This regional public affairs program, titled "Who is Conserving Neighborhoods: Residents or Investors?", presents a session held at Macalester College that examined conservation/rehabilitation in several St. Paul neighborhoods.
The program was moderated by David Lanegran, professor of geography at Macalester. The speakers were investors and neighborhood residents, including John Rupp of Ramsey Hill Properties, a partnership that develops residential and commercial properties near Selby Avenue in Saint Paul; and Edward Knudson, owner of a Selby Avenue apartment building.
Read the Text Transcription of the Audio.
The title is residence for investors. I don't I think that that's not very accurate way of describing what I think the discussion should be. It seems to me that the residence are made up of tennis which are in turn made up of individuals with varying reasons to be living in an evolving neighborhood. Investors with homeowners being a being a homeowner being the classic way that this country people of a team middle income middle class B conomic status investors can be broken up into speculators and speculators can be broken up into those that are looking for short-term profits. And those that are looking for longer-term profits investors can be broken up into individuals that are holding for short and long-term. Also, I think that when we try to answer the questions about Who rebuilds neighborhoods we ought to try to break down the categories that were suggested a little bit closer. I would like to do that when we get farther one in the program. Names are Cobb Financial Consultant with to frost & Company. As a Financial Consultant, we do a lot of advisory work for investors for small investors and large investors. They also do extensive financial consulting for people that are going in and setting up large projects to eventually sell portions of those projects to investors. They also do work for construction firms actively set up projects themselves are going to do this going work. In addition we've done laryngitis and addition we've done a very large amount of work in the public sector for City and County governments as well as federal agencies on the effectiveness of their national and local programs to encourage investment Redevelopment of various communities. My perspective. Therefore is more looking at the investor what his motives are. Perhaps an inordinate amount of attention is very often given by financial consultants to the tax implications. John's comments you saying he's not sure where things fit in who is who is really predominant developing neighborhoods. The investor of the individual all of my perspective was great working for the investment. We are also very interested in what's going on with the individual residents and that they are the ones that determine the success or the failure of any project over long. My name is Zeb Knutson. And I with a partner own a piece of property at Selby and Dunlap. Just a block east of Lexington and the lexington-hamline community area. I'll have the building about 3 years now. Gary Sandy is my partner and we are John Rupp was trying to distinguish among the investor types and and we are residents of the neighborhood that that also are investing in the neighborhood. But we do not the investment is not our primary activity secondary activity. And what I my main job is working at the Metro Council and threw that activity. I also have some experience dealing with some of these were going to be speaking out more the experience of being a building owner in a local neighborhood and I do have a little list of points do I prepare something and I not going to go through the whole thing, but I know most of that will come up during the discussion hopefully, but I'd like to have a list of some key points that as I sat down thinking about this seems to me At least for the Investor's of of my type. The first point is is a commitment to neighborhood or to the neighborhood that a person lives within I think investment does follow investment is not something that exists by itself. It follows human my partner and I were not that's not that's not a high-minded liberal type things from our neighborhood of where the type of folks that were expecting to live there indefinitely. Any one of us could have a job change and move and so forth. But as far as we could see we were committed to that particular neighborhood and willing to invest a small amount of money into it. We weren't the kind of folks that had a lot of money in fact even the down payment. The kind of investors in the sense of having them having a whole lot of extra cash around and looking for a spot to put it but I think there may be lots more folks in the neighborhood. So in various neighborhoods of all the type them people at the are willing to invest in not just their own home, but another facility housing programs that try to encourage and support those kinds of folks stuff could be more successful then we might think I don't know point I'd like to make is that the the organizations in the neighborhood are in my mind at least really critical to the success of investment at least in the in our case. So the without a neighborhood organization such as the lexington-hamline community council, I doubt whether we would even have begun to think about that. Trusting in that neighborhood, but they had they had an order on a very strong organization to that organization. We realized and experience the support of our