Kansas City Blues: Owner Fights to Sustain Award-winning Properties
By Glenn Petherick
4 min read
It’s almost hard to believe.
In Kansas City, Mo., the owner of three award-winning affordable multifamily rental properties is fighting an attempt by local officials to possibly condemn the buildings and take them by eminent domain on the grounds that they have caused social blight to the community. This despite a lengthy letter of support for the properties and the operation of them from the U.S. Department of Housing and Urban Development (HUD).
The dispute centers around three federally subsidized properties – Georgian Court, Bainbridge Apartments, and Linda Vista Apartments – that Eagle Point Companies acquired in June 2006 and subsequently renovated in a transaction funded largely by federal and state low-income housing and historic tax credits. The Section 8-assisted developments, which contain 303 apartments occupied by more than 400 low-income residents, are managed by Eagle Point Management, LLC, which is based in South Portland, Me. along with the parent company.
An addendum to a “blight study” of the planning area in which the properties are located, prepared for the city Planned Industrial Expansion Authority (PIEA), recommends that the three properties be declared as blighted because of the purported presence of “social liabilities” at them. The recent addendum study and recommendation, approved by PIEA, has been forwarded to the city Plan Commission. The commission is to act on the matter and present its own recommendation to the city council. If city council approves a finding that the properties are blighted, it could take various remedial steps, such as condemning one or more of the buildings and taking them under eminent domain powers.
The study contends that social liabilities exist at the three properties because of a high incidence of crime, based upon analysis of crime data collected from local police for 2006-2012 that generated positive “z scores” for each of the developments.
The study’s sole reason for recommending a finding of blight was the alleged high rate of crime attributable to the developments, based upon the crime data analysis and interviews with police and neighborhood residents.
Study Findings Rejected
The study and its findings have been rejected both by the Kansas City office of HUD and by Eagle Point Companies. In a letter prepared for the city Plan Commission, HUD has said there is no evidence of physical blight at the three properties and that they have been well managed, as evidenced by solid REAC scores that are higher than those prior to Eagle Point purchasing the properties. The letter also cites proactive security procedures at the property to minimize crime. In addition, HUD’s letter expresses concern that any action by the city based on the blight study raises the potential for fair housing issues, given that about 95% of the properties’ residents are African American, unlike the immediate surrounding area. HUD’s letter recommends that the city work closely with Eagle Point to address any specific concerns related to crime to ensure that the current residents have continued access to affordable housing.
Eagle Point Companies CEO Laura Burns said the company and its security contractor have been aggressive in controlling and reducing crime at the properties by checking IDs of all visitors and alerting police to those with outstanding arrest warrants; by having police officers accompany management staff on routine housekeeping inspections of apartments; and by working in other cooperative ways with local police. She also noted that the study didn’t indicate whether the analyzed crime data reflected arrests and police calls solely attributable to the three properties or whether they also included arrests and police calls in the nearby vicinity.
The study shows that annual z-scores for each of the three properties declined after 2010.
Moreover, the study addendum only analyzed and recommended the Eagle Point properties for a finding of blight, even though noting a “predominance” of social liability exists within the entire planning area. According to the study, the 54-acre planning area contains 72 property parcels, and properties with a positive z-score in 2012 covered more than 59% of the planning area.
“There is absolutely no basis in reality for any finding of physical, social, or any other type of blight with regards to Eagle Point’s Kansas City properties and we will fight any such effort vigorously on behalf of both our company and our residents,” says Burns. “There is every basis for working together to continue improvements for our residents and the broader Kansas City community. We are ready and eager to work with the commission and the city if that is the direction they choose.”
Burns said that the company’s analysis of information it has received suggest that the objective of city officials is to have the properties converted to market-rate apartments.
