CINCINNATI – New court records detail just how costly and long the road to repair may be for a cluster of neglected low-income apartment buildings that are home to hundreds of local residents.
Hamilton County Common Pleas Court Judge Beth Myers is expected to decide Monday who might be best fit to manage five apartment communities she deemed public nuisances late last year.
The properties -- owned by New Jersey-based PF Holdings LLC – are the focus a lawsuit filed by the city of Cincinnati and low-income housing advocates last year. The groups say the out-of-state investors ignored criminal activity and “willfully” concealed building hazards to cover up unsafe living conditions.
All told, more than more than 1,800 health and safety code violations have been issued for the buildings, which include: Entowne Apartments at 3652 Reading Road in Avondale, Burton Apartments at 1000 Burton St. in Avondale, The Alms apartments at 2525 Victory Parkway in Walnut Hills, Shelton Gardens at 2000 Westwood Northern Boulevard in Millvale and Reids Valley apartments at 1990 Westwood Northern Boulevard in English Woods.
The troubled buildings are among nearly a dozen properties purchased by PF Holdings across the city in 2013. The deal ensures the out-of-state landlord gets more than $5.3 million annually from the U.S. Department of Housing and Urban Development (HUD) to offset the costs of rents for nearly 600 apartments. Additionally, each tenant pays at least 30 percent of their income toward rent.
In a hearing Friday, Myers confirmed she will name a receiver to manage the buildings and tackle the lengthily list of code violations and repairs – estimated at nearly $3 million, according to court filings made by U.S. Bank Wilmington Trust, a lender for the properties.
The lender has asked the court to appoint Jodi Ridings of Milhaus Development to manage the deteriorating buildings. The documents detail Ridings' next steps should she be appointed receiver as well as a costly list of “urgent” repairs deemed necessary to ensure “life safety” at each of the properties.
Under the plan, Ridings’ first 45 days on the job would include a “comprehensive due diligence inspection” of each property.
At the same time, she would be responsible for making sure a list of “urgent” repairs are made within 30 days, including fixing broken elevators at the Alms, broken sewer lines at Burton and Reids Valley and repairing fire escapes at most of the properties.
Meanwhile, the lender estimates that more than $2.8 million in repairs and upgrades are needed across all of the properties to bring them in line with HUD’s standards, according to the court documents.
Money for the upgrades will come from the roughly $253,573 paid out monthly by HUD to cover rents, as well as advances from U.S. Bank of up to $1 million, according to the documents.
“These properties are in terrible shape,” Christopher Cathey, an attorney for U.S. Bank, told Myers on Friday. “It’s not every day that HUD shows up at a receivership hearing. It’s very clear that the properties are not in a safe, decent and sanitary condition because the defendants have not done what they needed to.”
If Ridings is named receiver, her firm would be paid at least $2,000 a month for its work.
Based in Indianapolis, Milhaus is the developer behind the Gantry in Northside, a $13 million remake of a former lumberyard into new apartments and street-level retail space. Court records show the firm also has experience managing the low-income properties, including the local Asmen and Westwood Apartments.
Myers said Friday she will likely appoint Ridings to manage the PF properties, but first agreed to give the landlord the weekend to look over the lender's plan.
PF Holdings' attorney Steven Rothstein has contended the property owners have invested "hundreds of thousands of dollars" to repair a host of issues they inherited when they purchased the properties more than two years ago.
"Every spare dollar that the ownership has over and above the mortgage, taxes and insurance is being devoted to maintenance," Rothstein told WCPO late last year.
Federal housing officials have decided that unless major upgrades are made, residents at each of the apartment communities will be forced to move.
Today’s hearing is slated for 9 a.m.