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.
The city did provide land for Linden Meadows as well as $160,000 of CDBG funds for rehabilitation work on seven of the properties.
The land was a park prior to being a subdivision, and some officials have called for it to return to its original use.
Gahan said Wednesday there have been inquiries about the land from the private sector.
“We have had some interest in the property, and of course the [New Albany] Redevelopment Commission will be handling that,” Gahan said. “That will be on their agenda as we move forward.”
At-large City Councilman John Gonder had proposed that the soon-to-be constructed outdoor aquatic center be located on the site.
With the administration electing to build the aquatic center at the former Camille Wright pool location, Gonder conceded, “That train has left the station.”
But he doesn’t think there will be a shortage of ideas on how to use the Linden Meadows site. Gonder doesn’t view the property as prime for residential development.
“I don’t think right at the moment it’s really housing land because of the horrible noise from the interstate there,” Gonder said in reference to Interstate 64, which passes near the property.
But with the sewer and road work that occurred to prime the site for the subdivision, Gonder said developing the land will probably be an option.
“It’s unfortunate that a lot of money has been sunk into infrastructure there, because I think there will be a pull to try and capitalize on the infrastructure,” he said.
It’s a sizable piece of property, and the city should garner input from residents and officials on what to do with the land, he continued.
“If it’s not going to be something like the aquatic center, which it isn’t, I think it’s probably best to let it kind of simmer for awhile and see what’s the best course to follow,” Gonder said.