Finally, someone developed an idea to help rehabilitate Richmond's blighted neighborhoods that stands a decent chance of success.
But to make it work, the city needs the support of the financial community, which it alienated with the misguided plan to save some homeowners from foreclosure by seizing mortgages from lenders through eminent domain.
Backers of that scheme have tried for a year now to bring their plan to fruition. They've failed miserably, for good reasons, most notably that eminent domain would not solve the problem it purports to and could place the city at great liability.
It's time for city leaders to end that failed experiment and seize the suggestion and offer of John H. Knox, a bond attorney and son of former East Bay Assemblyman John T. Knox. The younger Knox's proposal, if successful, would actually rehabilitate blighted neighborhoods, unlike eminent domain.
He proposes Richmond issue tax-free bonds. While the city would be involved, it would not be guarantor of repayment. The proceeds would be used by a housing nonprofit to buy up distressed homes, often those banks have taken through foreclosure, repair them so they are inhabitable and then sell them to individuals at affordable prices.
There are many variables. Because this plan presents substantial risk to bond-buyers and lacks opportunity for large returns, social investors, perhaps foundations or wealthy individuals looking to help the community, must be found. The Orrick firm, for which Knox works and which makes a fortune lawyering public bond offerings, is willing to provide free legal services that will be needed.
Bond brokers might be required, as will lenders to service loans to homeowners. Banks that currently hold the distressed homes and have been unable to market them must be willing to cooperate by selling them at deeply discounted prices. And construction crews must be found to cheaply rehabilitate the properties.
At every turn, costs must be carefully contained. If everyone pitches in, this plan has a reasonable chance of success. It's creative and it doesn't pit people against each other. Moreover, financial risk would be borne by the investors, not the city.
The City Council recently voted to support the Knox plan. But it undermined that backing by keeping the eminent domain scheme hanging out there. It's time to cut those ties and move on.
Mayor Gayle McLaughlin and City Manager Bill Lindsay can boast that the original plan wasn't a total failure, that it led to Knox developing a better alternative. They should claim a small victory and move on.