Should landlords whose tenants say they have a history of providing shoddy housing be given financial incentives from the city to build even more?
Omaha City Council members voted 6-1 on Tuesday to delay action until Jan. 29 on a request from developer and landlord Dave Paladino for tax-increment financing, which he’s seeking to help renovate two historic apartment buildings in midtown.
It was an unusual move: The council typically approves TIF applications and even the city’s attorney says state law doesn’t allow the city to look at a landlord’s past performance when considering TIF.
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Still, council members said Tuesday that they want to explore whether the city can place additional requirements on those who receive the incentive for projects. And they also want to talk to state senators, who convene in Lincoln for the 2019 legislative session this week, about introducing legislation to allow the city to take into consideration an applicant’s record.
A lengthy and at times emotional public hearing on Paladino’s request involved several current and former tenants who raised concerns about his business practices.
Paladino said the complaints were hard to hear. “I consider myself to be a reputable businessperson,” he said.
The project would renovate an abandoned building into 33 market-rate apartment units at 2230 and 2236 Jones St. The project is expected to cost $3.2 million, and the TIF request is for $285,000 to go toward costs like acquisition and architectural and engineering fees, among others.
TIF is an incentive that allows developers to use a portion of future increased property taxes generated by their projects to pay certain upfront development costs. It’s supposed to go toward redevelopment projects in blighted areas that wouldn’t happen without the incentive.
Council President Ben Gray promised that the council will soon consider a landlord registry, which some groups believe could help keep problem properties in check and prevent evacuations like those at the Yale Park Apartments, owned by Kay Anderson, in north Omaha last year.
Gray, who suggested that the council delay voting, said he’s fed up with slumlords operating in his district. He said he’s not trying to kill Paladino’s enterprise, but he’s aiming for fairness.
“What I’ve seen (at your properties) is disturbing,” Gray said, “and what these people are saying has some validity, to me.”
Paladino has a history of code-enforcement problems, said Scott Lane, the city’s chief housing inspector. But Paladino has also been responsive and works with the city to get complaints remedied, Lane said.
Former and current tenants of Paladino alleged that he didn’t fix or replace faulty appliances or took a long time to do so. They said he overcharged for damage tenants say they weren’t responsible for.
One man said he waited months for his stove to be replaced and lifted his sleeves to show the council what he said were bedbug bites on his arms. A current tenant said she moved into a place with a nonworking stove and tub and other problems that she said Paladino won’t address.
Another current tenant and mother of eight children said she feared retribution for testifying but felt strongly about letting her bad experiences be known. One former Paladino tenant said she wouldn’t recommend his properties to her worst enemy.
“Taxpayers should not be footing the bill for ill-maintained apartment buildings,” she said.
Mark Vondrasek, who is with a tenants’ rights group, said he agrees that the city should help to restore historic buildings, but he questioned why bad actors don’t face consequences. He said denying Paladino will help him change his behavior.
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