With its deteriorating doors and windows, constant battles with loiterers, and a distant owner apparently no longer interested in the property, the future for Cherrywood townhouse development near downtown Toledo looked grim a few months ago.
Today, the 176-unit subsidized housing project at 806 Cherry St. is about to be transferred to a new owner, who is committed to spending $2.7 million on renovations. The project will even have a new name: Greenbelt Place, after the Greenbelt Parkway two blocks away.
Toledo city council last week approved issuing up to $4.5 million in revenue bonds to finance the deal after first holding a public hearing to make sure the city won't be obligated if the deal collapses.
David Eddy, executive director of NorthRiver Development Corp., doesn't expect any problems. “If we do our job right, there's going to be 100 percent occupancy and a waiting list,” he said.
Mr. Eddy uses the word “tired” to describe the complex. It's an apt description. In the morning light, two women use lawn rakes to tidy up the parking area outside their units, raking up bottles and trash. There are broken downspouts and missing doorknobs. Sparse blades of grass poke through hard bare earth.
Forty-nine of the 176 units are vacant.
Built in 1971, the complex is near the end of a contract with the U.S. Department of Housing and Urban Development. Under the contract, renters pay 30 percent of their income. HUD pays the other 70 percent.
Residents said Friday they're looking forward to a reborn Cherrywood.
“Once the renovation starts and gets done, it's going to be beautiful here,” said Kontrea Burks, president of the tenants' group Parents United for a Fresh Start. “A lot of the residents have negative attitudes because so long we have been made empty promises.”
The new owners will spend about $2.7 million on renovation at the site. HUD will forgive a $1.7 million mortgage pending against the property, Mr. Eddy said.
Mr. Eddy said the renovations will include replacing appliances, doors, and windows. The community will get a new laundry room, and two playgrounds for children. Perhaps most significant of all, it will include a six-foot high wrought iron fence that will restrict entry to residents only.
Paramount Co. of Granville, Ohio, is a limited partner, Mr. Eddy said. He said the active management will be shared equally by NorthRiver and Hamstead Partners of La Jolla, Calif.
Mr. Eddy said the owners, Home Properties, Inc., of Rochester, N.Y., would likely not have been able to extend their contract with HUD because of the condition of the property.
He said he feared that without HUD subsidies, the project would quickly lose profitability and would be foreclosed on by HUD.
“It was a real possibility that at some point down the road, it would have been bulldozed or boarded up,” Mr. Eddy said.
That would have put a huge dent in the affordable housing market in Toledo. Each unit is a townhouse with three or four bedrooms. Once fully occupied, it could be home to as many as 600 people, of whom a majority would be children.
Everything changed last December when Chris Foster, president of Hamstead Partners, called Mr. Eddy while visiting Toledo. Mr. Foster said he had been approached by Home Properties, Inc., about buying the property and renewing the contract with HUD.
“We are signing up for a 50-year commitment, so it will remain affordable effective for the remaining years of its life,” Mr. Foster said. “We're very excited about the property and what's going to come of it.”
Last week, council voted to approve issuing up to $4.5 million in revenue bonds to buy the structure from the current owner and pay for extensive repairs and renovations.
Mr. Eddy said the project faced scrutiny from city council, which wanted to make sure the city can't be held financially responsible as it was with Beacon Place, just north of Cherrywood. A deal to convert the 201 units of subsidized housing into privately owned condominiums failed recently, costing the city $230,000, and potentially up to $2 million.
City Council President Peter Ujvagi said he ordered an on-the-record hearing with Mr. Eddy and his attorney to get ironclad assurances that if the project fails, the city won't be held liable. According to Mr. Eddy, the city has no financial obligation, even though the city will serve as the pass-through for tax-exempt bonds.
Mr. Eddy said the new general partners will hire a management firm whose job will include collecting rent on a regular basis. He said many of the units are unoccupied and some of the units are occupied by people who have stopped paying rent.
Gloria Harris, secretary of the tenants group, said occupants should expect to live up to the rental obligations.
“If you want to stay in a place and you know it's growing, you're going to find a way to make up the rent,” Mrs. Harris said.
She hopes for better years: Two years ago, she broke up a gang fight brewing in front of her unit.
“They had guns and stuff. There were too many adults, and they don't pay any attention to the kids,” Mrs. Harris said.