NEW ALBANY —
PNC Bank has relinquished its interests in the former Linden Meadows subdivision, city officials confirmed this week.
PNC held the primary note on the property after the New Albany-Floyd County Community Housing and Development Organization, or CHDO, defaulted on a $1.1 million loan in 2009.
Houses were moved to Linden Meadows following the expansion of Floyd Memorial Hospital and Health Services with the goal of filling them with low-to-moderate income homeowners.
However, a lawsuit filed by landowners in the area over ownership of the property, as well as a sluggish economy, delayed the sale of almost all of the houses, and CHDO eventually filed for bankruptcy.
State and local agencies attempted to find a new developer for the site, but an agreement couldn’t be reached with PNC on the money owed to the bank.
Without a new developer and with the subdivision falling into a blighted state, 16 houses in Linden Meadows were condemned and razed last year with the approval of Mayor Jeff Gahan.
Though ownership of the property is still in question, the ceding of its interests in the property by PNC Bank puts the city in a stronger position to control the future of the site.
“We’re not the owner, but we’re the No. 1 lien holder,” said David Duggins, director of economic development and redevelopment for the city.
The issue was discussed while the New Albany City Council was weighing this year’s Community Development Block Grant plan, as CDBG funds had been earmarked previously for the failed subdivision.
Duggins said there are some smaller liens held by other parties on the property, but added the city is in the process of foreclosing on the subdivision.
Most of the funding for the original project was provided by PNC Bank, the Metropolitan Housing Coalition and the Indiana Housing and Community Development Authority.