The Montevideo EDA is in the process of selling Ashmore Place and Ashmore South. Ashmore Place was built in 1999, while Ashmore South was completed in 2002. Calls for bids on the properties have been sent out, and a public informational meeting was held last night (Wednesday) at City Hall for persons interested in learning more about the sale of the properties.
Alek Schulz, Community and Business Development Specialist for Community and Economic Development Associates, spoke about the EDA’s decision to move forward with the sale. “When the EDA built those properties, they planned on retaining ownership for 20 years. The 20 years are up, and the EDA can now sell those properties and use those funds to invest in housing for the city, which we could really use right now,” said Schulz.
Back in September, the EDA directed Schulz to look into the potential sale of Ashmore Place and Ashmore South. “The EDA actually began thinking about selling these properties over a year ago,” said Schulz. “So in September, I began reaching out to various entities and organizations to see if there was any interest among them to purchase these properties.”
According to Schulz, there is interest, and because of that interest, the EDA recently sent out a request for bids. “On Friday, December 13, all bids are due. They will be opened and looked at by myself and City Manager Robert Wolfington. In order to be considered, all bids must be accompanied by proof of financing,” said Schulz.
The following Tuesday, December 17, the EDA will meet to discuss the bids. Schulz said: “The EDA has established the right to reject any and all bids, and they have the right to do the bidding process all over again.”
Throughout this process, the EDA is making sure that any potential new owners of the properties will not be making an drastic changes. “They will be asked what their intentions are concerning the properties. It is very important to the EDA that these properties keep operating as a much needed asset to the community,” said Schulz.
Currently, there is a severe lack of rental housing in Montevideo, so it is important that Ashmore Place and Ashmore South continue as affordable rental properties. Schulz said: “It is extremely difficult to find places to rent in Montevideo. If you search online right now for places to rent in town, only three will pop up. That’s well under one percent of all rental housing in Montevideo.”
Both Ashmore Place and Ashmore South are at 100 percent occupancy.
If, once bids are opened on December 13, there is a successful bidder or bidders, the EDA will move forward with the next step of the process. “This isn’t going to be a quick process,” Schulz said, “and that’s what we want. We want to do this in the best interest of the current tenants, the EDA, and the City of Montevideo.”
A purchase agreement would have to be drawn up. “Once a purchase agreement is agreed upon and signed, thirty days after would be closing. The fastest I see that happening would be by February 1, 2020,” said Schulz.
The major concern for tenants would be about whether or not they would see their rent increase under new ownership. Schulz said: “Once the properties are sold, they are out of the EDA’s control. Right now, the only restriction the EDA has been working with is income restriction for the properties, which they are currently under and which the EDA would like to see kept in place.
“Basically, in order to remain competitive in the Montevideo housing market, any new owners would have to keep rents where they are now.”
According to Schulz, average rent at Ashmore Place and Ashmore South runs at $700 to $750 per month. “Compared to the whole of montevideo, that is relatively cheap,” said Schulz. “In our area, rents are running anywhere from $750 per month up to $1,200 per month.”
The sale of these properties would allow the EDA opportunities to invest more into housing for the city. Schulz said: “With the sale of Ashmore Place and Ashmore South, the loans for the will be paid off. Anything left over is planned to be invested in housing. That was what was originally intended when those homes were built. Those funds are going right back into housing for Montevideo in one form or another.”
So far, the EDA has made no plans for the proceeds from the sale of the properties. “There are no concrete plans as of yet. You don’t want to make plans with money you don’t have!”
For now, the process has just begun, but the EDA and the tenants of Ashmore Place and Ashmore South will have a better idea of where things stand once the bids are opened on December 13.