neighborhood and it was anything but an agonistic relationship Roseburg positive supportive relationship is a critical factor for 1/3 point is is I believe that that the one of the real problems with investment in an inner-city Central City areas is not simply technical issue a political issue in the sense of the capacity of the political structures of the community to contact to manage the conflict that exist with an international scale. We know well that that major investors don't like to invest in now and not countries with a Revolution going on and I'm neither I suspect to investors. Investing up in a neighborhood that, but whose social structure is very unstable and pluralistic in the sense of an able to manage of the conflict among the opposing interests groups that time that exist within a lot of Central City type neighborhoods in that case the neighborhood organization and like spam facilitated the Hawaiian least some of the potential conflicts that could have emerged in the types of places that the rent and our ability and so forth we met with them and they said they didn't want to Tavern and so forth and we got we knew what they didn't want. It was a little harder to identify just what they did want and also guys are businesses that would want to come in there. 1/4 point is is planning a technical expertise. A lot of times neighborhood organizations don't have access adequately to that and I think it's a critical thing in Central City development. However, previous building worked with the community Design Center in a coming up with the vision for the for the for the building and otherwise, I think the architectural work planning work and so forth are critical aspects of sort of rebuilding a vision for a Ford building or a neighborhood area and that expertise is critical and was very important to us. So they could show us a little a picture of what that what that building could look like in the future and we brought that to the bank in the banker could see you What that building could be in just that technical capacity to start a bill that Vision as well as credible proposal is Burger reporting to factor. I'm just finally just a general issue of land use. I know on Summitview. There's a lot of controversy about an hour we need job. So so we need industry while we don't really want industry but we need businesses. I need residences should residences Beyonce Albion lot of debate in division and conflict can occur over a different land uses and get translated into zoning the codes and all of that while I think just the idea of a comprehensive land-use says it has an issue. Is it something that doesn't have to be divided into the all these clansmen classification. So neatly that it's it's critical to have a I think kind of a broader vision of the total land use other community and show how things can mutually support one another rather than always think that means that the land uses are always a completely not competing. My name is Reed McFarland. I'm the executive director or the paid staff for thing called a Marion Park Neighborhood Housing service. I'd like to explain what we are cuz it's kind of a curious animal. There is one in St. Paul and there is one in Minneapolis and Neighborhood House in the Neighborhood Housing service program Is a partnership? Made Real by a board of directors of a corporation and a board of directors the majority of the corporation in the board our neighborhood residents. The banks and Savings and Loans from around the metropolitan area participate in the hold the three seats on the board of directors to delegate sit on my board representing city government. And once it's representing the community council the point of giving you those numbers is to explain that we are a partnership between each of those groups. In an attempt to generate in one small neighborhood Merriam Park in this case the kind of investment or reinvestment that will take a neighborhood which is showing early signs of deterioration disinvestment at turn it around and make it into a safe sound solid neighborhood where people enjoy living where their investment is cure where homes are improving. It is an attempt to embody the the Great American Mystique with the single family home. The program is IQ. If you detect a note of irony periodically there there cuz I'm not sure that you know, I think we're confronting the fact that the single-family home itself is an expensive concept to subsidize. Just as we are now finding out that the automobile is an expensive form of transportation to subsidize. And the cost in fact in our system may become prohibitive to some many if not the issues that we artist discuss on this panel. Residents vs. Investors, I think has John Rolfe correctly pointed out as to what degree Falls the division between investor who don't live there and investors who do is is one of perhaps a pejorative title on one with call investor. The other is a resident. I'm sure that for most of the people here are your net worth is tied up in a house without your house. You really aren't worth much and we all are terribly concerned to be worth a lot. But that does I'm not quite sure but as an NHS director and trying to encourage reinvestment in a neighborhood, my argument is very simply that residents take precedent one. There's more of them. Blanket, or they will always be with us. Secondly if you were to take a block average house or an average black with the 14 houses each side of the street or 