Dennis Plante writes:
"Many individuals that had the guts & fortitude to go back into some of the more blighted neighborhoods in MPLS have received very attractive terms (in the form of taxpayer sponsored loans) to do so."
Vicky Heller replies: It sounds more like financial self-interest than a virtue.
Dennis Responds:
I can assure you Vicki, many of the neighbors I personally know, didn't move into my neighborhood out of financial self-interest. Many, including myself, have the financial means to live elsewhere. We choose to live here because, for the most part, we love the City, we love the ethnic diversity and we feel a need to give something back socially for the benefits we enjoy. Everyone has a compassionate side, and I am sure that you show your benevolence in a manner other than this as well Vicki.
In my particular case, my wife and I paid $82,000 in 1999 for a house that we're currently selling (divorce) for $174,900. I won't mention the additional $20,000 worth of work I've done to the property over th last 5 years, or the number of children my wife and I have mentored and quite possibly helped reduce the overall tax burden (to everyone) because they connected with adults that showed them there was a different approach to life. Or the countless, less fortunate (financially) neighbors I've assisted in making repairs to their properties (at no cost), that helped increase the overall property values in my neighborhood. Believe me, had I taken the time I invested in help improve my specific neighborhood over the last five-years and focused on making money instead, I am fairly confident I would have come-out ahead financially. I am not an anomally. I know many in my neighborhood with that approach. Could be we're just not smart enough to understand what you're trying to tell us.
I'd say the money being spent on low-interest/no interest loans in these neighborhoods is money well-spent.
[Plante] It appears that your contention is that they should have all been willing to roll-up their sleeves and go it alone.
[Heller] Some may have chosen to do so, others may have gone elsewhere. When the government takes money from some and gives it to others, there is no free market decision making process. Some call this interference "offering incentives," others call the act "paying bribes."
Dennis Plante Responds:
And yet their are still others that believe we have a social responsibility to find practical means to assist in making our City a better place for everyone to live-in. I happen to be one of those.
In my opinion, it is the continued approach by some that the well-being of all of the residents in our metro area is NOT somehow connected that brings us to the very discussion we're having right now. Lest you not forget Vicki, it is these very same programs that make the very same apartments in the very same neighborhoods just like the ones you own, more attractive to those that rent from you.
[Plante] Is it possible that you're missing some of the hard-to-quantify benefits to yourself and other investors that don't live in MPLS), from these activities?
[Heller] No. All I want from local government is safe streets, good schools, and low taxes - to attract quality businesses and residents. Minneapolis comes up short on all three of my priorities.
Dennis Plante Responds:
Than why not get actively involved in the decision making process? Move back to Minneapolis. Purchase a home here, run for a local government office. Roll-up your sleeves and become part of th solution. You mention that if you had your way, you could easily generate an additional $10 million (in revenues) from property taxes alone? I suspect that you're not going to convinvce the masses in MPLS to appoint you dictator, so you're probably going to have to either get elected, or hired to make the changes you're suggesting. However, I suspect it isn't that you want to raise taxes to anyone. Just lower taxes for investment propertiy owners.
[Plante] There were numerous investors (from outside the city) that came into my neighborhood, speculated and purchased at the bottom of the cycle and have unloaded at a substantial profit.
[Heller] I'd be curious to know who they are. Any names?
Dennis Plante Responds:
Vicki, I don't feel it's appropriate to mention specific names and open individuals up to public scrutiny regarding the investments (in real estate) they make. However, neither of us are uneducated people. All one need do is look at what has occurred to property values in many of the more blighted inner-city neighborhoods in the past 15 years, look at the ratio of owner-occupied vs. rental and you should be able to come to the reasonable assumption that significant monies were made by numerous individuals. However, if you'd like a specific example, 3007 Irving was purchased in 1997 for $38,000 from Hud (it isn't listed on the records), rented by the former owner (illegally I might add) for 6 years, during which time he pulled $52,000 out in equity (through refinancing) to finance the purchase of other properties on the northside, and sold to the current owner in 2002, or 2003, for roughly $100,000. During the time which the former owner owned the property, his operated at a positive cash flow the entire time (from rent) and performed roughly $5,000 in repairs (T&M). I'd say that's a pretty fair ROI. If you'd like to go off-line, I could probably give you the addresses of 40-50 properties within a 2-mile radius of my current residence with very similar stories. Were they all just astute business investors from the 'burbs, or did the substantial investments made by local government to turn these neighborhoods around play a part? Who benefited?
[Plante] I didn't see any of them out working with neighborhood kids, or faithfully patrolling our streets to prevent crime, or just generally working hard to improve the livability of the neighborhoods they speculated in. Yet, they ALL reaped the financial benefits of these activities. I'm still here trying to make my neighborhood a better place to live and work.
[Heller] What you describe truly IS a virtue.
Dennis Plante Responds:
You're too kind Vicki. It's tough work, but someone's got to do it. Othewise, your taxes would be even higher. :-)
dennis plante jordan
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