City paring list of troubled developments

Sep. 20, 2013 @ 04:32 PM

Officials and private-sector players have whittled down the infrastructure problems created in Durham by 2008’s real-estate crash, Public Works Department administrators say.

To date, the city has orchestrated the completion of 90 projects in 26 subdivisions, said Robert Joyner, the department’s manager of development review. The projects mostly have involved finishing streets or drainage controls.

That leaves the department still with 100 projects to address in 27 subdivisions, he said.

But administrators are pleased because much of the work they’ve finished has been done without needing to levy potentially controversial “assessments” on subdivision homeowners that ask them to shoulder part of the repair bill.

The 26 subdivisions addressed to date “represent a little over 2,500 homes that were potentially up for assessment had we not been able to get [them] up and running,” Joyner said.

Council members were pleased. “Congratulations,” Councilman Steve Schewel told Joyner.

The city actually has addressed 27 subdivisions, the extra one being Dunwoody, where it will in fact ask residents to shoulder an assessment to pay a share of the completion costs.

Joyner’s report addressed what Public Works terms “failed and struggling developments,” where infrastructure work was abandoned by private-sector developers who went bust because of the 2008 crash.

Had things gone according to plan, the developers would have installed the roads, ponds and piping and handed ownership of them over to the city. But because of the crash, much of the necessary construction work was never finished.

That put the city on the line, because it requires developers to buy completion insurance. Officials discovered that, in many cases, insurance either wasn’t available or wasn’t sufficient to cover costs.

Residents of the affected subdivisions also argued for city intervention on grounds that the presence in Durham of a string of unfinished neighborhoods would hurt property values and the city’s image.

The insurance problems continue to hold up work in some places, most notably in the Ravenstone and Stone Hill Estates subdivisions. There, the city is in a court battle with an insurer and is awaiting a judge’s ruling before moving ahead with repairs.

But elsewhere, Public Works has often found allies in the banks that either backed or inherited troubled developments.

Eager to get bad loans off their books, they’ve helped find other developers willing to step in and complete projects.

And Public Works at times has played matchmaker, helping lenders find someone “who could come in, buy up the subdivision, turn it around and make money,” Joyner said. “We’ve been very proactive in this.”

In response to a question from Councilman Eugene Brown, he added that the city has done more to address the failed-development problem than many neighboring cities and towns.