The first of two parts.
Carolyn Milligan doesn't know it, but she lives around the corner from a broken promise.
Her Monterey Avenue duplex in Modesto backs up to an empty lot. Ten years ago, the city loaned $100,000 to a nonprofit developer who promised to build houses on four such lots in the airport neighborhood.
More than 200 people signed up on a waiting list for the houses. But the city stopped doing business with the nonprofit developer over concerns about the organization's bookkeeping.
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The houses were never built.
Today, the lots are still empty. On the one near Milligan's tidy house, a discarded couch nestles in tall grass.
But Milligan is more worried about the trash-strewn property next door, where a house burned down last year. "The city was supposed to do something about that, but nothing happened," she said recently.
The same could be said of other promised improvements in the airport neighborhood. The ramshackle area in southeast Modesto has made frequent appearances on city and county to-do lists over the years. It never seems to get to the top.
The area is home to about 500 households bordered by Yosemite Boulevard, the Modesto Airport, the Tuolumne River and E.&J. Gallo Winery. Settled by Dust Bowl immigrants in the 1930s, it was once known as "Little Oklahoma."
It's still home to families hanging on to Modesto's bottom rung. It's mired in poverty and crime, and lacks basic services such as sidewalks and grocery stores.
Some progress has been made. There are now curbs and gutters where children once walked in ankle deep water after storms to Orville Wright School. A park opened behind the school in 2005, built after an 11-year lobbying effort by residents.
A mobile health clinic is stationed outside the school; a sheriff's substation opened in the neighborhood in 2003.
But despite decades of promises from city and county officials, systemic change has proved elusive. Millions of government dollars that could have shored up the neighborhood have gone unspent, and plans for the neighborhood's revival have gathered dust in city and county offices.
Unspent money for repairs
In his 2009 state of the city speech, Mayor Jim Ridenour delivered tough news about Modesto's budget woes, telling the city to brace for cuts to police and fire. But his talk included a sliver of hope.
Modesto would soon receive $8 million in federal relief, $2 million of which would be aimed specifically at buying and fixing up foreclosed homes in the airport neighborhood and in west Modesto.
The city's application for the federal grant described the airport neighborhood as "the hardest hit of the hard hit areas." The neighborhood, said the city, "has a disproportionate concentration of foreclosed and abandoned properties, where approximately 30 percent of the homes are vacant."
The money could have gone a long way. The median price for a house in the airport neighborhood was $37,000 in the summer of 2009.
But more than a year after the city announced the program, none of the money has been spent in the neighborhood.
The city bought one house there in 2009. The house was subsequently vandalized, and when the buyer tried to nego- tiate a lower price, the deal fell through.
"I would have preferred to have seen more homes purchased in the airport," said Judith Ray, Modesto's deputy director of Parks, Recreation and Neighborhoods. "The developers and nonprofits worked really hard to make that happen, but there are some things that are out of your control."
Ray said the city was constrained by rules on how it could spend the money. The city was only allowed to use the money on houses that had entered the foreclosure process, she said. That meant the city couldn't compete against cash investors who made "short sale" offers and bought houses before they went into foreclosure.
The city wasn't the only agency that won federal funding that could have helped. Stanislaus County received $9.5 million from the same program, and set aside $550,000 for the airport neighborhood.
So far, the county has purchased one house there, said Stanislaus County Development Manager Aaron Farnon.
County representatives had a hard time buying houses there because they were often competing against the developers working with the city, Farnon said. The city's developers hadn't been informed that they were only supposed to make offers on houses in city territory, he said.
The city had promised to partner with the county when it received the federal money. The airport area is a mix of city and county territory.
"The housing conditions are below standards and the residents do not have the resources to help themselves. The collaboration between (the city and county) will ensure that the neighborhoods as a whole are improved to make the most impact," the city's funding application reads.
In the late 1980s, the county added the airport neighborhood to its redevelopment area. Redevelopment is a powerful tool that cities and counties use to steer tax money into blighted areas. The money can shore up rundown neighborhoods by adding infrastructure improvements such as curbs and gutters, and eventually spark new business investment and jobs. The city used nearly $1 million in redevelopment money to pay for street improvements around the Gallo Center for the Arts in downtown Modesto, for example.
