The rehabilitation of the Beacon Light Apartments is in jeopardy, and City Manager Eric Williams estimated Friday that it’s a 50-50 proposition whether the U.S. Department of Housing and Urban Development will let the project move forward.
Based on HUD discussions of the past month, as reflected in e-mail exchanges, a 50-50 chance represents an improvement for the development of HUD-subsidized housing off Boddie Street.
Much of the uncertainty could be settled this week as HUD officials review a final project application from the Beacon Light Masonic Lodge, which owns the 32-year-old complex. City Manager Eric Williams plans to hold a conference call today involving the complex’s management firm, McClain Barr & Associates, and the Greensboro-based HUD official who oversees all such subsidized multifamily housing in the Carolinas, Dan McCanless.
The City Council is due to hear an update on the Beacon Light situation during tonight’s council meeting.
The housing complex is privately owned and managed, and the 108 families living there receive aid from HUD to afford their rent.
The Henderson government has no official role in the complex but has an interest in how those city residents are living and in how much of a demand Beacon Light makes on city services. The apartment complex has gained a reputation as a high-risk area for crime, and it has seen repeated sewage leaks and other utility problems over the years.
City officials warmly received a report from the chairman of the Beacon Light lodge, William Rogers, in March that a HUD loan of more than $3 million to rehabilitate the housing complex was basically a done deal.
The overhaul has been planned for at least two years, and Rogers said in late March that the lodge was on track to submit its financial package for final HUD review by the April 1 deadline. He did not offer many details on the Beacon Light rehabilitation, but he said the Greensboro office of HUD made its support for the project clear.
“Keep us in touch and let us know … if you have specific issues with certain city services,” Mayor Clem Seifert said at the time.
In the last week of April, Beacon Light turned to the city government for help.
On April 27, the city’s Community Development Block Grant specialist, Gwen Wright, wrote a memo warning that HUD was threatening to end its support for the Beacon Light Apartments and forcing the complex to be put up for sale.
Clinton Gravely, the architect on the Beacon Light project, asked the city to intervene with HUD to save the housing complex, and Williams responded with a letter to McCanless on April 29.
“We understand the unfortunate record of declining conditions on the project site, the 108 families affected who reside there, the reduction in potential loan funds for rehabilitation from approximate 3.5 million to 2.6 million and, especially, reviews under way from both your office and Washington to potentially pull the subsidy, provide vouchers to the residents for relocation purposes and place the property on the market for acquisition,” Williams wrote.
“My purpose in writing, based on our understanding of the host of variables, is to strongly endorse favorable reviews on the application … and to encourage the renovation funds to either be approved and plans to be implemented to vastly improve that complex.”
In addition to sending the letter, Williams and Seifert turned to lobbyist Kareem Murphy with The Ferguson Group in Washington for help reaching the right people in the nation’s capital. Murphy, Seifert, Williams and mayoral assistant Sandra Wilkerson had a conference call last Monday to discuss Beacon Light.
The main issue from HUD’s perspective is whether it’s worthwhile to put millions of dollars into a complex that has received awful inspection reports.
The loan amount was cut back from $3.5 million to $2.6 million because HUD didn’t think the complex was sufficient collateral for the larger amount. That reduction, Wright wrote, has forced Gravely to scale back the renovations.
The planned work includes the conversion of some units for handicapped accessibility, new stairs, new roofs, new windows, new exterior doors, new blinds, new appliances, bathroom renovations, plumbing repairs, new air conditioning, painting and street patching. The Beacon Light community center also would be repaired.
McCanless wrote April 20 that $2.6 million might not be enough to bring Beacon Light into compliance with housing standards; “however, they are continuing to negotiate with contractors (they are on their fifth contractor).”
Based on the latest HUD inspections, the complex desperately needs the overhaul.
Donzella Hamm, who heads HUD’s Departmental Enforcement Center in Atlanta, recommended that the Greensboro field office consider issuing a declaration of default and foreclosing on the Beacon Light complex (the Masonic lodge still owes money on the first mortgage for the site) because of the bad inspections.
Washington HUD official Ken Hannon reported in an e-mail message April 19 that he could not approve the Beacon Light plan because of a series of bad inspections. Of the past five inspections, three produced scores below 60 on a 100 scale. November’s score was 25, and March’s was 17.
“Wrong trending!” Hannon wrote. “This is a bad owner in every respect.”
In another e-mail message, Hannon said that a review committee in Washington would have to consider any proposal to keep Beacon Light open. “After a review of the administrative record,” he wrote, “we hold little hope for this one.”
If HUD pulls the plug on Beacon Light, the 108 families there will receive HUD vouchers and be offered the chance to move into other subsidized housing in Vance, Warren and Franklin counties.
The city’s involvement appears to have helped the situation, however. After talking to Williams, Wright, Gravely and Planning Director Grace Smith on April 29, McCanless wrote to Hannon: “The city officials affirmed that the current owners are a local, strong, dedicated, nonprofit organization who is committed to the success of this complex; however, lack of funds and a bad management company has gotten them into the current situation.”
Beacon Light changed management companies to McClain Barr about a year ago, and the new manager promptly had to repair a sewer problem that exposed a portion of the Beacon Light Apartments to raw sewage, McCanless wrote.
McCanless indicated that he would make a final recommendation soon after receiving a “firm commitment” application from the Masonic lodge last week, but his preliminary feeling was that “this property can and should be salvaged for the good of the residents and the City of Henderson.”