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Friday, August 16, 2013
Ind. Gov't. - Two Gary Indiana stories
From the NWI Times, this story from Joseph S. Pete headed "Gary has nowhere near the debt of bankrupt Detroit." Some quotes:
GARY | When Detroit filed for the largest municipal bankruptcy in U.S. history, it called up recent memories of Gary going before the Distressed Unit Appeals Board year after year, and led some to wonder if the city U.S. Steel built could end up just as broke.And from the NY Times yesterday, a story by Steven Yaccino headed "A Chance to Own a Home for $1 in a City on the Ropes." Some quotes from the long story:
The Steel City has a lot in common with the Motor City. Both are largely one-industry towns in the Rust Belt.
Both are less than half as populous as they were during the 1960s, when factory jobs were still plentiful. Both have since suffered from crime, blight and buildings run-down enough to be compared to ancient ruins.
But unlike Detroit, Gary has little debt on the books.
After years of steep cuts and sweeping layoffs, Gary owes less to creditors than many towns a fraction of its size, according to the Indiana Department of Local Government Finance. The Steel City currently has about $8.4 million in outstanding debt for bonds, loans and leases, as well as utility and redevelopment projects. That's less than every other city and town in Lake County, except for New Chicago, Schneider and Winfield.
Last year, the state agency started collecting and publishing municipal debt figures online so the public can see how much local governments are borrowing, how much they owe in interest and how they are repaying the debt.
Only two cities in Indiana currently have less total debt per capita than Gary, according to Department of Local Government Finance records. One is Sullivan, which has a population of 4,200 and a single park. The other is Alexandria, which was designated "Small Town USA" by the Department of Defense in 1943 and has only added about 300 more residents in the seven decades that have since passed.
Mayor Karen Freeman-Wilson said the city's finances have been improving, despite a 55 percent reduction in property tax revenue brought on by the statewide tax caps. The city has cut expenses, avoided indebtedness and reduced Gary's overall debt burden significantly over the last several years.
Officials say that a third of the houses in Gary are unoccupied, hollowed dwellings spread across a city that, like other former industrial powerhouses, has lost more than half its population in the last half-century.
While some of those homes will be demolished, Gary is exploring a more affordable way to lift its haggard tax base and reduce the excess of empty structures: sell them for $1.
The program, announced in June, will offer Gary residents a chance to pay less for a house than for their morning coffee, as long as they meet a minimum income threshold (starting at $35,250 for one person) and demonstrate the financial ability to bring the neglected property up to code within six months. Those selected would have to live in the home for five years before receiving full ownership.
Nearly 400 people picked up applications on the first day they were available. After an extensive preselection process, the city will choose 12 out of 25 finalists in a lottery next month.
“My target would be to sell 50 houses a year,” Mayor Karen Freeman-Wilson said. “We’re getting these people to contribute as taxpayers. They can be part of the group that moves out, or they can be part of the group that invests.”
Efforts to revive distressed postindustrial cities across the country are being watched closely since last month when Detroit became the largest American municipality to file for bankruptcy. Indiana is one of 21 states that does not allow its cities to file for bankruptcy protection, according to the National Conference of State Legislatures. While Gary does not carry the same debt load that led the Motor City into bankruptcy court — officials say its liabilities are around $8.4 million compared with Detroit’s estimated $18 billion — the decline of both manufacturing hubs are strikingly similar.
Posted by Marcia Oddi on August 16, 2013 12:49 PM
Posted to Indiana Government