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Chattanooga Neighborhood Enterprise President and CEO Martina Guilfoil, left, and Ralph Perrey, executive director of the Tennessee Housing Development Agency, speak before demolition begins Tuesday, August 23, 2016 at 1801 E. 12th Street. The abandoned home will be demolished to make way for new affordable housing.

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New $10 million blight-reduction fund pays to demolish condemned Highland Park home

An excavator's giant, metal claw tore into a condemned Highland Park house Tuesday morning at a ceremony that marked the start of an effort here to tap a new, $10 million Tennessee fund to eliminate blight.

Chattanooga Neighborhood Enterprise (CNE), a nonprofit housing organization whose motto is "dedicated to building a better Chattanooga," got a $25,000 grant from a $10 million Blight Elimination Program administered by the Tennessee Housing Development Agency and funded by the U.S. Treasury's Hardest Hit Fund.

"Why is CNE bulldozing a home?" CNE President and CEO Martina Guilfoil asked at the ceremony's opening.

She explained that the condemned home at the corner of South Hawthorne and East 12th streets wasn't salvageable because of black mold and raw sewage inside of it. It's being demolished, she said, so it can be replaced with yet-to-be determined affordable housing project, possibly duplexes owned by CNE or smaller homes built by a developer.

CNE got involved, Guilfoil said, after the home's owner sought help because she lived on a fixed income, and was behind on her payments on the home's roughly $40,000 outstanding mortgage plus thousands she owed a creditor and $11,000 she owed CNE for a home improvement loan.

"She didn't have money to fix it, and she owed on it," Guilfoil said of the house that county property records say was a 1,300-square-foot home built in 1930.

So CNE got the bank and a creditor to forgive what the woman owed on the house, Guilfoil said, and "we forgave the $11,000 that she owed CNE on this house.

"She came out of it debt-free," Guilfoil told those gathered at the ceremony, including City Councilman Yusuf Hakeem, State Rep. JoAnne Favors, D-Chattanooga, and State Sen. Bo Watson, R-Hixson.

The Blight Elimination Program is meant to strategically eliminate the one or two bad houses in a neighborhood that threaten to bring down the value of surrounding homes, said Ralph Perrey, executive director of the Tennessee Housing Development Authority.

"It's not like the old urban renewal stuff," Perrey said. "It really is 'addition by subtraction.'"

The Chattanooga house was the second in the state to be demolished with the new funding source, he said, the first was in Memphis.

Hamilton County is one of seven counties where Blight Elimination Program funds are available. The other counties are Davidson, Knox, Montgomery, Anderson and Rutherford.

"We have $10 million to put to work," Perrey said.

Contact staff writer Tim Omarzu at tomarzu @timesfreepress.com or www.facebook.com/MeetsForBusiness or twitter.com/meetfor business or 423-757-6651.

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