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The name Emmanuel Ku may not bring the Google searches like “Jessica Alba naked” or “how to make LSD in your basement using nothing more than bleach, ammonia, and Dexatrim caplets,” but people are interested. Nice folks like the City of Ypsilanti’s legal counsel of Barr, Anhut & Gilbreath, current development darlings JC Beal Construction, and the kind people of the U.S. Department of Housing and Urban Development. In an effort to keep them entertained and coming back for more, I offer them more of my usual nonsense.
As we all know, the Parkview Apartments were auctioned off back on May 27th because the City and the Ypsilanti Housing Commission could not find common ground before a HUD imposed deadline of May 20th. The winning bidder was the aforementioned Mr. Ku. What people may not know is how HUD auctions work and how they screen potential buyers. As with most Federal Government programs, it’s sketchy.
During the late 60s, 70s, and early 80s, there was a federally subsidized housing boom. Developers received these subsidies in exchange for making the housing “affordable” for 20 years. The developers promise to maintain the buildings but when they don’t, HUD swoops in and takes control without regard to the contract. At this time, the subsidy ends and the residents are given individual Section 8 vouchers.
During President Bush’s 2005 State of the Union address, he said he wanted to cut what he thought were duplicate or ineffective programs and trim $3.7B from HUD’s budget. Part of trimming that budget is selling off properties such as the Parkview Apartments. That is itself is not irresponsiblity on the part of HUD. The egregious part is the screening process they use to allow potential bidders to become owners.
In order to bid on the Parkview Apartments, a potential bidder had to put up $75K. In addition to this show of good faith, HUD screens buyers for previous violations. This is where things get bizarre. HUD doesn’t care about maintenence records or tenant complaints. HUD only cares if the potential buyer has broken HUD rules in the past. As previously mentioned, Mr. Ku purchased the Pueblo de MayagÃ¼ez complex in the Bronx even though he was being sued by the New York City, had been fined almost 20 times by NYC, and operated several sites that totalled more than 2000 outstanding code violations. In the year since he purchased Pueblo de MayagÃ¼ez, tenants claim that things have gotten worse. Windows are broken, in inclimate weather the roof leaks and windows fly loose from their sashes, and the lack of security has made the complex a safe haven for drug dealers.
When it came time to accept bidders for the Parkview Apartments’ sale, HUD didn’t care about all of that. HUD only cared that Mr. Ku hadn’t violated any of its rules like using lead paint during the rehabilitation process. That screening process does not look out for residents of complexes like Pueblo de MayagÃ¼ez and Parkview. It’s a wink and nod process designed to give the impression that HUD is acting in everyone’s best interests.
Now, if I were running things in Ypsilanti or the YHC, I’d file a lawsuit to reverse the sale. It would be a long-shot for sure and the City is not in the greatest places financially, but HUD needs to reform the process they use to sell foreclosed properties. The only way to influence this is to create more bad publicity.
It should also be mentioned here that the sale of the Parkview Apartments does not necessarily guarantee that it will get back on the tax rolls. Mr. Ku could transfer the ownership to a non-profit board in order to avoid paying property taxes. That board could then, in turn, contract operational responsibility to Mr. Ku and pay him outrageous management fees to run the place. That is purely speculation, but it’s reasonable enough to print.
Finally, in an effort to use bad publicity as a way of making positive change, it should be noted that McKinley Properties offered to take over management of Parkview Apartments provided they could run all of Ypsilanti’s public housing, but was rejected by the City. That’s one of those proposals you have to take with a grain of salt. McKinley has a solid reputation, such as their work with affordable housing in Taylor, Michigan but they have been on the wrong end of lawsuits such as their refusal to pay for a wheelchair ramp (they lost) and the removal of a tenant’s window sign (they lost). One could debate whether they would have been better than the City’s proposal to sell the property to the Finch Group, but at least McKinley Properties is local.
The following were used as sources for this article:
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