Eureka Gardens owner set to pull out of Jacksonville

Global Ministries Foundation puts Jacksonville properties, 5 others up for sale

JACKSONVILLE, Fla. – After eight months of I-TEAM reports exposing deplorable living conditions at Eureka Gardens and Washington Heights, both federally subsidized properties are on the market, along with Global Ministries Foundation's entire Jacksonville portfolio.

A real estate broker hired by GMF has listed 11 of the company's properties for sale. The Section 8 portfolio is being offered without an asking price, according to the Affordable Housing Advisors listing.

“This is progress. We still have a long way to go, but this is a really, really big step,” Jacksonville Mayor Lenny Curry said of the properties going up for sale.

Curry and City Council members Garrett Dennis and Tommy Hazouri have been fighting to push GMF and Hamlet out of Jacksonville. Curry publicly took up the cause last fall after walking Eureka Gardens firsthand to see unsanitary living conditions exposed by the I-TEAM, including mold, mildew, dangerous gas and carbon monoxide leaks and crumbling stairs.

Dennis, whose district includes Eureka Gardens, was there too, after tenants called their elected city leader for help.

“As a new council member, I've always believed in the system, but now being a part of it, I know it works,” Dennis said.

The listing posted for GMF said the 11 properties include 2,352 units located in Florida, Georgia and Tennessee.

The Jacksonville properties listed for sale are:

  • Eureka Gardens (400 units)
  • Market Street Apartments (17 units)
  • Moncrief Village Apartments (94 units)
  • Southside Apartments (74 units)
  • Springfield Residential One Apartments (51 units)
  • Washington Heights (200 units)

The five other properties listed are:

  • Forest Cove Apartments, Atlanta (396 units)
  • Goodwill Village Apartments, Memphis, Tennessee (200 units)
  • Stonybrook Apartments, Riviera Beach, Florida (216 units)
  • Warren-Tulane Apartments, Memphis, Tennessee (448 units)
  • Windsor Cove Apartments, Orlando, Florida (256 units)

The real estate broker was hired by GMF to evaluate the properties and estimate their market value.

“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 Thursday in a statement about the hiring of the broker.

A source at GMF said Friday that the company does not comment on pending sales until they are complete.

Although the asking price was unlisted, the I-TEAM found that the assets are valued at more than $90 million.

Dennis said he pleased when learned of the planned sale.

"It goes to show when people come together good things can happen," he said. "The people of Eureka Gardens came together with concerns, their city leaders acted, and because of all of that, we are at the next chapter of this bad situation. This is just the beginning of the next chapter. We have a long way to go. It goes to show that what was a bad situation in our city can now be turned into a great situation in Jacksonville."

Hazouri said it's clear Hamlet did not have the urgency to do what was needed to fix his Jacksonville properties.

"He seems to be feeling the pressure from HUD and the city of Jacksonville," Hazouri said. "I think we are seeing a lot of strong movement, positive movement on the part of Hamlet and HUD, Jacksonville city leaders and the I-TEAM reports. Bottom line, people can't be left behind like they have been to this point."

The fire marshal is working with 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.

"I'm very happy to know the residents there should have working carbon monoxide detectors by the end of this week," Hazouri said. “They haven't left yet. They still have a responsibility. They still have a to-do list. We want to make sure they are staying on top of it.”

As part of that to-do list, the Health Department recommended dehumidifiers for residents to help combat the mold issues on the property.

Dennis said he sent a letter to Hamlet requesting those for all 400 units in Eureka Gardens.

City Councilman Reggie Brown, who represents Washington Heights, issued a statement Friday about news of the sale, saying he "wishes GMF well and his concern has always been for the citizens (residents) at Washington Heights as the community continues to work toward progress."

Anyone interested in purchasing the GMF properties can contact AHA at 248-415-2630 or email info@mmaha.com.

Residents react to listing of property

The Eureka Gardens Tenants' Association held a news conference Friday, applauding the residents for banding together to make significant change at the complex.

Dennis said it was their cries for help that brought city leaders to their aid.

