Quantcast
Home / Commercial Construction / Milwaukee pitches development partnerships

Milwaukee pitches development partnerships

Sean Ryan
sean.ryan@dailyreporter.com

Milwaukee wants to team up with the real estate industry to redevelop foreclosed homes, but the partnership could fail before it starts if banks do not give up the property.

Local banks are easy to deal with, but it is difficult to negotiate with national banks to buy individual foreclosed homes when those banks are handling thousands of foreclosures, said Mike Ruzicka, president of the Greater Milwaukee Association of Realtors.

“(The banks) are unprepared for this,” he said. “The banks are laying off thousands of people, so the people that you are dealing with, you don’t know if they’ll be there next week.”

That could pose a problem for Milwaukee, which on Friday sent out a request for qualifications asking developers to volunteer by April 6 to work with the city on large-scale redevelopments of foreclosed properties.

The Commonwealth Companies, Fond du Lac, might answer Milwaukee’s call, but the development company’s vice president, Christopher Jaye, has reservations.

“It sounds great to do, and it’s a worthwhile endeavor,” he said. “But I think the mechanics of getting control of the property is one large hurdle.”

In its RFQ, the city reported there are 1,900 bank- and city-owned foreclosed properties in Milwaukee and 4,700 open foreclosure filings being processed by the courts.

Acquiring properties is a problem because national lenders control many of Milwaukee’s foreclosed houses, said Maria Prioletta, redevelopment and special projects manager for the city’s Department of City Development. Milwaukee is working with the National Community Stabilization Trust, a national conglomerate of housing organizations, and wants the trust to be a go-between linking the city to national banks, she said.

The city will spend some of the $9.2 million it received from the federal government to buy foreclosed properties, which could be used for some of the partnerships with developers, Prioletta said.

Re/Max Lakeside is trying to find buyers for 280 bank-owned properties in 10 counties in southeastern Wisconsin, and half of those homes are in the city of Milwaukee, said Mark Kivley, broker and owner of Re/Max Lakeside, which has offices in Shorewood, Milwaukee and Hartford. He said the foreclosure situation will not improve until banks abandon the idea of foreclosing on properties and instead ask brokers to sell the property on behalf of homeowners.

Under those deals, the banks agree to accept the proceeds of the sale and write off the mortgage even though the sale prices are less than the homeowners’ debt.

Both Ruzicka and Kivley said the city’s search for developer partners is a good idea, but still only a small move in the midst of a large problem.

“It’s not the silver bullet,” Ruzicka said. “But if it gets 100 or 200 (foreclosed properties), that’s a step in the right direction.”

Leave a Reply

Your email address will not be published. Required fields are marked *

*