28 on the Block and everybody's seen only bought the house for 25 and I'm going to pump another 10 into what you're talking about and I see a black with 28 homes. You're talking about 28 families investing accumulative $1000000 which of course but you must add the interest cost $2000000 to live on block. So I guess I have a preference. Numerica for arguing that residents do legitimately have the larger investment and rear it is. I think that most people would participate in a corporation with a capital value of perhaps a quarter of a million Book value of 2 million dollars and they have only infrequently some kind of control a board of directors and you got stockholders, but you have no means of of corporate control which is the problem of neighborhood organization is controlling the what little wealth we have. Okay. So my first argument is that red investment follows people number one, very obviously all businesses do all business Investments do if there are people who are going to buy our Toro lawn mowers or anything else. We make her producer serve. There's no point of the business. It won't generate a profit. Nobody will invest in it. So my argument is that investment normally follows when somebody I'll be at the adventuresome. When you find Adventure some Souls. I like John Rolfe who's bought several albatrosses and converted them into gold mine when they have that vision of what that can potentially generate that is to be lauded but none the less that investment. I feel pot follows the the numbers of people who've been there or who are going to come or somebody feels they, they're properly attracted a marketing concept. Also, even if John had bought buildings and people didn't show they would have gone under and they would have been on the panel cuz we'd say, well it really don't have too much to say they lost. That's again our little social test thoroughly. I think in any neighborhood major investment is being made. It's fine large being made by Banks and savings and loans with whom you trust and give your your savings if you have any and they in turn in neighborhood and I think the point of the Neighborhood Housing service program is the realisation on many people's part across the country that we have Love by giving deposits to bank all-too-often relinquish control of the direction of that money goes and we have had as a result Concepts like redlining the point of the Neighborhood Housing Services to re-establish the connection between residence. And bankers and city government and to do it in a coordinated way. So that ain't you can generate investment to have their houses inspected and in Merriam Park, which is by the way. I'm talking about the area west of Snelling and between Summit I think is over here sitting right between Summit and 94. Okay and from Snelling West to the river. We're trying to encourage people to have their homes inspected we go back with a code report of the deficiencies in there. And and try to encourage him to fix it up that generates investment in a Hole by a neighbor and we try and do a door-to-door so that we have it on a block. And we are then also because we generate that kind of investment on a particular block. We didn't go back to the city and say hey look all these people are really spending a lot of money on their homes. Would you the city kindly supplement and am supported so that the city has now agreed to come in and put in streets and Kurt. You know that 80% of Saint Paul has your basic send with tar, you know every spring And that's the Street in St. Paul. So we have lots of opportunities for combining resident investment with public investment then I think once you build a neighborhood Basin, you can talk about developing commercial areas and the imaginative use of large your lumps of money. Most of us can grapple with the problem of a home, but we will see a large building with a quarter of a million dollars. We say goodness sakes that's so much money, but then it's a question of scale and and perhaps we'll discuss that later. Thank you. There are several articles. Pieces in public media that describe the investor particularly the absentee landlord as the culprit in the decay of inner-city neighborhoods the rip-off Speculator the rip-off investor the person in the three piece suit who comes in by Chepachet rents high and sell them to the city after an arsonist has been hired to burn out the building now, this is a scenario that we reading Time Magazine and the Christian Science monitor in a number of other. Pieces of information and kind of information that is widely discussed neighborhood. Now, we have a panel. individuals each of whom is engaged directly in the management of funds directed for buildings other than as I think we all agree that the homeowner is an investor put the households money where the households mouth is and games at a shelter and capital benefit from their investment in that property these individuals deal with the other side of investment and investment commercial property investment in residential property other than their own. So I'd like to recognize the duality of this. Term investor and for the first part of our discussion focus on that issue recognizing that Neighborhood Housing service is primarily focused on how is I think the issue they confront is much larger than that and the model of their operation is cooperation between local residents government agencies and the larger investment Community is one that we want to