The Henderson City Council unanimously approved a resolution that will allow Henderson Mayor Pete O’Geary to sign a memorandum of understanding with the US Department of Housing and Urban Development (HUD) for the demolition of Beacon Light Apartments.
The city has been pursuing abatement of the Section 8 apartment complex since 2005, mainly due to issues with the waste system which resulted in raw sewage backing up into apartments as well as forming pools of sludge on the grounds of the complex itself. In 2006, HUD foreclosed on Beacon Light, partly due to the city’s request. The city assisted residents with relocation.
The property was formerly owned by the Beacon Light Masonic Lodge.
Beacon Light was subsequently purchased from HUD by Sharif Abdehalim for $54,000. Abdehalim also put approximately $1.5 million in a letter of credit on deposit with HUD to ensure that he rehabilitated the property and brought it up to code.
Although the property was purchased from HUD with a covenant restricting development to single-family dwellings for ownership, Abdehalim requested several times that he be allowed to erect apartments instead, claiming that there would be no market for owner-occupied dwellings or condominiums. Two Henderson City Councils refused to release the owner from the requirement, one in 2007 and the other in 2009.
Two fires in 2008 damaged significant portions of the property. Although the city council believes that Abdehalim collected insurance money from the fire, the amount is not known.
Whether or not Abdehalim collected insurance money is important because his sales contract with HUD states that he should use any insurance money collected towards rehabilitation the complex.
No work commenced on the property itself. Fencing was installed to prevent further vandalism.
In 2009, the city approved an ordinance calling for the demolition of Beacon Light. Although terms were offered to the owner to allow him to proceed with rehabilitation of the property and eventually have the order rescinded, the parties failed to resolve the issue.
Yesterday, Henderson City Manager Ray Griffin announced that HUD had determined that it would reimburse the city for reasonable costs of demolition. The money for the demolition will be taken from the funds posted by the owner at the time he purchased the property.
The cost of demolition was estimated a year ago to be $250,000.
HUD will approve bids before demolition takes place, so the city will know the exact amount of reimbursement in advance.
City Attorney John Zollicoffer described the arrangement as a “windfall” for the owner. Apparently, Abdehalim will retain ownership of the property after the demolition is complete. He also stated that the city would enforce restrictions against the owner “putting anything similar there”.
O’Geary praised US Sen. Richard Burr and US Rep. Bob Etheridge for helping the city resolve the matter.