City approves amendment extending timeline for Partners for Community Development’s 14-house rehab project

The Finance & Personnel Committee approved a First Amendment to a redevelopment agreement with Partners for Community Development to continue work on 14 homes formerly owned by a private owner known locally as the Sukhawati properties.

Partners CEO Karen Kirchmeyer and Chief Programs Officer John described why timelines need extension: structural deterioration, deferred maintenance and increased construction costs mean several properties must be gutted and rebuilt rather than lightly rehabilitated. Partners said it has completed phase 1 (four homes) and is preparing phase 2, supported by about $700,000 in state rental housing development funds for four homes in the next bundle.

Staff described two key contract changes: (1) a timeline extension to complete remaining phases and (2) a change to the demolition clause so the city will not be required to repurchase properties if demolition proves necessary. Partners said they will bundle state, City of Sheboygan and private funds and pursue capital needs assessments and asbestos inspections now underway.

Alder Decker asked whether some unrehabilitable lots might be better handled through new construction partnerships; Partners said demolition and new construction are on the table and staff have discussed options with planning. Committee members also asked how long the homes would remain affordable; Partners said multifamily rental units will stay affordable while owned by Partners and financing terms (HUD, state programs or Federal Home Loan Bank instruments) will impose affordability terms for the life of loan documents.

The committee approved the amendment by voice vote.