explore but I think we could use our time most effectively if we talked about a narrower aspect the landscape. No, it's not circumstantial to know that every one of these individuals has some connection with Selby Avenue. They all have either examined in some detail or presently own property on Selby Avenue. So that's a rather famous street and Saint Paul in many ways. It represents the cycle of the inner city. Land market wants a very vibrant thriving commercial and residential street nearly abandoned the old city planners joke of the cell be like but really should be brought back to life again because I remember when I began to study Selby Avenue quite extensively in the late 1960s describe. Their policy is wrong to they shouldn't try to rebuild it. They shouldn't take the still be like for us to heart and make it into a inner city Lake. Take it all up and turn the pipes loosen sell tickets. I would come a long way since that I think rather sick joke out of the frustration of the late night. planning effort to very successful establishments that you all seen on Selby Avenue, but the issue of regulation That's what needs to happen for the stockholders. I thought the McFarland's analogy was very Act. Residence as stockholders in a corporation without a board of directors. So my first question I would pose to Chicago and Mister up Is there any way that investors can come to grips with this problem of Regulation or managing which they have state their investment? Thanks dark couple ways that people can read exert Financial control over neighborhoods two points Broad Run Out by read where the we give away the control of our dollars and savings and loans using Savings and Loans rise and Savings and Loans in Banks because Savings and Loan the more predominant real estate as a rule. The very very necessary. I need a way where we can accumulate my small Savings in your small savings and then turn around and put that back into the economy in the form of a large alone still very useful. But I've never met anyone in my life that has not open their Savings and Loan account without signing on the back of their little account slip the fact that they are giving away their right to say what that Savings and Loan does with their money. No point read brought out was he has to go to the government the city and save please give us back our money that we contribute his tax dollars so that we can put in new streets so that we can repay existing streets. We need to exert Financial control. Maybe we need smaller units of government. Maybe we need a neighborhood government that will oversee our streets their problems in that continuity as people come and go from neighborhood. We don't have the constant threat we get on a larger scale government, but we need to participate for a actively to start controlling our own destiny. The analogy to a corporation is is good and that we have a group of total assets. We have people interested both financially and and many many other ways but the analogy has some major flaws. The motivation is very different corporations profit motivated in a neighborhood by prophets. Not money. My profit is is a place to live establishing a base has been her action in a community with people that I can can live with and pass through the streets and acknowledge and and grow and be healthy in that kind of role. It's not a a company that's going out trying to Break a new product new markets. Whatever your new market is is rolled Market its home and I people must become very aware of their Community as such but I don't see a neighborhood any neighborhood has a corporation but I do see it as a financial entity one that each member has to participate in as a neighborhood unit. He has to maintain Financial connections with a bank and financial connections with his government because those are are the the large contributors to what's going on economic lie in any neighborhood I'll speak to that a specific example. I hadn't some participation in building w a frost and Company which is on Selby and Western 1960 that corner had the highest rate of crime in the state of Minnesota by 1962 the housing authority and determined because we're going to be problems with east west traffic on the freeway reach capacity somewhere in the mid-1970s. The result of that they determined that he should be demolished along with all the other commercial buildings down the street. when we bought that particular building about 5 years ago, there wasn't a viable business on the corner with the exception of Alaska drug store, which is the another complete story. The banks have a fiduciary responsibility to the depositors to not invest money that are being held in area with a potential for loss that's reasonable. They're regulated by state and federal law to not do that was built with Back such a project cuz there was no proven track record, which is what they want to see for such a business to exist. So I guess I have obviously a prejudiced that somewhere in in development of areas. And I guess we are somewhat place for the first person to get started now. It's a proven product financing has become available. There are a number of people that are employed in in that business smell good banking business to make loans in the area very interesting question about where that all star. I think if we found another location and I can think of Sylveon Dale as being one it'll be interesting to see what lending institution will be the first to land on