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After 5 years, end of flood buyout program in sight

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Five years after water rushed into hundreds of local homes, the final six homes on a list of more than 100 being purchased and torn down by local governments are nearing demolition.

For more than three years, Franklin has tried to make contact with owners and cut deals with mortgage companies but hasn’t been able to purchase the last four flood-damaged homes as part of a buyout program. But the city has a new plan to team up with a local agency that could help buy the homes and demolish them by the end of 2014.

Johnson County is getting estimates to demolish the final two houses included in its buyout. Those houses in the Bluff Acres subdivision are the last two to be torn down of the 37 the county bought, attorney Kathleen Hash said.


When both buyouts are complete, 107 homes will have been torn down with about $8.5 million in federal funds.

After five years, Franklin senior planner Joanna Myers is ready to have the last few houses torn down and the project wrapped up.

“I’m looking forward to having the closure and everybody being able to move on with their lives and then getting the ground in a condition that will benefit the city as a whole,” Myers said.

Franklin has been working with homeowners, banks and mortgage companies for more than three years to reach agreements to buy and tear down the homes. Some properties were sold quickly, while others required hours of negotiation with banks before the city could get them. The city was able to buy its first house in February 2010, and since then 62 houses have come down.

The county wasn’t able to buy its first home until November 2010 but will finish its program ahead of Franklin because officials originally planned to buy 50 houses and ended up buying 37.

Houses have been replaced with trees or grassy lots. In Franklin, the main buyout area south of downtown is now an urban forest. Several empty lots at the entrance of the Bluff Acres subdivision also will be reforested, and empty lots in Bluff Acres and the Old Smith Valley area now are used by neighbors as extra yard space.

The four remaining homes in Franklin have been vacant since 2008 and have continued to deteriorate. City street department workers mow the lots when the grass gets tall. One owner has died, a mortgage company doesn’t want to sell another, and two owners have moved away and can’t be reached; and that has delayed the city’s efforts to buy them.

The four properties all have overdue taxes and will be auctioned off in the county tax sale this fall. The city can’t use the federal buyout money to purchase the homes through a tax sale, but the Franklin Development Corp., an organization created and funded by the city, could buy them.

The agency would buy the properties at tax sale and hold them for one year as required by state law. Once the development corporation owns the properties, the city could use the federal money to purchase the homes from the agency, Myers said.

The city isn’t allowed to buy the homes on tax sale or condemn the properties because of federal rules, Myers said. Since the city hasn’t been able to purchase the homes from the owners, working with the Franklin Development Corp. would be the quickest path to finishing the buyout program that has dragged on since the flood.

“This is part of the reason the FDC was created, to solve problems the city can’t solve itself. This is a perfect example,” attorney Rob Schafstall said.

If another bidder decides to buy one of the four flood-damaged properties, the city could attempt to buy the house from the bidder or find out if the new owner plans to repair or rebuild the home, Myers said. Since the houses have significant water damage and are likely mold-filled after years of sitting vacant, Myers didn’t expect any of the houses to be bought by someone else.

The plan would cost the Franklin Development Corp. at least $3,800 that the city couldn’t reimburse. The city would be able to pay only $1 for one of the homes because of other federal benefits the owner received after the flood, Myers said. The group also would have to pay about $500 to $750 per property in legal expenses to get a tax deed, Schafstall said.

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