WARREN - In 2008, the city of Warren received more than $2 million in Neighborhood Stabilization Program funds, about one-fifth of which was earmarked to renovate houses.
Between 2010 and 2012, Sunshine of Warren Trumbull Inc. used $320,317 to rehabilitate seven homes that it purchased for $142,800. All seven are now vacant.
The total purchase and rehabilitation price for the seven houses totals $463,117. Sunshine is attempting to sell them for $247,500. The Trumbull County Auditor's Office appraises them at $111,500.
Purchase price: $27,150; Rehab cost: $72,000
Current value: $16,300; Asking price: $39,500
Current status: Vacant
Community leaders and organizations created to help the city reverse a shrinking population said they are troubled by how taxpayer dollars were spent.
"Whether this is success or failure is not dependent on whether the project initially makes money, but whether it is joined by people in the private sector in making investments," said Dan Crouse, a longtime local Realtor and former city councilman.
Crouse said that by rehabilitating so few houses with so much money, and by not targeting a specific location, Sunshine failed to entice private investment.
"If the goal was neighborhood stabilization, then this failed on economic and social levels," Crouse said.
Sunshine Executive Director Anthony Iannucci Jr. did not respond to multiple requests for comment this week, but one city official tried to explain the program.
"We initially were going to allow Sunshine to rehabilitate four properties and Habitat for Humanity to rehabilitate four houses for sale," Warren Community Development Director Michael Keys said. "Habitat officials discovered they could only do two houses, so we went back to Sunshine and asked if it could do more."
The two Habitat homes are now owner-occupied.
Sunshine has not found any buyers as it tries to recoup some of its investment.
For example, the renovation costs range from $72,000 for a house at 194 Belmont valued at $16,300 to $31,070 for a 1407 Belvedere property with a value of $27,000, according to numbers provided by the city. Sunshine purchased the Belmont house for $27,150 and the Belvedere house for $15,000.
Those numbers are baffling to Dennis Blank, who has been heavily involved in reviving Warren's housing stock.
Blank is spearheading a program called Gregg's Gardens, an effort to make houses in the Garden District, northeast of downtown, more attractive for people to purchase and rehabilitate. Most of the seven houses Sunshine rehabbed with NSP money are in or near the Garden District.
When told about Sunshine's investment, Blank said, ''I would say that is a mistake. If I couldn't buy and rehab with a total investment of $50,000 or less, I would take a pass.''
He said about eight people have purchased and rehabilitated homes in or near the Garden District for a substantially smaller investment.
The director of Trumbull Neighborhood Partnership, which has advocated for a strategic housing demolition and rehabilitation plan, said many more houses could have been rehabbed for more than $300,000, and the larger volume could have had a greater impact on stabilizing a neighborhood.
"There doesn't appear to have been much strategy around such a large investment," Martin said. "In a climate of limited resources, Warren has to capitalize on every opportunity to revitalize its neighborhoods. We cannot afford efforts that lack foresight or accountability."
While the results might not be great, Councilman Jim Valesky, D-at large, believes Sunshine's motives remain good.
"They wanted to provide lower income families the dream of home ownership," Valesky said.
One such person seeking home ownership is Chelsey Hinkle.
Hinkle, 21, last week obtained the list of homes from Hallmark, which manages properties for Sunshine, and walked around each of them. She and her husband, Kyle, are looking to buy a home for their growing family.
"I like the house I saw on (728) Olive and two of the homes on Belmont," the Bazetta woman said. "They were the nicest of the homes on the list."
With two children and a third on the way, she expressed some concern about the neighborhoods, but not enough to stop them from buying.
But Hinkle's interest is not enough to quell the concerns raised by Janet Hazlette, a leader with the Mahoning Valley Organizing Collaborative and the Warren Neighborhood Leadership Council. Hazlette said the issues with Sunshine go beyond these seven rehabilitated homes. She wants a more in-depth examination of Sunshine, the companies to which it awarded construction contracts and how it received taxpayer funds from the Warren Community Development Department.
"The questions about Sunshine continue," Hazlette said. "The Neighborhood Stabilization Program (NSP) required some monies be spent on rehabbing homes. Sunshine was given over $300,000 of public money to rehab seven homes in Warren.
"And what have the residents of Warren received in return for several years of patience and hundreds of thousands of public dollars? Seven still-vacant houses.
"Were other companies given rehab monies, and if so, what is the status of those homes? How did Community Development award this money? Is information about these rehabs available for public review? The lack of transparency continues to trouble the WNLC."
Sunshine was created in the early 1990s by the city and Trumbull County as a way to, according to its articles of incorporation, develop "decent housing that is affordable to low and moderate income persons in Trumbull County."
Since that time, it has received millions of dollars in public funding, much of it channeled through Keys' Community Development Department. Iannucci has maintained that Sunshine is a private, nonprofit corporation and therefore permitted to keep its records private.
Trumbull County commissioners disagree and have asked the city to request a state performance audit. The Ohio Attorney General's Office has been asked to investigate Sunshine and said that an investigation could include Sunshine's board of directors.
Tribune Chronicle editor Guy Coviello contributed to this report.