The future of the Fay Apartments is in doubt, and the City is exploring its options should the West Side complex close down.
A recent report issued by City Manager Milton Dohoney, Jr is the result of a March 5 motion by City Councilmember Jeff Berding, signed by councilmembers Chris Monzel and Chris Bortz, asking the City Solicitor to look into any possible recourse that the City has should owner Stern-Hendy Properties, Inc.default on the terms of a sales and operations contract, and what is the likelihood of the U.S. Department of Housing and Urban Development (HUD) closing the apartments for good.
Fay Apartments is an 893-unit complex of affordable rental units located off of Baltimore Avenue (BIRD'S EYE), just south of I-74 and west of the community of South Cumminsville that includes:
* 650 units of project-based Section 8 rentals
* 128 units under a Moderate Rehabilitation contract through the Cincinnati Metropolitan Housing Authority
* 112 market-rate units
In 1982, the City of Cincinnati acquired the property from HUD and sold it to Stern-Hendy for $1 per unit in 1986.
Since that time, the City has provided nearly $1.2 million in loans to rehabilitate and upgrade the units.
With interest, the balance of that loan now stands at $4.2 million.
In late 2005, Stern-Hendy had proposed to sell the development to the National Housing Trust, a not-for-profit organization whose goal is to preserve the nation's affordable housing stock.
The National Housing Trust requested a $7 million gap financing loan to assist with its $65 million acquisition and redevelopment cost, which included the $35 million renovation of the Fay Apartments and the assumption of some of Stern-Hendy's debt.
Following the sale to the National Housing Trust, the market-rate units would have been eliminated and the Moderate Rehabilitation contract would have been replaced with a project-based Housing Assistance Program contract.
The National Housing Trust had planned to re-create the complex as a series of smaller "urban villages", with new kitchens, bathrooms, and air conditioning to be installed in all of the units.
Stern-Hendy would continue to maintain the buildings and grounds.
Despite a reconfigured, two-phased housing plan that would have lowered the initial cost to only $20 million, the National Housing Trust couldn't make the numbers work.
On March 6, Stern-Hendy alerted the City that the National Housing Trust had dropped out of the project entirely.
Trouble in the mortgage market is blamed for killing the deal.
As a result of the financial shakeup, large banks, as well as the federally-backed lenders Fannie Mae and Freddie Mac, stopped buying low-income housing tax credits, making most affordable housing redevelopment projects impossible.
Although Stern-Hendy promised the City an updated proposal for the complex, there has been no contact between the two parties since.
Spokespersons for Stern-Hendy have said on several occasions that without renovations, they would have to shut their operations down.
"Now this same developer is seeking more - $10,000 a unit," Berding wrote in a statement accompanying his motion. "It's difficult to determine the proper course of action when the only other option that has been presented by the owner is to close down the complex, leaving hundreds of tenants without a home."
The original sale agreement between the City and Stern-Hendy states that the Fay Apartments must be operated as low- to moderate-income housing, under HUD regulations, until the year 2018.
The agreement also says that Stern-Hendy must maintain a minimum number of units on the site, and cannot demolish any units below that minimum without City permission.
If the complex does close, it will likely be by Stern-Hendy's choice.
The property has remained in compliance with HUD regulations and quality standards and is up to City code.
If Stern-Hendy opts to close the Fay Apartments, the City would declare all outstanding notes due and payable and would begin the process of relocating tenants.
"The City Solicitor should be prepared to exercise the City's legal rights to hold the owner accountable to the original agreement while the administration determines the necessary orders needed for improvements in the quality of life for tenants," Berding wrote.
Wednesday, April 30, 2008
Future of Fay Apartments in doubt
Subscribe to:
Post Comments
(Atom)
Recent Comments
7 comments:
Thanks for all that info Kevin.
Nothing but bad news here. Closing Fay Apartments will hammer the western neighborhoods. It's a place that never should have been. Residents without cars are severely isolated. Shopping is difficult. The complex is 100% poor and very dangerous. The houses would be comfortable someplace else, but as they sit, they are terrible places for children.
Instead of "hammering the western neighborhoods", the city should distribute the Section 8 tenants fairly across ALL of Cincinnati -- including Hyde Park, Kenwood, and OTR. The west side of town has carried an unfair share of that burden -- yes, I said burden -- for far too long. It's time for the rest of the city to share in the care and well-being of these individuals rather than just preach about how important such housing is.
When all you streetcar supporters tell me that the line will run up Harrison or Queen City Avenues and provide vouchers for low-income riders then I might begin to believe you care about something other than the property values in your own neighborhood.
Anonymous, you are completely correct. The West Side can not continue to be the dumping ground for all Section 8 tenants.
I grew up down the street from Fay. The place was rough even back in the late 70's. Today, I cannot even imagine.
Now I live in Northside, and we, along with other neighborhoods on the West side will pay dearly if Fay closes.
Thats right, send them to Hyde Park. Real smart... Sorry buddy but Hyde Park, Mt. Lookout and several of the Eastern neighborhoods are high income and pay high taxes. Chasing the money out of the would be the dumbest thing I ever heard. You seem to think that people on the east side don't have a choice, but when you start pushing the Section 8 residents on the wealthy or upper income homeowners, they don't have to hang around, especially when there is cheaper land to the north. Be careful what you wish for.
Why should the poor only be a burden on the inner core? Send them up to Liberty Township instead of spreading the problems throughout the city.
"They" are absolutely Right! The wealthy can move where they please. The wealthy didn't have to stay in Walnut Hills or Avondale and they didn't. These places at one time were no different than Hyde Park is today if not better so decline could happen in Hyde Park etc. too. Look what that one big complex is doing to little Finneytown. You can thank that spiteful jerk Brisben(?) for cramming that one down everybody's throat. All for HIS glorious dollar. Strict education, better parenting and hope for the future in a society of "we" rather than "me" might be a good place to start. Hmmm...it's easier to move.
Post a Comment