A judge will soon decide if a group of low-income tenants and Allegheny County officials can be part of an ongoing foreclosure case against the owner of a group of troubled properties — a decision that could impact a group of local affordable properties and the people who live there.
Should the judge allow the tenant group or the county to intervene in the litigation, “we can have a seat at the table,” Allegheny County Executive Sara Innamorato told a gymnasium full of tenants at a community meeting last month at the Kingsley Association in Larimer.
The case, before Allegheny County Common Pleas Judge Christine Ward, is a mortgage foreclosure case brought by an Indiana-based bank against the owners of Mon View Heights apartments, a troubled West-Mifflin affordable housing complex.
But attorneys for the county and the tenant group say more is at stake than just a bank’s assets — the property is home to hundreds of low-income families.
“The receivership…is for the benefit of the bank. And our concern is the individuals,” an attorney representing the county said in court last month.
The 326-unit property is one of a number of local affordable properties purchased by a New Jersey-based company, NB Affordable, about two years ago. The apartments are privately owned, but receive a federal subsidy to house low-income tenants.
Tenants have complained about numerous serious problems at the property, including pest infestations, mold, sewage, raccoons in housing units, and violence on site because of a lack of security.
After NB’s owners pleaded guilty to federal mortgage fraud charges last year, Merchants Bank of Indiana filed for foreclosure against the NB Affordable-related LLC that owns Mon View Heights, as well as Palisades Apartments in Rankin, Valley Royal Court Apartments in New Kensington, and Gallatin Apartments in Uniontown. (Mon View is also at the center of a separate, criminal case brought by Allegheny County District Attorney Stephen Zappala Jr.)
The bank asked the court to appoint a receiver to oversee the properties.
Trigild — a company appointed by the court — was put in place in December to be a receiver, overseeing a property manager and making sure the thousands of dollars in federal funds that are still coming in are being spent appropriately.
During a status conference in Common Pleas Court last month, representatives for the receiver said they’ve spent in excess of $600,000 at Mon View, removing garbage, repairing units, generally stabilizing the property and trying to bring it back to a liveable state. In court filings, the bank has argued there is no need for the county or the tenants to be part of the ongoing foreclosure case. Their concerns — maintaining safe, habitable, affordable housing — are already being addressed by the improvements the receiver is making, the bank argues.
The receiver has “corrected every issue [at the property] that we’re aware of,” their representative told a judge in court last month.
In court filings, the bank has also argued the county and tenants don’t have legal standing to intervene in the case.
But both the county and the tenant group have said the receiver’s duty is looking out for the financial interests of the lender — not the low-income residents who still live in Mon View apartments —- which is why they want the court to allow them to intervene and have a say in the case.
“The folks who live there, they have the highest stakes of any of us in this room as to how this case proceeds and as to how this receivership unfolds,” Kevin Quisenberry, an attorney with the nonprofit Community Justice Project representing the tenants, told Judge Ward at a status conference last month.
“We are concerned about a mass displacement [of residents],” Alisa Carr, an attorney for Allegheny County told Judge Ward at a status conference last month, arguing as to why the county should be a party to the case.
The county and tenant group have also said they want to be involved in the case to have a say as to what will happen to Mon View and Palisades in the future, and to ensure the properties remain affordable, when the properties will likely be sold to another buyer.
They’re also concerned that federal housing regulators at the U.S. Department of Housing and Urban Development might intervene, given the poor conditions at Mon View before the receiver stepped in. In the past, HUD regulators have cut off contracts at other troubled properties, meaning tenants have to find other housing quickly, in a market that already has a shortage of affordable housing units.
It’s unclear when the judge will rule in the case.
