The struggle, says Denice Irwin, began soon after rain poured through her windows and ceiling, drenching the living room in her Uptown apartment. Within a few months, Irwin, a mother of three, had helped organize a tenants’ group in the 22-story federally subsidized building at 920 W. Lakeside Place. And now, after three years of court cases, protest, and threats of eviction, they stand on the verge of a major victory: a $12.5 million deal (the money to be raised over ten years) that would retire past debt on the building, rehab it, and leave it under tenant management.
“We want to move to a foreclosure sale, so that we can return this property to the private sector,” said HUD attorney John Mahoney in a recent court hearing. “As we have said on several occasions, the property will be sold with a requirement that repairs be made to bring the property into compliance with all state codes and to meet housing quality standards.”
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HUD officials hope that a foreclosure and advertised auction will bring a higher price for the property than AFC has offered to pay. On the other hand, if there are no bidders at the auction–which is highly likely–HUD is stuck with a nearly $6 million debt, and the building’s tenants are stuck with HUD as their landlord.
In June 1987, residents received notice that the building’s electricity, water, and gas would be shut off unless management paid over $100,000 in overdue utility bills. “We had to go to court,” says Irwin, “and ask the judge to appoint HUD the utility receivers of the building. The owners just weren’t paying their bills.”
Meanwhile, late in 1987, the residents joined forces with Voice of the People–an Uptown-based nonprofit community-development group–and began looking on their own for a developer interested in raising the cash needed to rehab the building. Within a few months of meeting Fusco, their deal was on.
To qualify for tax credits, a developer must not only actually provide low-income housing but also purchase the building from a local government entity or a nonprofit group. “The deal requires what the IRS calls a ‘bargain sale,’” says Fusco. “The original owners sell the project to the city, which then sells the building to us. Since the city is involved, we are allowed to finance the deal with tax credits.”
“Not telling Osterman earlier was an oversight on my part, and one I deeply regret. We were moving quickly on a lot of different fronts, and it got away from us. I assured her that we respect her concerns and will meet at her office and formally present our plans to groups from the area.”
