WARREN - Sunshine of Warren Trumbull Inc. is still working to establish a plan to repay a projected $188,600 worth of back property taxes, Anthony Iannucci Jr., its executive director, told council's Health and Welfare Committee on Thursday.
Iannucci is meeting with officers of Huntington Bank today to determine if existing loans of more than half of the 87 houses Sunshine purchased in the early 1990s can be refinanced to lower interest payments.
One of the delays in getting a repayment plan established with the Trumbull County Treasurer's Office is reviewing valuation on 30 of the homes.
"We are appealing what the county is saying their values are," Iannucci said. "If the appeals are successful, what we owe in property taxes will be lower."
In addition, because Sunshine Inc. has sold at least one property and is in the process of selling another property, it is expected to use the profits to pay down its property tax debts.
Iannucci reviewed a 2011 audit conducted by Anderson Metzger and Co. At the end of 2011, once all the bills were paid, Sunshine had a $362 cash balance on its books.
Sunshine Inc. have full audits done every two years.
Iannucci said the 87 single-family residences had a value of approximately $3.68 million, but with depreciation, that value drops to about $1.9 million over the 15 to 20 years the non-profit has had them.
"Averaging the value to each of the houses, they have an individual value to about $22,500 net value," he said.
Sunshine received about $3.6 million in loans from its consortium partners from the city, county and state.
Iannucci said the organization in 2011 had about $8.2 million in assets. Most of the assets are intangible, such receivables and accord interests for the tax credit projects.
He said that over the years, Sunshine, through its Warren First Homes, Warren Homes II & III projects and its Warren Neighborhood Redevelopment LLC has brought in an estimated $15.4 million in value into the city of Warren. About $9.5 million has been from outside of equity investors for the four housing projects.
Sunshine is expecting to buy out the limited partnerships for the 48 Warren First Homes so the homes can be sold to the families living in them at reasonable prices. The Warren First homes were the first tax credit houses built and remodeled by Sunshine nearly 15 years ago.
The audit show three loans, including a $20,000 line of credit owed to Huntington, as well as two loans from the city of Warren , including a $25,000 loan taken for working capital and another $50,000 used to capitalize the NSP rehabilitation of properties.
When Sunshine was first started, Warren and Trumbull county used HOME program loans to finance the purchase of its initial properties. Once the properties were rehabbed, Sunshine borrowed money from Trumbull Savings to repay nearly $1 million of the city's portion.
"These properties were developed with 100 percent debt - roughly half the debt to the bank and half the debt to the city," he said.
Iannucci said for the first 10 years of the project, Sunshine was repaying the loan debt, but eventually found the obligation had become too great to make the monthly payments and pay all of its other obligations.
Sunshine currently owes the consortium an estimated $737,000.
Iannucci said the previous Sunshine director told him that most other HOME programs operating were grant program. They were not required to pay the grant money back to the organizations that provided the funds.
Community Development Director Michael Keys said some of the money Sunshine owes to the consortium may be forgiven as it sells some of its properties.
Prior to Iannucci taking control of Sunshine, a program was developed in which its director decided to rehab five properties in Warren and five properties in the county and sell them to new homeowners. It would not rent the properties.
Using money from the Local Initiative Support Corporation and the Housing and Urban Development's HOME program, one of the 10 properties was rehabbed before funding for the rehabilitation of the remaining properties was terminated.
"The houses sat for a few years because there was not funding to do the rehabilitation," he said. "Several years later, we were able to obtain a NSP grant to do the projects."
Sunshine is in the process of selling the homes.