Finances under scrutiny as Eureka Gardens owner hires broker
Global Ministries Foundation bonds monitored by federal investigators
JACKSONVILLE, Fla. – The owner of the troubled Eureka Gardens and Washington Heights apartment complexes has taken another step toward selling his Jacksonville properties.
A spokesperson confirmed Thursday to the I-TEAM that Global Ministries Foundation has hired a real estate broker to evaluate the properties and estimate their market value.
Those properties include Eureka Gardens, Washington Heights, Springfield Residential One, Southside Apartments, Market Street Apartments and Moncrief Village.
Residents said the U.S. Department of Housing and Urban Development will be back at Eureka Gardens this week for yet another inspection.
“While we continue to work productively with HUD and community leaders, we are considering all options and remain focused on restoration of Eureka Gardens and our other Jacksonville properties,” GMF founder the Rev. Richard Hamlet said in a statement about the hiring of the broker.
HUD is also conducting what it calls a management review of the property. Officials said that during that evaluation process, they could also order an air quality control report for Washington Heights, which would require experts to come in and test for mold.
Meanwhile, the fire marshal is working with Councilman Tommy Hazouri to install carbon monoxide detectors at Washington Heights after they discovered pilot lights were too high last week and could cause a dangerous carbon monoxide leak.
GMF bonds under federal watch
These latest developments come as the I-TEAM continues to follow the money, including millions of taxpayer dollars, in an ongoing eight-month investigation into GMF and conditions at Eureka Gardens and Washington Heights.
Sources told News4Jax that Global Ministries' financial structure is under the watchful eye of federal investigators, including three federal agencies that are looking into how GMF spends the tens of millions of federal dollars that it receives every year to run its housing complexes.
Jacksonville Mayor Lenny Curry said the city is also paying attention to the company's finances.
Meanwhile, families at Eureka Gardens and Washington Heights told the I-TEAM and federal authorities that despite eight months of public pressure, they're still living in filth.
“We're suffering,” said Dwan Wilson, who lives in Eureka Gardens.
Wilson's living conditions brought a city councilman's assistant to tears during a code enforcement raid last October.
The federally subsidized Jacksonville homes were bought by Hamlet’s Global Ministries Foundation in 2012 in a bond deal exposed by the I-TEAM as bypassing all city protocol under then Mayor Alvin Brown.
Curry and City Councilman Garrett Dennis, who represents Eureka Gardens, addressed that skirted process directly with the secretary of HUD in Washington, D.C., and learned that it is already on HUD's radar, too.
“Part of the issues is that when this owner took control of these properties, these assets, the underwriting process wasn't solid, wasn't sound,” Curry said. “Simply put to your viewers, it would be like someone trying to buy a home and their income was not properly vetted as to whether or not they can afford the home, but also afford the insurance and afford the maintenance. This is playing with people's lives.”
GMF's housing bonds for its Tennessee properties are under the national microscope and are even being followed by Bloomberg News.
When HUD voided housing contracts for two GMF-owned complexes in Memphis, the company lost millions in taxpayer subsidies, and the bonds tanked to a Triple C rating, with their value dropping to just 21 cents on the dollar.
An expert explained to the I-TEAM what that means.
“Triple C is basically junk-bond status,” Mark Hendrickson said. “I think his business model was trouble from the start.”
Hendrickson is a state expert who works with the Jacksonville Housing Finance Authority, which advised against Hamlet's company coming to Jacksonville. That warning was ignored.
Hendrickson said HUD scrutiny of housing complexes could lead to financial trouble for owners.
“Basically, part of the revenue stream bond counted on was federal subsidies, and when (that is) removed, there is not enough to pay the bonds,” Hendrickson said. “Knowing what I know as someone into this, I would have never bought those bonds. It's hard to mismanage a property (to the point) where your contract gets pulled.”
The I-TEAM found a letter that Hamlet sent to a major New York bank addressing that issue.
We also went through new financial paperwork filed by Global Ministries Foundation and found that $7.1 million was transferred from Hamlet's affordable housing company to his charity in 2014.
On the tax filing, the purpose listed for the transfer of the federal taxpayer dollars was “ministries.”
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