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From the 11/28/05 Cincinnati Business Courier:
New owners to spruce up Fay complex
Dan Monk
Senior Staff Reporter
A Washington, D.C., nonprofit plans to invest $35 million to buy and renovate one of Cincinnati's largest low-income housing complexes in an attempt to upgrade units and reduce crime at the Fay Apartments.
The 893-unit West Side community would be renovated and downsized by more than 150 units under a memorandum of understanding signed recently between the National Housing Trust and Fay's current owner, downtown-based Stern-Hendy Properties Inc.
"The property is old and tired. It has to be renovated in the next couple of years or shut down," said David Hendy, Stern-Hendy's co-founder and president.
Fay's renovation would avert another seismic shift in the supply of affordable-housing units. Previous shifts, driven by bankruptcies and demolitions of large low-income communities in Over-the-Rhine, the West End and Bond Hill, triggered major demographic changes and complaints about crime and blight in West Side neighborhoods.
Stern-Hendy acquired Fay Apartments in 1985 from the city of Cincinnati, agreeing to invest $6 million in renovation as part of the purchase. It has run the complex on rental subsidies under the U.S. Department of Housing and Urban Development's project-based Section 8 program. Residents pay up to 30 percent of their monthly income, and HUD pays the rest. Rents run from $350 to $475 a month, but that could increase by about 40 percent if HUD approves Stern-Hendy's deal with the Housing Trust.
Hendy said the two-year renovation would be completed in phases. When finished, Stern-Hendy would continue to manage the 700 to 750 units. The number of larger, three-bedroom apartments would increase and all units would be equipped with air conditioning. Security improvements would include the incorporation of "defensible space" principles in the architectural design and service programs aimed at helping residents find jobs and improve their education.
"When we upgrade this property and it has more curb appeal, we would be able to attract and retain a better resident. That's our hope," Hendy said.
An official with the Housing Trust said the Fay transaction is one of nearly a dozen that his group is contemplating. He hopes to complete due diligence on the project and make a final decision on the deal by January.
"Our mission is to preserve affordable housing," said Scott Kline, vice president with Enterprise Preservation Corp., an affiliate of the National Housing Trust. "It's more likely to happen than not."
Fay Apartments would be the latest of several large, low-income housing properties to undergo dramatic changes in the last five years. The Cincinnati Metropolitan Housing Authority converted its largest projects, Lincoln Court and Laurel Homes in the West End, into mixed-income communities called City West. Rising vacancies in North Fairmount might lead CMHA to demolish much of its English Woods complex. The bankruptcy of Over-the-Rhine landlord Tom Denhart put dozens of low-income properties into the hands of market-rate developers. And the city of Cincinnati demolished the Huntington Meadows complex to make way for a new subdivision in Bond Hill.
At the same time, low-income residents have flocked to Price Hill, Westwood and Mount Airy, where plentiful lower-rent apartment properties have attracted low-income tenants, subsidized under HUD's Section 8 Housing Choice Voucher program.
Fay also has been the target of crime complaints. Police statistics show the community generated more than 2,200 calls in the first 10 months of 2005, with officers taking 175 reports of serious, or Part 1 crimes. The list includes two murders, five rapes and 79 burglaries. In April, after a trio of shootings at Fay, Westwood resident Christopher Kearney asked the city to pursue a nuisance complaint against Stern-Hendy.
"There is a disproportionate amount of violent crimes being committed in this relatively small geographic area," Kearney wrote to Melanie Reising, an assistant city prosecutor. "Can you please review the crimes, arrests, calls for service, EMS runs to Fay Apartments to form your own legal opinion of its status as a likely public nuisance?"
City spokeswoman Meg Olberding said Reising investigated Kearney's concerns but "didn't find actionable support" for a nuisance complaint. Stern-Hendy said it spends more than $100,000 a year hiring off-duty police officers to patrol Fay, and it screens tenants to avoid criminal trouble.
Nearly all of the crime at Fay, they say, is committed by people who come to the low-income community from other parts of the city.
Hendy has been trying to work out financing arrangements for a Fay renovation for several years. He invited the Housing Trust into the deal because new federal rules allow nonprofit owners to receive higher rent subsidies. He's trying to put together a financing package that includes $4 million in loans and grants from the city of Cincinnati, about $15 million from the sale of low-income housing tax credits and a roughly $16 million first mortgage.
As part of the deal, a syndicate of investors would buy the 80-acre complex from Stern-Hendy at a yet-to-be determined price. Hendy said he's seeking $4 million for the real estate, but that number could go lower if financing and construction costs rise. Kline said the investors likely would hire Stern-Hendy to continue managing the property.
"We think they do a good job," Kline said.