that intersection. I think there's a likelihood it'll have to be somebody that'll do it privately with sources from another area. That's my feeling. And you want to follow up on this whole issue of financing and availability of funds for people who want to take risks? Yeah, I'd like to it. I don't have the same kind of a personal experience. But I've got I've got some opinion about it in the sense that it seems to me that present tax law on. General stereotypes and images of investors and then just the complexity of Central City Redevelopment as opposed to development of the urban area. The complexity of the physical environment as well as the social environment inhibits environment and for redevelopment and I didn't Hibbetts in investment for for older areas as opposed to new areas a new area don't have any people are you don't have to move them around and worry about neighborhood groups and all that and it's easier to build you don't have us all to you. It's supposed to Sociology problem in terms of a pluralistic neighborhood that you have to deal with them. The Browns just aren't that aren't the seemingly has great for the Investor's mind is as I think both of you or talked about But then I think there's some basic laws in our national league of cities is that published over the last couple years that there is just very strong within our tax laws just incentives for for investment in Central City areas and dynamics that go on relative to property rights on Selby Avenue. We got together in a little lunch before before this a few days ago and came out that that was concerning that land Speculator you referred to the bad images of the investors and in a lot of Publications I happen to believe that that's not all bad that is it to have that bad image. That is I didn't come land speculators to some degree of a room that the image of the whole business on sale before example, and I don't know how much this goes on maybe some of the other panel members do but the whole idea of a person owning a piece of land on Selby Avenue that's sitting there waiting for somebody else to invest and a develop the property and make it a good place again sitting there weights for somebody else to do that while they don't do anything in order that they can make a bigger chunk of money and their property values go up. That's that kind of thing just irks me, you know, I don't know if that but somehow the property value is related to the overall human values and Community Values. Are are are not not in Balance. There seems to me than the governmental Matt mechanisms of regulation of that are are very controversial things difficult things in the courts the night as I say, I'm not an expert on those things, but nobody seems to me those are things that need to be somehow played out of the Investor's a group that have control of property and are seeking to make windfall profits without actually taking any risks that is there. They're sitting there waiting for somebody to come along and buy them out and it's like the Homestead Act and all the government gave the land to the folks that would development. Text me we ought to keep that principle. I going to some degree in the Inner City. Read do you want to pick up on that Saturday? I don't know about the national league of cities study on this incentives, but I just think there's a whale of an incentive to sit on land to buy land to sit on it to to not to invest in it. I think there's some very specific tax incentives building into our system to subsidize that happening and making a buck in our system is eulogize making lots of bucks his more eulogized. I don't know how you get around it and neighborhood Improvement, you know, unless we start auditing each other's Buck books how we going to get We know, you know, you're sweet old lady, but we know you bought that house wrongly 4040 years ago, and you can't sell it for 14 us too much profit. Classic economic sense for them and they're supposed to evidence of it supposed to respond to the product is being offered exception to that is if somebody ever gets Monopoly control and then that whole system breaks down in inner city Redevelopment windfall profits, ironically don't seem to fall to people who are investing as much as people who are speculating as to distinction. I tried to make I think so I'll be is a is Good example of that there are vacant and vandalize buildings that are held on Selby Avenue in which the owners as a percentage of their investment. And I think I would agree that I think we should point out that the only the only present way around that is through a condemnation process. This is where we getting back to the to the neighborhood's control developments commercial development vandalized buildings along Selby Ave. And we're using that as a microcosm since we're all relatively familiar with that City chooses not to the neighborhood adjacent to the problem structure chooses not to force the city into into doing something about it and it's an interesting problem. And I think there's a deficiency of the vehicles to do it or they are but they aren't and there's classic examples. Information but it seems to me for a while and there are a couple hotels in Hill district. We have the same problem. People mention there's an advantage to sitting on things from a tax Viewpoint. There's absolutely no advantage to sitting on land. There's no depreciation on land. You don't have any right right off that you carry over the IRS will not