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Developers respond to city’s blighted property list

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There’s a saying that sunlight is the best disinfectant.

Though the source is 20th-century Supreme Court Justice Louis Brandeis, that was the thinking behind a Springfield City Council measure passed unanimously and with support voiced by 15 residents last summer. Council voted to release quarterly reports of data related to property offenses and top offenders.

By rule, the data would include the properties with the most nuisance complaints as well as the top 20 owners of problem properties.

Another thing about sunlight is that spending time in it isn’t always a day at the beach.

That’s something Josh Manning noticed when friends forwarded him a Springfield Business Journal article from Nov. 28 that showed his company, JNE Holdings LLC, made the top offender list at No. 19 with six violations.

Manning is entering 2024 with a new business name, The Valiant Group, but the same business model: buying blighted or dangerous buildings in the city and renovating them into starter homes.

“We typically try to stay under $150,000,” Manning said of home sale prices. “We’re looking to give homeownership to people that are starting families, first-time homebuyers, that kind of stuff – and there’s not a lot of inventory in that price range.”

Manning’s company renovated 32 houses in 2023, and his goal for 2024 is to complete 60. He currently has six renovated homes on the market and 13 under construction.

“We average usually about 45 to 50 a year, but I built some apartments last year and that kind of took away from my flip houses,” he said. “That’s my main part of my business. I buy dangerous, blighted – I mean, just the absolute worst houses, ones that have caught on fire – and we fix them up and then we sell them to people in our community.”

Manning said he typically purchases a house for $30,000-$50,000 and spends $60,000-$80,000 on rehab, including labor and materials.

“There’s not a massive profit margin. It comes from volume,” he said.

While the council-requested lists were meant to target problematic owners and properties, Manning doesn’t see himself as part of the problem.

“I look at it as I’m part of the solution,” he said.

The solution
Brock Rowe, director of Building Development Services for the city, said the city’s database has some limitations. For example, it can’t separate the number of citations on a property based on its purchase date.

“For properties that were blighted when they bought them, they became proud owners of property that’s blighted. We’re working on trying to find a different way to mine it out,” he said.

Rowe said all but one of the violations listed for JNE Holdings’ properties existed before Manning purchased it – one just 10 or so days before.

“Being that short of a time frame, he didn’t have time to get it out of the blighted list,” Rowe said.

Rowe said there are 13 categories of violations, and property owners may be cited for having a loose or fallen gutter or even a window open on the top floor.

“It’s not always the extreme bad houses that are creating that list of violations,” he said. “They could be minor in nature, but there could be several of them.”

Rowe agreed with Manning’s assessment that people renovating blighted properties are doing a service to the city.

“We need a lot more people in Springfield who will invest in our blighted properties and bring them back into the housing stock,” he said, noting if improvements aren’t made, his department has authority to demolish the property, and that happens at a rate of roughly 40 houses a year.

Just missed it
Royce Reding is another developer who is active in renovating and rebuilding dilapidated homes. Like Manning, he works mostly in Zone 1, the northwest quadrant of the city.

Reding said he believes it is only the fact that he owns properties under several LLCs that kept him off of the list of the top 20 violators.

Reding said things get bogged down in city offices, causing delays in projects, whether that is his efforts to renovate houses and triplexes on the north side or to develop the 7 Brew drive-thru coffee shop at the corner of Sunshine Street and Jefferson Avenue – a project that was contested by neighbors and brought Reding back to council multiple times with revisions.

The site of the 7 Brew sat idle for most of 2023 after the demolition of two homes, and debris and weeds accumulated.

“I will say the staff’s good to work with,” Reding said. “I think it’s just a lot of different departments. It sort of gets stuff logjammed.”

During the property’s idle period, Reding said he has cleaned up debris from things dumped at the site.

“The issue here is on the developers – we’re the bad guys when stuff gets dumped,” he said. “It costs us a lot of money to clean it up.”

On the residential side, Reding said the process begins with cleaning inside the blighted properties. Squatters are common, and Reding’s teams are left to contend with garbage, drug paraphernalia and human waste.

He pulls up a photo taken in one of his Division Street properties. It shows a small child under a thin blanket on a bare mattress as he stares in surprise at the camera. There is garbage all around, including hypodermic needles, and beside the boy sits a squat, perplexed-looking pit bull.

“Imagine my surprise when I opened that front door and I looked to the right and that’s what’s there,” he said.

Reding called the police, and the state’s child protective services got involved. It’s clear from how he tells the story that the incident still has him shaken.

This happened just after the home purchase and before renovation efforts began.

“There’s no running water – there’s no kitchen, even, in this house. They used the cellar for the bathroom, so we had probably about three to four inches of that material to clean up,” he said. “It’s heartbreaking.”

Reding, like Manning, believes he is doing important work by cleaning up city properties and adding to the housing stock. In the house he’s been describing, the floors are clear. An interior wall shows the addition of new studs and electrical work, and an exterior wall has fresh drywall. Reding shows off the two small bedrooms connected by a jack-and-jill bathroom. The porch is supported by 6-inch-square beams that he calls his trademark; indeed, on a tour of seven of his renovations in progress, most have these supports.

While Reding has some properties stalled by wrangling with the city – notably, work has long been stopped at two triplexes on the corner of Grant Avenue and Division – he said that Rowe visited him at a Poplar Street renovation and vowed to work with him to iron out difficulties.

Slumlords
Rowe counts Reding as someone who is doing important work to improve the city.

When asked if Springfield has slumlords, he paused – “That’s a difficult question,” he said.

He cited occasions when a landlord has someone under contract and needs to wait out a lengthy eviction process, unable to do anything while the tenant is in place.

“Our nuisance abatement process can be quicker than the actual process for eviction. We get to the house and start cleaning it up before the owner of the house can legally get to it,” Rowe said.

In other cases, people buy old houses with good intentions. They have a dream of being a landlord but not enough money to fix the properties.

Rowe said he catches people all the time working without permits, which triggers a penalty fee that equals two times the required permit fee plus $200.

Councilmember Brandon Jenson is frank in referring to some people on the offender list as slumlords, but he noted the list sweeps together the good and bad actors.

“We’ve talked a lot about how we can further refine this data to only list those entities that truly are the bad actors in our city,” he said. “I think that’s information that the public needs to have readily available.”

Rowe said he plans to provide more context when he presents the next quarterly list to council.

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