A.G. Gancarski
Jacksonville Mayor Lenny Curry and senior staffers had another meeting this week with the potential buyer for some of the city’s most beleaguered HUD properties, and it went well, says the mayor’s office.
In September, Curry confirmed the interest of Millennia Housing Management of Cleveland, Ohio, —which has specialized in the low-income housing market for over two decades — in acquiring properties owned by Global Ministries Foundation.
Those properties had, especially in the last year, gotten national scrutiny for being in disrepair, with issues ranging from property-wide gas leaks to mold infestations and structural damage that compromised safety.
Curry’s office says the Thursday meeting was productive, and it seems the deal is moving toward completion.
Millennia, we are told via answers provided by Chief of Staff Kerri Stewart, is “finalizing purchase and sale agreement now with hopes to be in due diligence period soon.”
The due diligence period allows the potential buyer to do a final review of the portfolio of properties it is acquiring.
One issue with GMF’s ownership of properties such as Eureka Garden, Washington Heights, and Cleveland Arms was the insufficient capital committed to rehab; roughly $3,000 a unit, for rental apartments approaching half a century old.
Will Millennia commit to invest meaningfully in facility rehab?
Curry’s team is confident: “No commitments made, however, their track record speaks to the kind of rehab they perform.”
Indeed, Millennia has pledged significant resources to facility rehabilitation in the past, as a 2014 tax incentive application makes clear.
In acquiring a 160-unit Section 8 complex in upstate New York, the company pledged to spend $8.8 million on the “soft costs” of renovation. Pro-rated, this comes out to $55,000 a unit, as the company vowed to address a “multitude of capital needs” for the apartments, including kitchen and bathroom renovation and installing new windows.
There are still hurdles to overcome: in addition to the due diligence period, the deal, said Stewart, requires “approval of transaction by HUD (and any other stakeholder entities).”
Millennia, already in 22 states, should have no problem there.
The bet that Millennia has made over the years: that guaranteed federal money will defray, over time, the cost of rehab.
It’s a bet that the city of Jacksonville welcomes, after years of frustration with Global Ministries, and years before that with previous ownership teams.
