Hillrise Trustees Letter of 3/23/10 to CMHA
March 23, 2010
Cincinnati Metropolitan Housing Authority
Board of Commissioners
16 West Central Parkway
Cincinnati, Ohio 45202
Dear CMHA Board of Commissioners:
We, the trustees of the Cincinnati Business and Professional Women’s Retirement Living, Inc., (CBPWRL) are greatly appreciative of the opportunity to present to you our response to the College Hill Forum’s letter dated March 22, 2010 regarding Project Based Vouchers for the Hillrise Apartment building.
We had hoped that the meeting conducted on 3/18/10 between the CBPWRL, CMHA, Forum and mediator would start a cooperative process between the CBPWRL board and the College Hill Forum but it appears that the Forum does not share in that hope. CBPWRLI’s Hillrise Apartment facility is a 501(c) (4). As such it is run by a volunteer board of commissioners not unlike hundreds of facilities across the country. It is apparent from the Forum’s letter that they do not believe that the CBPWRL board is capable of renovating and maintaining the facility and that the renovation plan that has been produced is viable. We respectfully disagree. CBPWRL has made significant changes with regards to management, maintenance and security in the past 6 months. We have assembled the most experienced group of affordable housing consultants available in the Tri-State area to prepare a workable refinancing plan.
The Forum continues to make statements like “long-standing deplorable conditions at the Hillrise” and “CBPW failed to maintain, repair or reinvest in Hillrise during the past 40 years”. We believe these statements are both inaccurate and unfounded. The board is aware and has been trying to deal with a decline in the conditions of the Hillrise and neighborhood over the past few years with limited funding. Specific actions (chemical treatment, resident education and work with the Health Department) have been taken to address bed bugs. Both the property manager and maintenance technician has been replaced in an effort to improve on-site services and communication. Security improvements (lighting, fence repairs, evictions, resident education/awareness efforts, door locks etc.) have been completed. An emphasis to improve communication between CBPWRL, Hillrise residents, site management, the local police department and the College Hill community continues to be a priority for the board.
A Physical Needs Assessment of the facility was completed in 2004. Multiple refinancing plans for renovation have been completed over the last 5 years. Potential funding sources via tax credits (both 4% and 9%), City Rental Rehab funding, Federal Home Loan bank (FHLB), conventional financing and grants have been examined. All financing plans have come to the same conclusion. The only way for the financing plans to work is with increased rental income to support the debt. The only way for the rents to increase and for the building to remain affordable is with project based subsidies.
The Hillrise financing plan that was submitted with the PBV application is one that we feel provides the best future for the building. The Forum has insinuated that they are aware of a “respected organization” that has expressed interest in purchasing the Hillrise and competing for 9% tax credits for the renovation. CBPWRL examined 9% LIHTC in early 2008 and determined that the risk, fees, competitive nature of the application process and time required for closing was not in the best interest of the Hillrise. Also, as you know the LIHTC industry as a whole has been nearly decimated by the current economic crisis. We believe that tax credits is not the best option for the Hillrise.
CBPWRL, believes it has assembled the best team of affordable housing consultants to assist us with the refinancing and renovation of the Hillrise. Wallick Hendy, a known entity that provides management and development expertise. Creative Housing Solutions, Inc. an architectural firm that specializes in affordable housing renovation and has completed 850+ Physical Needs Assessments and numerous development refinancing plans. Stephanie Sweeney, grant writing specialists that focuses on Federal Home Loan bank applications.
The Forum has stated that “the Task Force has consulted several individuals familiar with construction and commercial renovation and all agree that some critical expenses in the proposal were unrealistic”. CBPWRL does not believe that these opinions are based in fact. To our knowledge no one has conducted an on site inspection of the Hillrise on behalf of the Forum. In our opinion it is impossible to assess a building component or system without seeing it.
CBPWRL consultants specialize in affordable housing renovation. A hard-cost budget of $2,500,000 has been established by detailed cost estimates. The Hillrise has enormous economy of scale because of its shared systems and compact design. The current Hillrise FHLB proforma has an average unit hard cost of $28,853/unit and a total development cost (i.e. hard + soft costs) of $37,064/unit. In comparison the St. Paul proforma had an average unit hard cost of $32,980/unit and a total unit development cost of $72,446-$85,981/unit. The stark difference between the plans is within the nature of the financing. Because the Forum does not have experience with affordable housing refinancing packages they are unable to differentiate between the two.
The Forum lists 5 items of disagreement. We would like to address each one:
- Age Restriction of 55 and Over- CBPWRL understands that if the PBV are awarded and a contract is negotiated with CMHA, then CBPWRL and the Hillrise must comply with the requirements of the contract. It is understood that a part of this contract will be to restrict occupancy to persons that are disabled and/or 55 and older.
- Live-in Manager- the Forum believes that a live in manager will greatly reduce incidents of residents calling police. Wallick Hendy’s responded by saying that in their experience (35 years in this industry) resident managers tend to “burn out”. They recommend that a combination of a full time resident manager (working hours) and a resident “care-taker” (live in person) and floor captains is a much better solution. CBPWRL concurs with their recommendation.
- New management employees not previously employed by Metro Management. We believe this request is simple discrimination. The current on site manager has been employed with Wallick Hendy for several years and has an impeccable resume. CBPWRL, is not willing to loose her because she was once employed by Metro.
- Private security- We believe that improvements in building security, entry systems, cameras and age restrictions will greatly improve the security concerns at the Hillrise. Resident leadership reports a substantial improvement in the on-site security in the past 6 months. They expressed a continued concern of drug and prostitution in the neighborhood.
- Bed bug infestation- CBPWRL, management and resident leaders continue to work with residents of the Hillrise to alleviate this problem. The building under goes monthly chemical treatments. Resident leaders are working with management to try and better educate people. Unit trash is taken immediately off site by Wallick Hendy so that contaminated furniture etc. is not recycled into the building.
CBPWRL, continues to examine its own bylaws and standards to look for ways to improve upon its oversight of this facility. Having said that, we do acknowledge that there is a reliance on the property manager to provide a professional service. We are confident that the Wallick Hendy management company, a company that has been in the affordable housing industry for 35 years is and will continue to provide that service to us. We also, believe that having CMHA involved with the building will serve to strengthen the improved oversight we are trying to achieve.
In summary, I fear that if PBVs are not awarded and the renovation financing obtained, conditions will only further deteriorate and the wellbeing of the residents will be threatened.
Sincerely,
Hillrise Board Trustees
Sandra Lett, President
