This is part of a two-part series. Coming tomorrow: Does Cincinnati need a housing court?
CINCINNATI – The city of Cincinnati is weighing legal action against an out-of-town developer that owns nine vacant and decaying buildings in the heart of Over-the-Rhine.
Washington, D.C.-based 2414 Morgan Development LLC has quickly become the “worst” owner of multiple, vacant properties in the historic neighborhood, Cincinnati building inspector Mike Fehn said.
“The part that hurts is they appear to have the money to do the job,” Fehn told WCPO. “They just for some reason are choosing not to do it.”
That job entails stabilizing nine rotting buildings in Over-the-Rhine and a tenth in Avondale, each of which has a multi-year history of building code violations that have rendered half the structures “dangerous and unsafe,” according to city inspection records.
These buildings aren’t just eyesores.
One on East McMicken has a fire escape attached to bricks that are so damaged Fehn said he’s worried “the whole front of the building will collapse.” A building on Findlay Street has floors so rotten they “can’t support the weight of a human being,” he said. And a building on Walnut Street hasn’t had a roof since 2008, resulting in severe water damage to its floors, stairs and walls.
Neighborhood advocates and homeowners worry such advanced decay spread across so many buildings will slow development in Over-the-Rhine, a historic neighborhood undergoing a redevelopment renaissance and an influx of new residents.
“It’s a real struggle,” said Steve Hampton, executive director of the Brewery District Community Urban Redevelopment Corp. He owns property near the building on East McMicken. “It makes it harder for people to see the vision of what the neighborhood can be. It certainly attracts crime, and it just looks bad.”
Owner: We Will ‘Make The City Proud’
For his part, 2414 Morgan Development owner Nigel Parkinson pledged his company would restore the buildings and return them to productive use.
“We know what we’ve gotten into,” Parkinson told WCPO, adding that his company intends to present a redevelopment plan for the buildings in the coming weeks.
“This is not something which we take lightly because it’s our reputation and our name and so forth,” he said. “We’re going to make the city proud.”
Parkinson’s company bought the 10 properties in September 2012 for a total of $1,239,000, according to the Hamilton County Auditor's website.
Silver Spring, Maryland-based Faith Fellowship Ministries International, Inc., was the previous owner of seven of the buildings. The other three were owned by Apostle Joseph Ellis Taylor, the church’s presiding prelate and an acquaintance of Parkinson’s. Faith Fellowship and Taylor had owned all the Over-the-Rhine buildings since 2005. Faith Fellowship acquired the Avondale building in 2010.
Most of the buildings were occupied, low-income rental housing when Taylor and Faith Fellowship bought the property, Fehn said.
City code enforcement records show a number of the properties began to decline even before the acquisitions. Once the buildings were ordered vacant, though, that decline hastened.
The building on Walnut Street, for example, has been open to the elements since the after-effects of Hurricane Ike blew off the roof in 2008.
Parkinson said his company hasn’t hired anyone to repair the roof, or even place a tarp atop the structure, because the building is “too dangerous.”
“When people buy a group of buildings like this, knowing they need all this work, without a plan to do anything with it, why?” asked Edward Cunningham, manager of the city’s property maintenance code enforcement division. “So why they would take on this kind of situation without a plan, without financing, at least to stabilize them – it makes you scratch your head.”
Parkinson said his company has “more than enough” money to stabilize and redevelop the buildings.
He noted that some other buildings near the 2414 Morgan Development properties look worse from the outside than his do.
“We want to be a good partner,” he said. “We’re not a slumlord. We want to go in there and make a difference in the community.”
‘Not Results Oriented’
Parkinson and Harold Hamlette, the company’s attorney, have been to town to explain the developer’s intentions for the property.
They appeared before the city’s Board of Housing Appeals on April 13, 2013, to appeal the city’s Vacant Building Maintenance License, or VBML, fees.
The city’s VBML program is designed to prevent vacant buildings from becoming hazards by requiring owners to stabilize the structures, barricade open doors and windows and keep the structures weather-tight to prevent deterioration that can make them dangerous for first responders and the public.
At the Board of Housing Appeals meeting, Parkinson said the company had hired a contractor to clean out rubbish and debris from the buildings as a first step to making them comply with the city’s codes.
board gave the company 90 days to show some progress in cleaning out and stabilizing the buildings.
At a July 1, 2013 meeting of the board, a contractor hired by Parkinson’s company asked for a continuance.
After Fehn testified that the company hadn’t done anything to stabilize the structures, the board voted to move forward with the hearing and denied all the company’s VBML appeals.
“They are the epitome and the poster child for how the system is not results-oriented,” Board of Housing Appeals Chairman Michael Morgan said of 2414 Morgan Development and Taylor and Faith Fellowship, the properties’ previous owners.
Morgan, who has no connection to Parkinson’s development company, noted that Fehn testified at the July 1 meeting that Faith Fellowship and Taylor owed the city more than $120,000 in fines and fees related to the 10 properties before selling them.
