CINCINNATI -- A court-appointed receiver will manage a cluster of taxpayer-funded apartments so poorly operated and neglected they were deemed public nuisances late last year.
Just who that new manager will be is in question, as Hamilton County Common Pleas Court Judge Beth Myers weighs who might be best fit to improve living conditions at the five apartment communities where the city has issued more than 1,800 city health and safety code violations in recent months.
The properties -- owned by New Jersey-based PF Holdings LLC -- are home to hundreds of area residents and families.
Meyers in December declared the buildings public nuisances after months of legal wrangling by the city of Cincinnati and low-income housing advocates who last year filed a lawsuit against PF Holdings. The lawsuit claims the out-of-state 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 Millvale and Reids Valley apartments at 1990 Westwood Northern Boulevard in English Woods.
The troubled buildings are among nearly a dozen properties that PF Holdings LLC purchased 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 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.
During Friday's hearing Meyers, said a receiver will undoubtedly be put in place to manage the properties and ensure that rental income is used to tackle the lengthily list of problems. She's holding off until Monday to make the final decision on who that manager will be.
U.S. Bank Wilmington Trust, the lender on the mortgage for the properties, has asked the court to appoint Jodi Ridings of Milhaus Development to manage the deteriorating buildings.
Meyers said Friday she will likely appoint Ridings to manage the properties, but first she's giving PF Holdings the weekend to look over the lender's plan to improve the properties. 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.
That plan, submitted to the court Friday morning, wasn't immediately available to reporters. Monday's hearing is slated for 9 a.m.
Meanwhile, federal housing officials have said hundreds of residents who live in the PF properties may be forced to move unless major upgrades are made. “Substantial investments” are needed to restore the buildings, including “replacement of major systems,” according to a court filing made this week by HUD.
The upgrades should also include investments “such as security systems that do not currently exist” at some of the properties in order to bring the buildings in compliance with HUD guidelines.
The properties “will require more than their routine maintenance in the ordinary course of business,” HUD’s filing states. “The Receiver can therefore only succeed if she has an adequate budget together with the dedicated sources of funding.”
HUD has asked the court ensure that the any receiver put in place be required to address the properties' long list of problems before allowing more mortgage payments to the lender, U.S. Bank Wilmington Trust.
If a court-appointed receiver fails to address the problems, HUD says it will be forced to provide housing vouchers to the residents who will have to find new homes “in spite of the tight housing market for low-income rentals."
U.S. Bank has told HUD that it plans to “advance funds necessary” to improve the properties, according to court papers. But the housing agency said in its filing that it has yet to see a proposed budget and plan for that work.
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.
WCPO spent months in 2015 covering the impact of problem properties on tenants, neighborhoods and the regulators who are struggling to keep track of them. Read the entire eight-part series here.
Check out the interactive below to search problem properties by Cincinnati neighborhood.