let you revive your land down with they just don't any advantage from sitting on land is going to come from whatever holding gains or losses. You can realise or defer whatever but the federal government at least has not given any instead of two people to hold Barren land building a different story building can sit there and I made appreciate it as I see fit but that's only because I'm very unwise because if the building is sitting completely faking I can write the whole thing now 2-0 value in one year realize my loss and smile the rest of the time I don't care if I own the building or not for tax purposes, so I may have it instead of but it's 4 There are a number of I see two ways that government can give us incentives or or stimulate development first through taxes taxes in the past to prove to be one of the most effective ways of doing that but we peasant type folks that don't like to pay taxes get very upset over loopholes because we don't stop and say what is a loophole why is it there? It's not a loophole in that people are constantly abusing. There's no pure logic accounting or business logic to taxation. It's incentives passed by Congress for somewhat disorganized piecework year-to-year and those incentives are to draw investors are dead to promote certain kinds of behavior such as investment. The investment tax credit for example has now given a corporation's to buy large pieces of machinery, for example It would not be difficult for Congress to enact an investment tax credit that would force landlords of any building that is 20 years old or depreciated 80% to go in and reinvest to go in and remodeled kitchens repair the roof, but everything is good working order things like that. I think there are a lot of ways to the tax attack. The other ways are some of the Redevelopment projects. There is a redevelopment act on the books in the state of Minnesota. It makes it somewhat more lucrative for investors investors to be in a Redevelopment project and they are in into a new area. As evidenced by the lack of use of that particular act. It's not terribly effective in the opinions of some of the better attorneys in the state. It's the poorest single piece of legislature have written an intelligible in places, but none the less. It indicates. The government of said, yes, there are things we can do and they're taking the first step. That's not a good first step for step and I think that There's an increase the interest in developing cities coming back in the neighborhoods. The government does mirror that and waste both in a federal and local level. Some of you have indicated the importance of confidence neighborhood confidence. I wonder if you would each comment again and and more explicitly on the first step. How do you get reinvestment cycle to start who who are the Risk Takers? How do they get started with some advice? Do they get from the financial lending institutions? How does this all begin on receiving? My next question is are there any sort of programs that the government or the neighborhood could develop that would start a question? We need to know your experience on the cycle who gets in first what brings them into the weekly Investments cycle what sort of advice do they get from The Lending institutions and you want to give us your feelings or experiences? I think I went through pretty much the way that it happened. And I think it was probably a unique case. I'm not sure we are. Like I said, the reason that the first motivated to to invest in a building is that kept driving by it every day on my way to work and saw the for sale sign finally called and was just constantly there. And call the realtor and and talked with a friend and he and I formed a partnership and we got them and then the impact of the compressor without that sense of support within the community. We simply I don't see us taking on that project. Are you saying you would not have invested if the council I don't see that we would have done it now it would just would have been just a sense that you get from that involvement in your case. Somebody had organized the neighborhood and the neg the neighborhood organization made. I don't know you but also work on the bank. the question was who comes in first to what extent is the city government or local communities help? Obviously there has to be some support from the community in one way or another or it won't work and in my own personal cases, I Again, look at the frost had that feeling been purchased year later. Nothing. I ever would have been built because it was being held by someone who wasn't doing anything with it and was speculating with it at the time which was purchased purchased. It was a hopeless problem in the city to its credit was getting ready to force Code Compliance on the building which in this particular case force the owner to sell it because he didn't have any idea what to do with Shelby Avenue. Now, the remaining trapeze aren't developed are being speculated out of out of sight to the point where they can't be privately done the acquisition cost Rises every time that it looks like it's a good idea development. That's why you get the irony of again Frost which is successful sitting next to vacant buildings. There's obviously some reason why that is next question. What can the government do about a government can do something about it by saying that there's ordinances and restrictions on building? That has a way for societal needs structure and that's work because