By Howard Greninger, The Tribune-Star

TERRE HAUTE - A $1.85 million state grant will help Terre Haute officials revitalize a central eastside neighborhood.

Lt. Gov. Becky Skillman, in a Wednesday stopover at Terre Haute International Airport-Hulman Field, announced neighborhood stabilization grants to four cities allowing them to buy abandoned or foreclosed homes, demolish homes or redevelop vacant properties, and help low-to-moderate income home buyers purchase properties.

In all, more than $8.2 million in grants has been awarded to Terre Haute, Linton, Brazil and Bicknell.

"I see communities across the state with varying needs and most cities have a unique set of issues based on population or on a particular region of the state or a community's history, but I am confident that one problem every community struggles with is revitalizing their neighborhoods, having foreclosed homes and having vacant properties," Skillman said.

"I think it is evident by cities the size of Terre Haute to cities the size of Bicknell," she said.

Indiana received $83 million from the federal 2008 Neighborhood Stabilization Act, which is not part of the federal stimulus plan, Skillman said. Of that, Indiana two months ago set aside $33 million to help low-to-moderate income home buyers purchase foreclosed homes.

The remaining $50 million was awarded as grants to communities this month. Eighty-three communities and non-profit organizations applied and 21 grants were awarded, Skillman said

Money must be assigned to a specific address by September 2010 and has to be spent by March 2013, she said.

"The state's Housing and Community Development Authority will continue to monitor the projects. It is a pretty strict criteria by the federal government," she said.

The grants, Skillman said, went to communities with the greatest need. "The community had to have a comprehensive revitalization plan in place and had to prove there was experienced staff to handle the project," she said.

Terre Haute's targeted area is from 13th Street to 25th Street and Eighth Avenue to Wabash Avenue, said Mayor Duke Bennett. This area has a high percentage of abandoned and foreclosed homes as well as vacant properties, the mayor said.

"Anytime you have an empty house, it is ripe for criminal activity, arsons, and just becomes a safety issue," the mayor said. The funding will allow the city to return vacant or condemned property to city tax rolls and help return housing to the city neighborhood.

Bennett said he hopes new homes will encourage private developers to construct single-family homes or apartments in the targeted area.

The city will acquire land and rehabilitate 30 homes; acquire land and build 30 new homes; and demolish 30 homes. Those properties would then be available for future home development.

In last five years, 117 homes have been demolished in the target area, said Phil Kesner, grants/planning administrator for the Terre Haute Department of Redevelopment.

"This area has some of the older housing stock in the city. Most of the homes were built prior to 1940," Kesner said. Homes that are to be demolished are abandoned and have been condemned as unsafe structures, he said.

New single-family homes or apartments will be two- or three-bedroom units and must be sold to low-to-moderate income families whose income does not exceed 120 percent of the city's median income, Kesner said. The city's median income is $51,900 for a family of four.

"We are trying to focus on stabilizing the neighborhood and revitalize it," Kesner said. With more homes occupied, it will also provide an increase in population to inner city schools and help reverse declining property values in the target area, he said.

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