Accusations fly between city and owner of troubled apartments

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The Housing Authority of Winston-Salem is seeking a $1.6 million loan to buy New Hope Manor. (file photo)

Winston-Salem City Council members are discussing options for a low-income apartment complex, which could include assisting in the acquisition of the property and temporarily rehabbing some units, or relocating residents. Meanwhile, one of the owners denies an accusation of criminality as negotiations for the sale continue.

The city of Winston-Salem is faced with potentially spending upwards of $1 million to address alleged substandard housing conditions in a private housing complex reportedly plagued by lack of heat, sewage backups and nonfunctioning locks.

Parts of New Hope Manor Apartments, dubbed by some residents as “No Hope Manor,” have been overtaken by squatters and about 100 people converge on the complex after dark to drink beer and listen to loud music, Housing Authority CEO Larry Woods told a panel of Winston-Salem City Council on Monday. The housing authority is seeking a $1.6 million loan to help acquire the property, which adjoins the Cleveland Avenue Homes public housing community, as part of a plan to revitalize the area.

The housing authority ultimately plans to tear down the buildings as part of the neighborhood makeover, but until the agency is able to secure financing to redevelop the property, Woods suggested to city leaders that they should invest about $13,000 per unit to rehab 60 to 80 units.

“A lot of families, they don’t have heat,” Woods told council members on the finance committee. “Their plumbing is backing up. Their air conditioning’s not working. Their doors don’t lock properly. Our short-term solution does bring some certainty that they will be living in some kind of safe, decent, affordable housing in a safer manner and a better manner.”

Council members Derwin Montgomery and Molly Leight questioned whether it would make more sense to relocate the residents rather than invest in improvements to facilities that the housing authority ultimately plans to tear down. That prompted a discussion about the cost of relocation and whether the city might take legal action to hold the owners accountable, which could potentially result in the city seizing the property.

“I really hate to throw three-quarters of a million dollars into a project that then is going to be torn down,” Leight said. “To my mind, the absolute best situation would be to find some emergency relocation money and get folks out of there, and then tear the place down, and so there won’t be a place for the people who hang out there…. It is a hazard to live there.”

Later, Leight asked City Attorney Angela Carmon: “Is there no legal recourse against, to my mind, criminal owners?”

Carmon responded that the city could file an order of abatement and ask a court to force the owners to make repairs. If the owners did not make the repairs, Carmon said, a court would typically authorize the city to make repairs and charge the owner. Considering that the ownership entity is organized as a limited liability corporation, Carmon said the owners could walk away from the property and the city could initiate action to seize the property through a tax lien.

Bob Crumley, one of the owners, denied that any aspect of the management of the property constitutes criminal activity.

“What I take great umbrage at is when a city council says that my activity is criminal; that is beyond the pale,” said Crumley, a prominent lawyer who owns a law practice in Asheboro with offices in Greensboro and Charlotte. Crumley owns New Hope Manor Apartments with Nathan Tabor, a former chairman of the Forsyth County Republican Party. Tabor said he has not been involved in the day-to-day management of the property in almost two years.

Crumley also denied some of the characterizations made by Woods to describe the condition of the units. Taking a break from a family vacation to Disney World on Monday evening, he said he confirmed with his property manager by phone that all of the occupied units have working heat.

“Are the buildings housing code compliant? The answer is yes,” Crumley said. “If there’s a violation, we fix it. We have had issues with plumbing, and we fix it.”

Crumley blamed many of the past violations on tenants.

“When you have people who are flushing large amounts of tampons and other female products down the commode, that creates plumbing backups,” he said. “My company has spent a lot of money going through and fixing those kinds of issues. We have had tenants who intentionally poured things into the drains to stop up the drains in an attempt, so they think, to not have to pay rent.”

Woods said if the city decides against making the $1.6 million loan to enable the real estate deal, the housing authority “would have to walk away.” With the housing authority out of the picture, Brooks suggested the city would still face a liability.

“We would probably end up inspecting those units and initiating emergency relocation for the majority if not all of the tenants, and the city would bear the cost of that,” he said. He also said that many of the vacant units where the city might place the residents have outstanding violations. Any available units that are up to code would likely rent for considerably more than the $450-$470 per month residents are accustomed to paying, and the city would be obligated to make up the difference.

Councilman Robert Clark, who chairs the finance committee, estimated that the city could spend up to $1 million on relocating residents from New Hope Manor. After the meeting, Kevin Cheshire, vice president for development and general counsel for the housing authority, noted that if the city were to move the residents out, the owners would be free to lease the units out to new tenants.

The finance committee took no action on the matter Monday, but Clark asked staff to put together a proposal to bring back next month. The city recently received an appraisal of $1.9 million for the apartments, but Clark said he believes the property is overvalued.

“My vote will be contingent on a lower purchase price from the bank,” he said. “I think we’re paying way too much. I want it $1.7 [million] or lower if you want my support. Everybody needs to take a haircut on this.”

Crumley accused city council members of trying to “make a political football” out of New Hope Manor.

“The election was last week, and the time for politics is over,” he said. “If the city doesn’t want this apartment complex, then that’s fine. The city’s own staff asked for an appraisal. Now I understand there’s a council member who doesn’t trust that appraisal. For us, as business people, it’s a moving target.”