The city even issued a warrant for the arrest of Taylor in July 2012 in conjunction with one of the buildings in an effort to force Taylor and Faith Fellowship to repair the properties. The warrant, which remains active, was issued on charges of failing to comply with orders from the director of buildings and inspections in violation of the Cincinnati Building Code.
Faith Fellowship and Taylor sold to 2414 Morgan Development two months later.
“It’s not really about who you scare and whether or not you can lock them up. Sometimes that works, but the instances when it works are vastly outweighed by the times when it’s just not an effective threat,” said Morgan, who stressed he was speaking as an Over-the-Rhine neighborhood advocate, not in his capacity as chairman of the Board of Housing Appeals. “They’re not going to kick somebody out of jail who just shot his wife to make room for somebody with code violations.”
City Options Are Limited
Some neighborhood advocates worry the system in place to address problem properties can end up making neighborhood blight worse instead of better, in part because of how long the typical process takes.
When the city of Cincinnati is dealing with owners who are not taking care of their property, the city typically follows a series of steps, said Jessica Powell, an assistant city solicitor.
First, a building inspector inspects the property and issues orders for whatever repairs must be made. If repairs are not made within a reasonable amount of time, the city has various options, Powell said. The city can:
• Hold an administrative public nuisance hearing. Officials start this process for buildings that are uninhabitable and have a long history of non-compliance with city codes, she said.
If a property is so badly damaged that it represents a threat to public health and safety, city officials can declare it a nuisance. That can lead to demolition of the property or the city can decide to fix the problems and bill the property owner for the costs. Demolition is a far less frequent option in Over-the-Rhine because it’s a historic district.
• Pursue criminal prosecution. This usually happens through Judge Russell Mock’s housing court docket in municipal court. There, the city can charge owners with failure to comply with the city’s building code, Powell said.
There are two major limitations of that strategy, however. First, it’s difficult to force out-of-town property owners to appear, she said.
Also, whether they’re in town or not, corporations and limited liability corporations cannot be “tried in absentia,” Powell said. That means if those owners don’t show up, the city can’t proceed with the prosecution.
• File a civil public nuisance action in common pleas court. The city can ask the court to declare the property a public nuisance and order its owners to comply with the city’s building codes. If the owners don’t comply, the court can appoint a receiver to take control of the property and make the repairs.
“None of these options are a silver bullet, and you really have to assess the circumstances with a specific property and a specific property owner,” Powell said.
All the options also take time. And the longer decaying buildings wait without repairs, the more costly it becomes to stabilize them, said Morgan, who owns property on Walnut Street across from the building missing a roof.
Slowing The Decay Early
The cheaper option is for the city fix problem buildings before they deteriorate too much, and the city can do that through what’s called its SOS Program.
Cunningham said the city spends about $200,000 annually on the SOS program with funding from the federal Community Development Block Grant program. But SOS competes with demolition for resources. Last year, the city spent $800,000 on demolition.
“It might cost $50,000 to stabilize a building,” Cunningham said. “You can tear down the same building for 10 or 15 thousand. So as far as abatement of blight and safety hazards, the bang for the buck is much greater for demolition.”
Plus, many neighborhood groups “really want to see demolition of blighted and unsafe buildings first,” Cunningham
If the city could have spent $10,000 to replace the Walnut Street building’s roof in 2008, Morgan said, that money could have stopped most of the deterioration that has happened since.
“It is now rotten from the top to bottom,” Morgan said. “It will now cost obviously hundreds of thousands of dollars just to get that building back to what the building was like before the storm in 2008.”
Spending money on stabilization up front would cost less and, ultimately, save time, too, Hampton said.
“We would love for that to be the model versus fighting with property owners until it’s too late,” Hampton said.
Of course, it’s too late for that with the 10 buildings now owned by 2414 Morgan Development, several of which sit near the city’s streetcar line.
Already, 2414 Morgan Development has racked up $53,800 in fines and fees for the properties, according to a city accounting provided to WCPO.
“Hopefully the fines will get them motivated to start doing something,” Cunningham said.
And while the city does have a collections department that goes after those fines, that isn’t the point, said Powell, the city lawyer.
“The biggest goal for the city with this is not money,” she said. “It’s compliance and making sure the property is safe.”
Property owners like Morgan and Hampton hope that will lead to additional redevelopment in the historic neighborhood, too.
“It’s a choice,” Morgan said. “You can either invest in saving and redeveloping your building stock to increase your tax base or you can let it decline or you can bulldoze your tax base. Of the three options, the long-term most fiscally sound one is to stabilize and find ways to redevelop these buildings.”
For more stories by Lucy May, go to www.wcpo.com/may . Follow her on Twitter @LucyMayCincy.
For more stories by Dan Monk, go to www.wcpo.com/monk . Follow him on Twitter @DanMonk9.