During a hearing at Ramsey County's courthouse in October, the fate of Wesely Pettiford's St. Paul home seemed all but sealed.
Testimony had turned grim. Tethered to a fixed income and dialysis treatments, the 65-year-old Pettiford hadn't paid property taxes. Based on that initial $1,500 shortfall, in a little over a year, due to a little-known state law, the house was seized.
After the family stepped in to try to get the house back, a subsequent city inspection found problems with the chimney, leading to a condemnation order and Pettiford's eviction.
County officials testified in the October hearing that the Frogtown home needed a top-to-bottom rehab. There was talk of selling the house to a flipper, to get some equity out of it, at least.
"I'm sorry this is not the outcome you were hoping for," hearing officer Marcia Moremond told Pettiford's family. It wasn't. "Hopefully some of this is showing there's a future at least."
County officials step in
There may be a future, but it seems, at least for the moment, to have little to do with flippers.
An unusual visitor stepped into Moremond's hearing room as 2020 started, for a follow-up.
"Mr. Samuel, I don't believe I've ever seen you in this environment before," Moremond said.
"It has been many years," Ramsey County Auditor Chris Samuel replied.
"Good for you."
Behind Samuel sat Ramsey County Commissioner Trista MatasCastillo. And behind her, Ramsey County Assessor Luis Rosario.
At issue: the Pettiford house, which the county now owned, and was struggling to give back.
A Catch-22
Following a Pioneer Press report, county officials said what happened to Pettiford shouldn't happen again. The speed of the foreclosure, and the near impossibility of acquiring it and fixing it under current county restrictions, was something they now say they want to change.
Pettiford and his family were, in essence, caught in a "catch-22."
If they wanted the house back, they'd have get it on a contract for deed with the county, one requiring they fix everything.
But they wouldn't be able to get financing to fix everything, since it was under contract for deed.
The county wouldn't allow any liens to be placed against the property; what would happen if naive or overzealous owners paired with unscrupulous lenders and put the property deep underwater, and taxpayers were on the hook?
A game-changer?
At least, that was the thinking until now until now. The Pettiford plight was a game-changer.
Flippers, who supply their own lending, shouldn't be the only ones that could feasibly purchase foreclosures; families should, too, Samuel said. The trick is finding the right partners: nonprofits that specialize in such work, or even the city of St. Paul itself. Organizations that aren't going to leave the county cleaning up red ink.
Hadn't the county historically required that all the rehab work be done in one year under such deed contracts, Moremond asked?
That was something they were now willing to tweak, too, Samuel told the hearing officer. As long as there was some sign of "significant progress."
"We are coloring outside the box," MatasCastillo testified. "There's a bigger cost."
Currently, Pettiford, a former foundry worker who had bought the home free and clear with the entirety of his 401(k), and who receives dialysis treatments thrice weekly, was in temporary housing.
And so, weeks ago, the County Board of Commissioners voted to approve the Pettifords' repurchase of the home.
But wait, Samuel warned the family, don't purchase it until you know how much it will cost to fix up.
That's what this week's hearing was about. And it started with an ice-cold bucket of reality from city inspectors.
'Not what I expected'
At the last minute, the city's Department of Safety and Inspections released their assessment of the property.
They recently conducted a full code inspection, much more extensive than the first, and on the morning of the hearing released a list of each and every violation.
"It was not what I expected," Samuel said.
There was bad news and bad news: 38 plumbing violations, 13 electrical, 31 additional building code violations. All of which, they argued, would have to be fixed.
"Gas leakage ... microorganisms ... leak in the waste line ... stack effect ... emissions ... unstable entrances," Steve Ubl, the city's building official, read the litany after visiting the house personally.
Neighborhood groups have noted if code inspectors went into every house on that Frogtown block, they'd likely get a big list as well.
A house worth saving
But still, there was a silver center, others testified.
"It is a house worth saving," said Jason Peterson, chief executive of Neighborhood Works Home Partners, a nonprofit that fixes up homes in low-income areas. They also had their inspectors out to the Pettiford property.
Those inspectors estimated the work to be around $150,000. Compare that with $350,000 to build a new home of similar size, on top of five-figure tear-down costs.
Neighborhood Works was prepared to put $85,000 toward the rehab late last year, but too much time passed, and other projects moved ahead in the queue.
It didn't help that the city of St. Paul cut its contribution to the program: from $650,000 to $375,000 this year. That base is taken as leverage to ask for more money from other private and governmental entities, typically tripled or quadrupled.
Still, Peterson said he wanted to help find a way to make the rehab work.
Pettiford's family said they were scrounging what they could; they had already come up with the roughly $4,300 in back taxes. They also asked his American Indian tribe for help.
"We as a family will make sure he's not going to drop the ball. We didn't know Wes was in this situation," said niece Samantha Wright.
And there was plenty of talk at the hearing of asking the city's Planning and Economic Development Department, which oversees the city's housing program, to help with the property. No representative from that department was present.
'Toothpaste out of the tube'
Hearing officer Moremond's official job this week was to decide whether to declare the home as vacant; in effect, requiring it to be code compliant, from top to bottom.
The other option was to just fix the few things cited in the initial, months-old inspection, rather than the even more damning second one.
But since the county itself asked for a full code report, Moremond said, "the toothpaste is out of the tube," leaving little guess as to how she would decide. That recommendation will be presented to the City Council in coming weeks.
Until then, Samuel said after the hearing, the biggest question remained: Where would all that money would come from?
And could they somehow make this new foreclosure lending program work?
