SUNBURY — City officials are fuming after the federal government sold a piece of property for $5,000 two weeks ago — property it offered to sell the city for $800,000 two years ago.
The federal Department of Housing and Urban Development auctioned off the Shikellamy Homes property, located in the 600 block of North Seventh Street, on Oct. 17 at the Northumberland County Courthouse.
Shikellamy Homes is a low-income housing development, with 25 of its 34 units used for Section 8 housing. It was built in 1973.
A deed transfer has not yet been filed at the courthouse, but Maria Bynum, HUD’s regional public affairs director, said David D. and Ettel Dobson, of Elkins Park, placed the high bid of $5,000.
In its terms of sale, HUD listed the estimated cost of repairs at around $800,000. The new owner is required to complete the repairs within two years after the sale is closed and keep it as low-income housing for 20 years.
“The sales price reflected the high number of repairs that needed to be made and sale of the property was restricted to a nonprofit organization or local government in Pennsylvania,” Bynum wrote in an e-mail.
The Dobsons run a nonprofit organization called Food For Life that began in Philadelphia in 1982 as a soup kitchen and has expanded to offer subsidized housing programs. Food for Life will offer underprivileged families “independent living” at the Shikellamy Homes development for a small rental fee. Those staying in housing owned by Food for Life can reside there for up to five years.
“Our goal is not to artificially protect them from reality,” said David Dobson, who added that the nonprofit group will set up a local operation to manage the Sunbury property.
When asked if Food for Life will keep the property permanently, Dobson said the group will do “whatever is best for the project.”
Bynum said the repairs include repairing door frames, repairing gypsum board walls and ceilings, providing handicap accessibility, replacing storm doors and windows and adding air conditioning and appliances to the facility.
Members of City Council are upset over the sale because they tried to purchase the Shikellamy Homes property two years ago, with the intention of tearing it down to erect “more upscale housing” for middle-income families and young professionals, Sunbury Mayor Jesse Woodring said, pointing out that the city has hundreds of vacancies for low-income families, not including Shikellamy Homes.
“We showed (HUD) we needed to have more home ownership,” he said. “Our tax base continues to suffer. You can’t build a community on low-income. There’s a limit to what any one community can handle.”
About three years ago, then-mayor David Persing wrote HUD — which had recently foreclosed on Shikellamy Homes and planned to sell the property— a letter outlining the city’s plans and requesting a right of first refusal on the sale.
The agency rejected the city’s request and said if the city wanted to purchase the property it would have to pay about $800,000 and invest an additional $1.2 million for repairs. HUD also required the property remain low-income housing for 20 years.
The city tried to block the sale by filing a lawsuit, which made HUD furious, Shipman said. “(HUD) came to us and said, ‘If you’ll drop the suit, we’ll sit down and discuss it. We dropped the suit, and they posted it for sale again a couple weeks later. They told us they were going to do something, and they did the exact opposite.”
Shikellamy Homes was initially sold to Inna Kroll and Serquei Leontv, of Brooklyn, N.Y., in 2006, but they backed out, claiming information provided by HUD about the property was inaccurate.
-- E-mail comments to rscott@dailyitem.com.
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HUD accepts $5K bid for Shikellamy Homes
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