© 2005 American City Business Journals Inc.
http://cincinnati.bizjournals.com/cincinnati/stories/2005/11/28/story3.html
New owners to spruce up Fay complex
Dan Monk
Senior Staff Reporter
A Washington, D.C., nonprofit plans to invest $35 million to buy and renovate one of Cincinnati's largest low-income housing complexes in an attempt to upgrade units and reduce crime at the Fay Apartments.
The 893-unit West Side community would be renovated and downsized by more than 150 units under a memorandum of understanding signed recently between the National Housing Trust and Fay's current owner, downtown-based Stern-Hendy Properties Inc.
"The property is old and tired. It has to be renovated in the next couple of years or shut down," said David Hendy, Stern-Hendy's co-founder and president.
Fay's renovation would avert another seismic shift in the supply of affordable-housing units. Previous shifts, driven by bankruptcies and demolitions of large low-income communities in Over-the-Rhine, the West End and Bond Hill, triggered major demographic changes and complaints about crime and blight in West Side neighborhoods.
Stern-Hendy acquired Fay Apartments in 1985 from the city of Cincinnati, agreeing to invest $6 million in renovation as part of the purchase. It has run the complex on rental subsidies under the U.S. Department of Housing and Urban Development's project-based Section 8 program. Residents pay up to 30 percent of their monthly income, and HUD pays the rest. Rents run from $350 to $475 a month, but that could increase by about 40 percent if HUD approves Stern-Hendy's deal with the Housing Trust.
Hendy said the two-year renovation would be completed in phases. When finished, Stern-Hendy would continue to manage the 700 to 750 units. The number of larger, three-bedroom apartments would increase and all units would be equipped with air conditioning. Security improvements would include the incorporation of "defensible space" principles in the architectural design and service programs aimed at helping residents find jobs and improve their education.
"When we upgrade this property and it has more curb appeal, we would be able to attract and retain a better resident. That's our hope," Hendy said.
An official with the Housing Trust said the Fay transaction is one of nearly a dozen that his group is contemplating. He hopes to complete due diligence on the project and make a final decision on the deal by January.
"Our mission is to preserve affordable housing," said Scott Kline, vice president with Enterprise Preservation Corp., an affiliate of the National Housing Trust. "It's more likely to happen than not."
Fay Apartments would be the latest of several large, low-income housing properties to undergo dramatic changes in the last five years. The Cincinnati Metropolitan Housing Authority converted its largest projects, Lincoln Court and Laurel Homes in the West End, into mixed-income communities called City West. Rising vacancies in North Fairmount might lead CMHA to demolish much of its English Woods complex. The bankruptcy of Over-the-Rhine landlord Tom Denhart put dozens of low-income properties into the hands of market-rate developers. And the city of Cincinnati demolished the Huntington Meadows complex to make way for a new subdivision in Bond Hill.
At the same time, low-income residents have flocked to Price Hill, Westwood and Mount Airy, where plentiful lower-rent apartment properties have attracted low-income tenants, subsidized under HUD's Section 8 Housing Choice Voucher program.
Fay also has been the target of crime complaints. Police statistics show the community generated more than 2,200 calls in the first 10 months of 2005, with officers taking 175 reports of serious, or Part 1 crimes. The list includes two murders, five rapes and 79 burglaries. In April, after a trio of shootings at Fay, Westwood resident Christopher Kearney asked the city to pursue a nuisance complaint against Stern-Hendy.
"There is a disproportionate amount of violent crimes being committed in this relatively small geographic area," Kearney wrote to Melanie Reising, an assistant city prosecutor. "Can you please review the crimes, arrests, calls for service, EMS runs to Fay Apartments to form your own legal opinion of its status as a likely public nuisance?"
City spokeswoman Meg Olberding said Reising investigated Kearney's concerns but "didn't find actionable support" for a nuisance complaint. Stern-Hendy said it spends more than $100,000 a year hiring off-duty police officers to patrol Fay, and it screens tenants to avoid criminal trouble.
Nearly all of the crime at Fay, they say, is committed by people who come to the low-income community from other parts of the city.
Hendy has been trying to work out financing arrangements for a Fay renovation for several years. He invited the Housing Trust into the deal because new federal rules allow nonprofit owners to receive higher rent subsidies. He's trying to put together a financing package that includes $4 million in loans and grants from the city of Cincinnati, about $15 million from the sale of low-income housing tax credits and a roughly $16 million first mortgage.
As part of the deal, a syndicate of investors would buy the 80-acre complex from Stern-Hendy at a yet-to-be determined price. Hendy said he's seeking $4 million for the real estate, but that number could go lower if financing and construction costs rise. Kline said the investors likely would hire Stern-Hendy to continue managing the property.
"We think they do a good job," Kline said.
© 2005 American City Business Journals Inc.
http://cincinnati.bizjournals.com/cincinnati/stories/2005/11/28/story3.html