amount of money that will be raised remains to be seen.

Evelyn Honea, deputy city administrator, said she doesn't expect a lot of money for the pension fund, maybe $100,000, but even that is pure speculation.

"That's not the value of what we'll receive from all the properties, but that's probably all that would be eligible to go there," Honea said. "Again, that's just a number I'm pulling out of a hat."

Getting a handle on holdings

Honea says the process of building the database began last year, when City Council members asked whether the city had any property it could sell to raise money.

"We realized we needed to ... create a database that would help us get our arms around what the city actually owned," Honea says.

When completed, the list included 900 properties. The city went through the properties one by one to determine which could be sold. The city was left with 64 sellable properties after eliminating those that serve or would serve a city purpose and others that could not be sold for various reasons.

However, some city-owned properties were acquired with money other than general fund revenues, so sales proceeds would first have to reimburse the original funding sources before any net revenue could be applied to the pension fund.

The properties listed in the city's interactive database linked to www.springfieldmo.gov range from residential lots where dangerous or abandoned buildings have been razed to remnants left over from storm-water projects, street improvements or rights of way acquisitions and three lots where sinkholes exist.

Several of the properties aren't likely suited for new construction, but Honea said they might be enticing to certain buyers.

"They might extend somebody's property next door if someone wanted to make his lot bigger," she said.

Development possibilities

New construction is a possibility, however, on the available lots where dangerous or abandoned buildings once stood, and that potential new development is a prospect that appeals to Bob Horton, executive director of the Urban Neighborhoods Alliance, a nonprofit community development corporation that promotes preservation and revitalization in five center-city neighborhoods, including Grant Beach and Woodland Heights.

A handful of the properties for sale fall within the UNA's boundaries, and putting them on the market not only opens the possibility of development but also puts the properties back on the tax rolls, Horton said.

"We would hope some (potential development) would be geared toward homeownership rather than investment properties for rental," he added. "But still, if a nice house is put on the property, then it would be good for the neighborhood."

City officials said 22 people had expressed interest in 31 of the available properties. In coming weeks, the city will review the properties that attracted interest and establish a value for them. Honea expects that decisions regarding the disposition of the properties would be made in the next month or so.

"As you know, because of budget we're really limited on staff right now, so we haven't taken the time," she said.

Meanwhile, the city is exploring options to bolster the pension, which is underfunded by about $200 million.

On Aug. 24, council voted 8-1 to put a 3/4-cent tax before voters on Nov. 3. The proposal was one of two recommendations from the Police and Fire Pension Task Force; the second called for a 5/8-cent tax.

At an Aug. 25 luncheon council heard the initial draft of a resolution aimed at bringing the pension up to necessary funding levels. Pending approval of the sales tax, the measures in the resolution include closing the pension plan to new hires and putting proceeds from ongoing lawsuits with telephone companies over back taxes into the pension fund if it is at a funding ratio of 80 percent or lower.