the owners of an have said, well I have to figure out what I'm going to do is put it to productive used within the laws and where somebody who does person that who buys it has to pay a price that makes makes it economically feasible to put it to good use and it has a way of immediately having the building adjust itself to the to the price that it should be sold at St. Paul chooses not to do that right now seems to be in a lot of difficulties in it. I want to ask artists a member of a firm that does a lot of financial advising what sort of things you look for when in a situation investment situation somebody comes in and talk to you about the wisdom of investing. What kind of questions would you ask him? Chris Terry always dealt with tax implications of both ways because most investors have a tax problem or they are looking into some sort of tax implications for a long. Of time and actually sitting down with them and doing the financial consulting of what's going on. What are you getting into? How is it going to work? We're looking at it financially rather than that of the social good social good as is considered by a strong and we don't feel that anything can speak and can succeed unless there's acceptance by the community the projects I have done in st. Paul. We have spent an inordinate amount of time. discussing Civic activities both with governmental agencies and neighborhood groups people on the city council people active in civic affairs other demographic Consultants to see what the tides are in the community are the people interested are they going to stay are the people that are going to stay and then frequent this either S as customers or us as prospective tenants. What economic bases are they going to bring to it? What age group are they in? What income bracket are they in? So we're very very interested in the people. Not only for an immediate project but for neighborhood. What's happening in say about 10 block radius? What's happening in a 20 block radius? What kinds of other projects to make John brought up as well as we have a building that's alive and going and very well in next door. We have two or three vacant but we're very interested in that. The interactions are extremely important. It's very difficult to have any sort of energy by itself people respond to a group environment. So we look for other developments that are going on John and I were speaking earlier and discussing success of commercial ventures in downtown Saint Paul and a comment. I made twins that I feel it. No one commercial Venture in downtown St. Paul can be truly successful unless two or three the others are The proposed new projects there will develop that much more activity. I think the same thing holds true in a residential type mode a successful apartment building is going to draw a successful duplex next door and that's going to draw successful single family dwelling the next door down in the neighborhood starts to build from that and that's very very important to look at the overall neighborhood picture and what's going on. Read, I wonder if you could tell us something about the NHS experiences. I realize it's done. Different sort of institution that is what you are engaged in both the building neighborhood confidence and helping people get financing. What's your experience have investors followed up on you or activities? Let me let me go around the horn a little bit. can a seemingly odd way our NHS program in Marion Park began with a Kind of backhanded welcome by the community. Basically, they had a meeting about the program was offered to them with the understanding. The neighborhood residents would have a majority control of the operating budget. So was given with a pretty open hand. the neighborhood however, spec a specified that. They're not be a code enforcement program. So I will be voluntary. And right now we're confronting the problem of the fact that we can go and knock on every door knob lock your area and say hey look we got your free streets would like to help you out will give you a free home evaluation Spector house. Would you only have to fix the things that are health and safety will tell you where all the where the money is and it's good money available very difficult to persuade people to actually begin doing that takes a long time and I'm beginning and an optimistic again, or I decided to stop being pessimistic then we've done one target area of about 12 blocks and we persuaded about half the people in the neighborhood to be inspected. And that is they've been informed in writing by the city of all the code deficiency. And of those about about 1 and 3 about 17% then I'm all the structures in an area have actually been fixed a date and I think what'll happen if the spring we're going to do Tuesday. We're going to try and move toward asking the city to participate and help us clean up exterior problems, like cars and garbage in their conference. And at the same time the streets will go in and I think it's it's the point art made now. You got to have something going he's making I must be making it to that kind of psychology. I think will happen this coming spring. I'm hoping in the neighborhood plus an extra coat which gets me to John's point. neighborhoods of I think are really afraid to say what they have to do to get it together. I resent that phrase getting it together cuz most of the time it's going to baiting wooly minded thinking instead of saying I've got to do X Y and Z and I better do it