A proposed ordinance to demolish what remains of Beacon Light Apartments was tabled by the Henderson City Council during their regular short meeting on Monday evening.
According to Henderson City Code Compliance Director Corey Williams, four of the fourteen buildings spread out on the nine acre lot are burned and the buildings are unsecured. He described the process of attempting to bring the property into compliance as containing “a lot of due diligence”.
Williams told council members that the ordinance request was to “add leverage” on the property.
Willie Darby, an Oxford attorney representing current owner Sharif Abdehalim, was permitted to speak to the council regarding the ordinance. Darby opening his remarks to members by stating that his client was seeking “cooperation and further patience”. He said that the federal Department of Housing and Urban Development (HUD) “still has its hand on this project” and that Abdehalim is not permitted to demolish the property under HUD rules without that agency’s prior written approval.
Darby told members that Abdehalim has posted a $1.2 million letter of credit with HUD, and that if the project is not completed, he will lose the money.
The Oxford attorney indicated that another party, Sugar Tree Enterprises, Inc., has filed a letter of intent to purchase the property, but that there is a 128 day “due diligence” period in which the agreement is to be finalized and put into writing.
Darby encouraged the council to consider the employment opportunities should the project move forward. Darby also argued that a demolition order would scare away potentials investors and/or buyers.
According to Abdehalim’s counselor, the owner has 24 months from the date of filing his letter of credit to complete the project. Those months expire on August 28, 2009. The owner may file for an extension of 24 months with HUD. The owner later told members that has already filed for the extension.
After Darby’s initial presentation, Abdehalim argued that the property should be offered for rent. Abdehalim made a request of the city council in 2007 shortly after acquiring the property that it permit the property to be offered as rental units. He made a similar request of the current council in October of 2008. The 2007 council rejected his request; however, the current city council said that it would consider the change.
No decision was ever made public on the issue.
Other than installing fencing and lights, Abdehalim has not begun a rehabilitation or building project or made any other alterations to the property since purchasing it from HUD.
Abdehalim argued that of all the cities where he has projects, only Henderson has failed to support him.
“Be patient, please, everything will be fine,” Abdehalim urged members.
Abdehalim also objected to local media referring to the complex as being like Beirut, and he indicated that such a label betrayed a “terrorist” insinuation.
Vance County Commissioner and real estate developer Terry Garrison was on hand to tell members that the Beacon Light property has been inspected by a structural engineer. He claimed that the buildings are structurally sound and do not warrant demolition.
Garrison’s interest in the project is unclear.
Member Garry Daeke countered Garrison by stating that when people lived in the complex, there was “sewage running everywhere”. He asked if it was possible for the sewers to be rehabilitated, as they run under concrete foundations.
Council member Mary Emma Evans echoed Daeke’s statement, recalling that sewage was coming up through second floor sinks and off of the roofs of buildings at Beacon Light.
“I don’t see how anyone could rebuild over the mess I saw,” Evans stated emphatically.
Darby argued that the sewer issue occurred prior to Abdehalim’s ownership. He stated that HUD feels that the rehabilitation of the property can be done.
During the exchange, Darby made reference to a 200 item list from HUD listing necessary repairs and their estimated costs as evidence of HUD’s belief in the project’s feasibility.
Abdehalim told members that he is at risk of losing his $1.2 million initial investment. He threatened to take “legal action” against HUD and the city. He went on to argue that the Beacon Light project is the only project in the United States that HUD approved for home ownership. He said that no one would spend $50,000 for an apartment, and continued to argue that he should be able to rent properties.
It was the expectation of the previous council that the buildings would be razed and single-family dwellings erected on the site. However, in a Section 8 renovation, at least one wall of the original structure must be incorporated into the rehabilitation for owners to receive tax credits.
“We don’t want rental property there. We made that very clear,” Henderson Mayor Pete O’Geary told Abdehalim.
“If no one buys, what are we going to do?” Abdehalim asked in reply.
“We are going to demolish it and offer the land for other uses,” Daeke answered.
At the behest of member Mike Inscoe, who said that there were some “very technical questions that need to be answered”, the council agreed to table the matter until its short regular session meeting on July 27, 2009.
One of those technical questions is whether or not Abdehalim’s $1.2 million investment can be allocated towards demolition costs.