As background, Parkview is a 144-unit, HUD-subsidized apartment complex on the south side of Ypsilanti. There have been serious repair issues documented at the premises for many years. A 2004 inspection by the City of Ypsilanti documented 953 building code violations at Parkview; that inspection found only 7 of the 144 units in compliance with the code. In 2003, HUD became very directly involved in the project—in order to protect its asset, to protect the tenants, and to protect the community.

In 2004, HUD decided to foreclose on the property and to re-sell it to a local governmental unit. The property was initially scheduled for sale in November, 2004. At that time, HUD had selected the Ypsilanti Housing Commission as the local governmental entity to assume title to the project. However, the PVANPC sued to enjoin the sale. That suit was dismissed, but the sale was delayed.

On May 27, 2005, HUD auctioned Parkview Apartments at a public foreclosure sale.

The tenants were disappointed in how HUD handled that sale. Shortly before the sale and after a drawn out negotiation, the City of Ypsilanti (City) and the Ypsilanti Housing Commission (YHC) executed a Memorandum of Understanding approving the sale of Parkview to the YHC; the tenants understood that, under the City-YHC agreement, HUD would acquire the property and sell it to the YHC. Under the YHC proposal, the property would be managed by Chesapeake Properties (a well respected low income project manager). The YHC proposal provided for at least $3.5 million dollars in renovations and repairs to the property. But HUD said the City-YHC agreement was made too late and refused to postpone the sale. The property was then sold to the highest bidder—Emmanuel Ku a/k/a/ Dakko Properties (Mr. Ku).

Since the sale, the current Parkview ownership, PVANPC, has continued to fight HUD and to try to avoid losing control over the property—while continuing to neglect the property. On June 1, 2005, PVANPC filed a Chapter 11 petition in the U.S. Bankruptcy Court. The bankruptcy placed a stay on HUD’s sale to Mr. Ku.

After learning of HUD’s decision to sell to Mr. Ku, the tenants did some research on his record as a property manager. The tenants learned that Mr. Ku has a history of maintenance and code compliance problems with apartments that he owns or manages in New York City. These concerns were substantiated by an affidavit from a high ranking official in the NYC code enforcement department. From the tenants’ perspective, there was another problem with Mr. Ku’s bid— it provided for only $1 million for repairs and renovation of the property—about $2.5 million less than the YHC proposal. The tenants believe that this amount is wholly inadequate to address the hundreds of documented housing code violations at the property.

In June 2005, the PTA sent a letter to HUD requesting that HUD perform its due diligence as required by Section 219 of the Consolidated Appropriations Act 2004 by reviewing the bidder’s record for compliance with state and local housing laws before certifying the bidder as a qualified purchaser. The PTA urged HUD to cancel the sale to Mr. Ku. HUD refused to cancel the sale.

In October 2005, the PTA filed a Proof of Claim in Parkview’s bankruptcy case to protect the tenants’ security deposits and raising a claim for a retroactive rent abatement, as supported by the hundreds of code violations that have existed at Parkview for years.

In November, HUD got permission from the bankruptcy court (relief from the bankruptcy stay) to close the sale of Parkview to Mr. Ku.

HUD’s continuing refusal to cancel the sale to Mr. Ku forced the PTA to sue HUD in the Federal District Court. This suit was filed in December, 2005 and asked the Court to enjoin HUD from selling Parkview to Mr. Ku.

On February 14, 2006, HUD decided to cancel the sale of property to Mr. Ku. The decision by HUD grants the PTA the relief sought in their suit—so this pending case will be resolved.

A HUD official has told us that HUD intends to ask the bankruptcy court to allow it to become the Mortgagee in Possession (MIP) of the property. As MIP, HUD intends to begin making repairs and security improvements to the property.

Regrettably, the situation at Parkview is worse now than it was it was in the fall of 2004 when HUD first scheduled the property for sale—hundreds of code violations, virtually no security, no progress on repairs. And, since PVANPC has refused to pay its water bills, the tenants were all served with utility shut off notices just before Christmas. (YUCA subsequently agreed to hold off on these shut offs.)

We see the current time as an opportunity for the community. This is our collective chance to take joint action to improve Parkview. The PTA has asked for a meeting with HUD to discuss HUD’s future plans for the property. However, this is not a problem that HUD can solve on its own. The support and participation of state and local government is critical in planning and implementing a solution that addresses everyone’s goals.

At this time, the PTA needs your support and advocacy. Please contact HUD and urge it to engage in discussions with PTA and other community stakeholders. Urge HUD to immediately ask the bankruptcy court to give it MIP status. Assuming HUD becomes MIP, urge it to quickly begin the long neglected repairs to the property; to immediately improve the security situation there; and then to make a commitment to selling Parkview to the YHC or another qualified non-profit entity committed to preserving the property as decent and affordable housing for Ypsilanti’s very low income residents.

On behalf of the PTA, we appreciate your past concerns for the property and the tenants. We urge you to become involved again at this critical moment. The PTA hopes it can count on your continued support of its efforts to bring safe and decent affordable housing to the residents of Parkview. If you have any questions or concerns, please contact Jim Schaafsma [734-998-6100, ext. 21]; or Bob Gillett [734-665-6181]; or Min Kim [734-665-6181].

Note: The PTA continues to be represented by Legal Services of South Central Michigan—in addition, Gary Boren of Boren & Carey PC, and the University of Michigan Clinical Law Program (Paul Reingold), are assisting LSSCM on a pro bono basis.