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Lawsuit: "Unacceptable" hazards plague renters

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Posted at 8:00 AM, Jan 16, 2016
and last updated 2016-01-16 11:44:34-05

By the end of this month new management could be in place for a cluster of taxpayer funded apartment communities plagued by mounting health and safety code violations.

Hamilton County Common Pleas Court Judge Beth Myers in December deemed five buildings owned by New Jersey-based PF Holdings LLC as public nuisances.

The decision followed months of legal wrangling by the city of Cincinnati and low-income housing advocates who last year filed a lawsuit against PF Holdings, claiming the investors ignored criminal activity and “willfully” concealed building hazards to cover up unsafe living conditions.

The properties include: Entowne Apartments at 3652 Reading Road in Avondale,  Burton Apartments at 1000 Burton St. in Avondale, and The Alms apartments at 2525 Victory Parkway in Walnut Hills, Shelton Gardens at 2000 Westwood Northern Boulevard in English Woods, Reids Valley apartments at 1990 Westwood Northern Boulevard in English Woods,

A hearing scheduled Friday in the case was canceled. Myers is now slated to decide on Jan. 29 whether to appoint a receiver to manage rental income at the properties and ensure the lengthily list of code violations is addressed.

Recent court filing show that PF Holding’s lender for the properties -- U.S. Bank Wilmington Trust -- has asked the court to appoint Milhaus Development to manage the deteriorating buildings which are home to hundreds of low-income residents.

Based in Indianapolis, the real estate firm is the developer behind the Gantry in Northside, a $13 million remake of a former lumberyard into new apartments and street-level retail space.

“The court’s finding of public nuisance demonstrates that if a receiver is not appointed, the properties will continue to suffer from lack of maintenance and repair and continue to pose unacceptable health and safety risks,” state U.S. Bank’s court filing.

 

A chair and some trash sit in a stairwell in Entowne Manor (Phil Didion for WCPO).

The lingering lawsuit and more than 1,800 building code violations have also led U.S. Bank to file for a foreclosure on the properties. Officials with the Legal Aid Society of Southwest Ohio say they’re to working to ensure the properties remain dedicated as affordable rental housing should the foreclosure move forward and the properties eventually sold.

“The foreclosure was something we expected and isn’t something that necessarily makes things worse for residents,” said Nick DiNardo, an attorney with Legal Aid which represents several of the building’s tenant associations. “The good news is, while the tenants can’t pick who the buildings would be sold to, they do get some input and a have a voice in the process.”

WCPO spent months last year covering the impact of problem properties on tenants, neighborhoods and the regulators who are struggling to keep track of them. This story is part of that series. Read the entire eight-part series here.

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 in November.

The troubled buildings are among nearly a dozen properties purchased by  Holdings LLC in 2013 across the city. The deal ensures the out-of-state landlord gets more than $5.3 million annually from taxpayers to offset the costs of rents for nearly 1,000 Cincinnati residents. Additionally, each tenant pays at least 30 percent of their income toward rent.

PF Holdings has asked the judge to dismiss the request that a receiver be put in place to manage the buildings.