The Department of Housing and Urban Development has decided to acquire Newfields, a government-sponsored new community outside Dayton, Ohio, which has run into money problems.
The Newfields Development Corp. found itself unable to continue interest payments last winter on federally guaranteed bonds. Last week, HUD paid off the $18 million in loan guarantees as a prelude to acquiring the project.
The brings to seven (out of 13) the number of new towns HUD's New Communities Development Corp. has had to bail out because the partnership of a private developer and the federal government went sour. It was also announced last month that HUD had decided to abandon two other new communities, Riverton near Rochester, N.Y., and Cedar-Riverside in Minneapolis. Another new town near Minneapolis. Jonathan, will be acquired but will remain an official new town, confirming to government specifications for density, amenities and other features.
These experimental communities were intended, with federal assistance, to overcome urban sprawl and achieved integration. Newfields consists of 4,000 acres, much of it agricultural land.It was to have cost between $700 million and $1 billion and to have housed 40,000 inhabitants over two decades.
As it was, 44 houses and condominimus were built before private builder Donald L. Huber ran out of money. He claimed that government red tape made it difficult for him to sell lots. Lands costs were also a factor as land was originally acquired by the developement corporation at inflated prices. There are still 500 improved lots awaiting purchasers.
A spokesman in HUD's New Communities section said it was too early to tell what would happen to the undeveloped land in Newfields. At the Granada, N.Y. project, some 1,500 acres were sold to a different, unassisted private developer, some were deeded back to the original mortagees to settle claims, and HUD disposed of the rest.