WATCH: Residents react to GMF properties up for sale

"I looked up what eureka means. It means a feeling of discovering something," Dennis said. "I think the people of Eureka (Gardens) discovered their voice."

Curry echoed that praise for the residents.

“It's been a long journey, a lot of time, but credit goes to the people of Eureka Gardens who stood up and said, 'Help us. It seems like no one cares about us,'” Curry said. “All the credit goes to them. ... It's important to know the people there stood up and said, 'We need change here,' so they get the credit."

Curry said Sen. Marco Rubio will be coming to town soon, and the two will walk Eureka Gardens together.

Tenant Association President Tracy Grant, who has been vocal in her disapproval of how Hamlet ran the property, said as long as GMF isn't running it anymore, she will be happy.

“However, for the person that purchases the property, I want to talk to them,” Grant said. “I want them to understand that this is not a game. Our lives are at stake. I want them to understand that when you come on this property, you're going to see what's already been done and you're going to see what needs to be done.”

Barbara Eberhart agree that new owners could make things better, if they have the right motives.

“It depends on if he is for us, not just for Eureka Gardens, but for the kids,” Eberhart said. “That is our main concern for the babies.”

Not everyone thought selling the property was the right solution, though.

“I don't feel as though that is right. You should have been doing what you are supposed to be doing. The walls have leaks. The pipes are old. It needs to be cut down and built from the bottom up,” Donnetta Redd said.

Ministry voices interest in buying property

The Rev. Mark Griffin of Wayman Ministries, which is across the street from Eureka Gardens, said his ministry has tried to purchase the property several times.

"Our goal is to take the money and reinvest it back into the community," Griffin said at the news conference. "For us, it's about these resident. Whether we are the owner or somebody else, we share the goal of making life better for them."

Wayman Ministries has been involved with the complex since 2007, when the area was a murder hot spot in Jacksonville. The ministry has been actively trying to make changes for the residents.

Griffin said he isn't sure Global Ministries will sell to his ministry, because they were one reason why GMF came under fire in the first place.

Curry said he's confident a new owner will step up in Jacksonville that GMF will sell to, and that the new owner will improve the lives of the families in need. 

“We have to get a responsible owner who goes through the vetting process,” Curry said. “The current owner didn't go through the proper underwriting process and that won't happen again.”

GMF bought the properties in 2012 in a bond deal exposed by the I-TEAM as bypassing all city protocol under then Mayor Alvin Brown.

Curry and Dennis 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.”

Trail of troubles for GMF

The planned sale of GMF's Jacksonville properties follows a magnitude of issues at Hamlet's properties all across the country.

Things really began to fall apart for GMF financially earlier this year in Memphis, Hamlet's hometown.

HUD cut off rent subsidies for more than 1,000 residents in February at Warren and Tulane Apartments, which the I-TEAM visited last year.

The loss of those federal funds caused Hamlet's $12 million in municipal bonds that he purchased to default, putting all of his Section 8 investments in jeopardy.

At the same time, conditions deteriorated at many of his properties, according to a federal inspection report, which also documented health and safety concerns like buckled ceilings and leaking pipes.

Federal officials were relocating more than 1,000 residents in Memphis.

The code enforcement violations continued at his Section 8 housing complex Windsor Cove in Orlando, including exposed electrical boxes, leaking ceilings and leaking pipes reported by residents.

Meanwhile at the Forest Cove apartments in Atlanta, residents complained of rodents, mold and sewage.

Other violations included roach infestations, fire exits that couldn't be used and broken smoke detectors.

GMF was recently audited with regard to its Goodwill Village apartment complex in Memphis, one of the properties now up for sale.

The accounting firm that looked at its monthly financial reports found issues with the bookkeeping.

The audit also pointed out a 2015 HUD inspection score of 49c, which is below the passing level of 60.

“The owner was unaware of the magnitude of the safety issues noted in the REAC inspection report,” according to the report.

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, Hamlet's hometown, 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.

GMF owns 60 apartment complexes across the country in other states like Alabama, Indiana, Louisiana, New York and North Carolina. Some of those properties, which are are not listed for sale, are thriving and don't have code compliance issues.

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