fast neighborhoods. Don't think that way back and forth. Is this a real problem for persuade people? If people in st. Paul really wanted to fix up the property out there are legislative Solutions and some heavy-handed levers and the cost me so much money to fix it up tough shit. Carnival. But that's the name of the game the neighborhood to run down because everybody you meet we've all put up with it. We're all used to being kind of dumped on in Merriam Park people don't complain about a car. I don't complain about garbage in any wonder why the house is rundown why there isn't any value in a dumpy neighborhood. And that's what happened to me. I came in the Saint Paul and I I started looking and around Ramsey. He has huge big they will never be bound again. So, how was Saint Paul? attend bedroom dump, isn't that how you know, People don't know yet that never would have happened if people in the city it said wait a minute. We're going to pay taxes. To get city services. We passed ordinances called housing cosmelan them in forest. We want to enforce everywhere. Now, for example, I noticed this I think the city is is beginning to cut out its occupancy certificate program, which means that the renters the people who have no property are the next ones to get screwed. Okay, if you cut back the inspectors who go into apartment buildings and insist, they be brought up to code. They're trying to do it systematically, but I think this day has been cut the cord code which by the way has generated incredible dollar investment in Little Ole Miss Mary and park in one year just inspecting apartment buildings generated better than half a million dollar investment. Not small potatoes. The neighborhoods are afraid of generate. They don't have the structure to generate the pressure. The pressure is the codes to legislative options are available. Think about it. And now my wife and I had a house to her and people are comes and she I used to live here 20 years ago, but the neighborhood went down down. I am getting moralistic, but I think you see my point and I have a house. I could not buy anywhere else. I couldn't buy a to buy room Bungalow for the price. I got this dumb ass great all new wiring Plumbing eight bedrooms, you know, it's gorgeous. I love it. But St Paul at why didn't they see that they put up with it. Then they couldn't put up with any more what they do the breed American response. They left. I don't know if any of you have read Phillip Slater's book. I think it's very predictable America's Society of Dropout. All of us are here because our parents or grandparents dropped out from you got a problem. Play one of David David's original questions to ask. What kind of people are approaching going into investment real estate and I've been delighted to see the past three years and both Minneapolis. And st. Paul that it's not so much the large organized investor the big Capital group with a lot of money that's got 270 unit project going in Los Angeles and two projects and wash and one Cleveland. It's the people that are 25 to 35 years are not terribly wealthy. They're making two of them working making twenty-five $35,000 a year and they're saying listen I can get it 10 bedroom house with wood work real wood floors a huge house That's a classic is beautiful to look at it's not made of clapboard. It wasn't built in 4 hours by a concrete Frame & Company in Wausau. Wisconsin is something that's going to stand for another 20 years and I can work on so that when I'm done with that I can stay here is a beautiful house that in its day was a mansion and isn't that very far away from it today? And I don't use it mine but I contributed a lot of my labor a lot of sanding paint off of Woodwork and a lot of time and money spent having it rewired and it's mine and it's that kind of Pride and accomplishment and investment coming out of a generation. That's 25 to 35 years old that I think is really starting to have a big impact on the inner cities. And I think that's what's going to rebuild them if they're going to be rebuilt and then open the floor in a little effort that my partner and I are building not as often as you just has a really great thing until 4, then I want to I want to say that I'm not sure that it's a great success and that is I Want A promise is just what you said now in terms of how much money you know de we folks Now to really put into that place that is the problem is this and that's why it's kind of a real answer to your original question. There is a way there's only a list of the risks that we are ready to take and when we've done much less in that building then we were hoping to we're hoping that it would look a lot more like that original Vision we had them but then when you we did the plumbing did the electricity and the loans we had to take out in order to do a lot of the mechanical stuff. The cost just way out now so did what we could afford to put into the place and then went we reached a kind of a point where we had to say while I we willing to loan another 10,000. Because if we did have to move or if we did have to sell the building and all we could lose the original investment plus anything that you know that we had to pay in the bank in order to unload it in that sense of so that you know small investors have a real problem then in terms of the limits and we may have bit off more than we could Chew in terms of what was needed in a long-range investment and that particular spot to really do a better job.