Lancaster officials agreed Monday to pay the federal government $1.4 million for 22 unfinished houses in a tract that was abandoned nearly four years ago when its builder and banker failed in the savings and loan crash.
City Council members, acting as Lancaster's redevelopment agency, voted 4 to 0 to buy the unfinished portion of the Silverado tract from the federal Resolution Trust Corp. The city plans to spend about $1 million to complete the houses and then sell them to moderate-income families.
City officials submitted a bid in November for Silverado and a similar tract, but were told in December that they had been outbid. However, the high bidder was unable to consummate the deal for Silverado, so an agent for the RTC contacted the city again last month.
"We were surprised we got the call," said city Redevelopment Director Steve Dukett, promising that the city will fix the houses and sell them within a year. He noted that the site's neighbors have long been angered by the lack of work to complete the houses.
The vacant Silverado houses have been boarded up since mid-1990. The builder, U. S. Housing Corp. of Burbank, halted work on the last phase of the 118-house subdivision in late 1988. In 1989, federal officials seized and liquidated its lender, Hill Financial Savings Assn. of Pennsylvania.
The RTC, the agency created to dispose of assets of failed savings and loans, foreclosed on the houses about a year ago, Dukett said. He expressed frustration at how much time the federal agency has taken in agreeing to sell the property.
Of the 22 houses on the 3.6-acre site, 20 are nearly complete and two have foundations only. After hiring contractors to finish the houses, Dukett said, the city hopes to sell them for at least $109,000 each. That would be the city's cost per house if the purchase and improvements total $2.4 million.
The Silverado tract is located near 30th Street West and Avenue L. Its sister tract, the Legends at 30th Street West and Avenue J, also was caught in the same builder and banker failures. The RTC still has not announced a buyer for that abandoned project, on which construction had barely begun.
The Legends tract gained widespread attention in January when some of its partly built and abandoned houses were burned for a scene in the movie "Lethal Weapon 3," which opened in theaters last weekend. Dukett said the city has been told the RTC expects to sell the site.