No to Urban Renewal

If you rob a bank with a gun, you will probably get around $5,000 in cash. If you rob a bank with a pen, you can take $50,000 or more in equity. How much can you steal with a bulldozer?

I was riding with a local investor who was looking for vacant lots. He dialed the number printed on a for-sale sign. The owner lived in Dallas but had children who attended UAPB. The investor asked how much the lot was. The owner said he had $10K in it for demolition. The investor asked again — “How much are you selling the lot for?”

The owner said that he wouldn’t sell for less than $10K, but he was willing to partner with someone to build a townhouse or something. The investor made it clear he was not looking for partners (especially someone he didn’t know), and lots in the area are selling for less than $5,000. The owner said he wouldn’t let it go for less than $10K and ended the call.

Thank you, Urban Renewal.

Last week the PBC printed a two-part story about Pine Bluff’s Urban Renewal Agency, a signature initiative of the Go Forward movement. Part I discussed the agency’s dismal failure to attract new businesses and investors. However, Part II lauded the agency’s apparent “success” in demolishing nearly 200 damaged or abandoned structures in Pine Bluff.

Urban Renewal Agencies are economic revitalization tools used after the riots in the 1960s. Following the assassinations of Malcolm X, John Kennedy, Bobby Kennedy, and finally, Martin Luther King Jr., urban communities across the country went up in flames. In response, cities created/ utilized Urban Renewal Agencies to rebuild inner cities from burned-out ashes.

They were powerful tools that had the power through eminent domain to demolish entire blocks and neighborhoods in the blink of an eye. Widely used in the 1960s, they fell out of favor in the 1970s and 1980s due to overreach and abuse.

Ironically, the Arkansas Democrat-Gazette recently reported that the Arkansas State Police is investigating Go Forward/Urban Renewal Agency.

By the 1990s, the preferred community economic development tools were tax increment finance (TIF) districts and community development corporations (CDC). The newest tool became public-private partnerships, which Go Forward Pine Bluff purports to be. Go Forward modeled itself after the El Dorado Promise, which produced incredible results for the city of El Dorado. Go Forward may have been “inspired” by El Dorado, but they operate very differently. The El Dorado Promise utilized a constellation of local partners in a community-based, public-private partnership.

In contrast, Go Forward eschews local partners but uses the Urban Renewal Agency to implement its plan. No local political leader, neither Sen. Stephanie Flowers, Rep. Vivian Flowers, Rep. Ken Ferguson nor Rep. Mike Holcomb, endorsed legislation to revive Urban Renewal in the state. Instead, Speaker of the House and State Rep. Matthew Shepherd from El Dorado introduced the legislation to restore Urban Renewal in Arkansas — even though El Dorado does NOT utilize one.

Pine Bluff Code Enforcement can demolish structures for roughly $5,000 because they are required to use competitive bidding. However, Go Forward/Urban Renewal charges $10K when they raze buildings because they don’t bid out their contracts. Essentially, they charge the public an extra $5K per house, which becomes a permanent lien on the property. This appears to be an elaborate form of public bid rigging, mortgage fraud or equity stripping.

Equity skimming is a type of mortgage fraud in which the perpetrator obtains a mortgage loan in the name of the property owner, but does not intend to make payments on the loan. Eventually, they allow the property to go into foreclosure.

Equity stripping, on the other hand, is a tactic used to strip equity from a property. This is often done by taking out a series of loans against the property, using the proceeds for personal gain, and leaving the borrower with a property that is worth less than the outstanding loans.

Both equity skimming and equity stripping involve the use of mortgages and the abuse of the property owner’s equity in the property. These schemes can severely affect the ability to convey title to a property. As a result, the homeowner may have difficulty conveying the property to another person. They might find it hard to sell or refinance the property because the title is clouded. The mortgage holder may have difficulty in foreclosing because the title is clouded, which could lead to the property remaining vacant and abandoned.

Let’s do the math: 200 properties overcharged $5K in excess costs equals $1 million, and this is how you can steal equity with a bulldozer. Thus, Pine Bluff residents are paying Go Forward/Urban Renewal to strip their equity — with taxpayer dollars.

Go Forward/Urban Renewal is funded by the five-eighths-cent sales tax and receives $1.9 million taxpayer dollars per year. Taxpayers also fund Pine Bluff Code Enforcement, but it only has a $90,000 budget. So we give Go Forward/Urban Renewal 20 times more taxpayer dollars than Code Enforcement. Still, they charge the taxpayers 200% more to tear down a structure.

This is the opposite of what we should be doing. This madness has to stop. Vote No on May 9.