Gary Housing Authority tears down $1.5 million downtown Gary affordable housing apartment building that was recently built but never occupied

By Joseph S. Pete

On March 24, 2024

Gary has been plagued by thousands of blighted vacant buildings over the years.

The Steel City has been renewing efforts to knock down abandoned buildings. Starting last week, construction workers have been tearing down a prominent new midrise apartment in downtown Gary that was recently built but never occupied.

Gary approved a $1.5 million, no interest loan for the 700 Broadway affordable housing project in 2011. The building at 7th Avenue and Broadway was funded with a U.S. Department of Housing and Urban Development grant. In 2013, developer John Coldea and his company 747 Broadway Plaza, LLC borrowed another $70,000 from the city for the project.

Work started on the four-story, 18-unit apartment building with five commercial units on the first floor but was never completed. The building appeared to be finished from the outside but no one ever moved in.

It’s now being razed after it was determined it would be more costly to finish the work than to just build a new apartment building there.

“The building at 700-10 Broadway is being demolished because after a plan and an attempt to acquire the building, finish the construction to completion, lease up and operate the property, it was determined that the final cost of repair and completion was close to or greater than the as complete appraised value of the property,” Gary Housing Authority President and CEO Taryl Bonds said. “This, in addition to the notion that there could still remain unforeseen conditions that would add to the total development costs. So, as opposed to chasing costs and unforeseen conditions, we decided, with the city’s and Indiana Housing and Community Development Authority’s concurrence, that it was better to demolish the building and start over, rebuilding it as part of the overall development plan for the Broadway Corridor Project. Northwest Indiana Development Corporation is still required to honor the agreement it has with the Indiana Housing and Community Development Authority.”

Coldea could not be reached for comment. The phone number in city records was disconnected and he did not respond to email.

The 700 Broadway apartment building was deemed 50% complete in 2015 but work stopped shortly thereafter.

“The building has been in an incomplete condition since that time,” Bonds said. “This is why when both IHCDA and the City of Gary decided to foreclose on the developer, we stepped in to see if we could take the project to completion and combine it with our other efforts for the Broadway Corridor Project.”

Gary moved to foreclose on the property in 2019, filing a lawsuit in Lake County Superior Court.

“We don’t know the exact or specific reason or reasons as to why the developer didn’t complete the work,” Bonds said. “However, our suspicion is the complex requirements and restrictions placed on the project due to the funding sources may have contributed to the developer’s inability to take the project to completion and lease up.”

There also may have been an issue with the foundation.

“The foundation’s condition was another potential unforeseen circumstance.  From what we were told by the original developer, he built the new building on the old foundation that was underground,” she said. “But that can’t and couldn’t be verified without exploratory excavation work.  We’ll know what that condition is once the demo contractor gets to the foundation.”

The Gary Housing Authority was never able to recover the funds from the developer, who never repaid the Indiana Housing and Community Development Authority, she said. But the developer did agree to transfer the unfinished apartment building to the Northwest Indiana Development Corporation, the development arm of the Gary Housing Authority.

Gary businessman John Allen, a restaurateur who’s fixed up many vacant properties in the city, was disappointed it wasn’t made available through tax sale and the cost of fixing it up was not publicly disclosed.

“They just just knocked it down and didn’t let anyone buy the building,” he said. “They didn’t let a private company come in on the open market and see if the work could be finished. It was a big public project and now we’re out of the money. We don’t collect any property taxes on it. My biggest issue is with the mismanagement of public funds and assets.” 

The Gary Housing Authority plans to build another affordable housing apartment building on the site. It won’t be the exact same building but it will have to have 18 apartments, including four two-bedrooms and 14 one-bedrooms.

“We will overdesign the new building seeking economies of scale, making it larger and adding more than the 18 units back into the space market,” Bonds said. “Our intent is to design it to fit the scheme and designs that we are planning for the vacant 500 and 600 blocks of Broadway.  The GHA owns the contiguous vacant land immediately south of the 700-10 Broadway parcel.  And we are working with the city administration to accomplish this.”

Mayor Eddie Melton, who just took office and was not involved with the building previously, said he hopes to work with the Gary Housing Authority on future redevelopment projects along Broadway.

“As mayor, it’s extremely important to me that our local agencies are collaborative and transparent in their approach to planning and re-development within Gary. Upon taking office, I shared this vision for downtown with the leadership of GHA,” he said. “I’ve strongly encouraged their organization to collaborate with our administration to develop a long-term strategy for the development of our Broadway corridor. This includes providing access to quality affordable housing for the most vulnerable members of our population. Moving forward, I will require better alignment between the City of Gary and GHA to ensure we are focusing on these priorities.”

This piece was republished from MWI Times.