With memories of 1960s-era "urban renewal" projects fresh in people's minds, some residents worried that declaring the airport a redevelopment area would lead to the bulldozing of their houses.
One early environmental impact report on the county's redevelopment plan suggested that the airport neighborhood wasn't fit to live in. Its older homes were too affected by nearby industries such as Gallo, the airport and heavy truck traffic, the report said. Its authors suggested moving airport residents to more "environmentally sound" areas elsewhere in the city.
That didn't happen.
Neither did the widespread improvements promised when the redevelopment area was created.
In the airport neighborhood, the county has limited redevelopment activities mostly to working with Habitat for Humanity, Farnon said. The nonprofit has built or fixed up about five houses a year in the neighborhood for the past five years.
The county doesn't want to build sewers, curbs, sidewalks and gutters until there's a way to pay to maintain that infrastructure. That only happens when the city annexes a county area, or residents vote to tax themselves for the services, Farnon said.
"We haven't made any infrastructure improvements because we haven't had the direction from Modesto that it's the priority," he said.
But they are a priority for 19-year-old Laura Chavel, who's lived in the airport neighborhood her entire life. She and her family live in a well-kept house on South Conejo Avenue, with pink and white impatiens in pots near the front door.
She said she's seen "a lot of shootings and gang stuff." But that's not her main complaint. "It's not so much the gangsters, it's the sidewalks," Chavel said.
In 2006, the Modesto City Council approved a plan to target the airport neighborhood with a revitalization strategy. The ambitious, five-year vision called the airport neighborhood a "gem in the rough." It promised to bring lasting change and true economic development -- not just short-term fixes -- to the neighborhood.
The city's bold plan included building a community center on an empty lot at Empire Avenue and Oregon Drive, attracting a full-service grocery store to the neighborhood, reviving a neglected community garden, starting a Neighborhood Watch group, starting a tool bank for residents and giving small loans to businesses. The Bee hailed the new plan with a story headlined "Airport Neighborhood May Take Wing."
Since then, progress has been slow. The city didn't win federal approval to move ahead with the strategy until late 2008.
With that hurdle cleared, Modesto could have awarded federal money to organizations that directly serve the airport neighborhood. That didn't happen until this month. At its May 11 meeting, the City Council approved a $20,000 grant to the Healthy Start site at Orville Wright School.
The vision of the commu- nity center, small business loans and a Neighborhood Watch group have yet to become a reality.
Airport resident Alex Salas, 22, said he wasn't aware of the city's plans for his neighborhood. If he could tell officials what his neighborhood needs, he'd put more cops at the top of the list. He thinks the airport neighborhood could benefit from a gang injunction, the anti-gang measure that law enforcement has used to fight gang activity in south Mo- desto.
Change on the horizon?
Despite the history of failures, city and county officials say they're poised to make lasting, large-scale improvements in the airport neighborhood.
City officials say they'll make better use of a second round of federal funding Modesto received in January. The city won $25 million, of which $10.5 million will pay for buying and fixing up foreclosures and vacant properties.
Some of that money will be used to provide incentives to nonprofit developers working in the airport neighborhood, said Hugo Ramirez, a community development specialist with the city. A lifelong resident of Modesto, he was hired in February to oversee the strategy. He's been meeting regularly with neighborhood leaders to discuss the city's role in improving the neighborhood.
City staff members are recruiting a full-service grocery store. Modesto recently set aside $1.4 million in federal money for curbs, gutters and sidewalks on Empire Avenue between Monterey and Hillside. There's now a code enforcement officer who works exclusively in the airport neighborhood 40 hours a week.
The city has $94,000 in federal money to promote economic development in the area, Ramirez said. Some of it could help neighborhood residents form small businesses.
"We actually have a budget for activities that aren't just providing services and creating dependency," Ramirez said. "This is real community capacity building. It's people working with one another to achieve change. It's working toward self-sufficiency."
Carolyn Milligan is perhaps a model for that self- sufficiency. She moved into her Monterey Avenue house three years ago. She's made several improvements, building two garden boxes in her front yard and planting two trees. After a gang member hid in her back yard, she built a fence to keep strangers out.
"I'm trying to keep this place up nice," Milligan said.
She doesn't know about the government's broken promises, but she said, "If they could keep up the neighborhood more, it would be appreciated."
MONDAY: Residents band together to seek solutions.