HUD gives owner 60 days to repair Eureka Gardens

Troubled Section 8 property failed inspection last month

JACKSONVILLE, Fla. – Nearly 18 months after the I-TEAM first reported on unsafe and unsanitary conditions at the Eureka Gardens subsidized housing complex on Jacksonville's Westside, the complex has failed its latest inspection.

An inspection report from the U.S. Department of Housing and Urban Development's Real Estate Assessment Center first reached city officials at 7:15 a.m. Tuesday. It noted numerous serious deficiencies, especially inside units of the complex. It also said the current owner, the Global Ministries Foundation, is now in default of its contract to receive federal funding and has 60 days to get things fixed.

During that inspection, serious deficiencies were identified, especially in the units of the project, and the project ultimately received a score of 59c," according to the REAC's Notice of Default sent to owner Global Ministries Foundation on Monday. "Significant health and safety violations were cited, including infestations, missing smoke detectors, exposed or missing electrical breakers or fuses, damaged stairs, unusable emergency exits and misaligned chimney or ventilation systems. As the symbol “c” signifies, some of these deficiencies were exigent (needing to be dealt with immediately). This is an unacceptable result."

The notice orders Global Ministries to survey 100 percent of the complex, correct all deficiencies and provide HUD with weekly updates, including photographic evidence of repairs, contracts, invoices and work orders documenting the progress.

DOCUMENT: HUD's Notice of Default sent to Global Ministries

Under the terms of HUD's contract with Global Ministries, HUD could take possession of the project in order to redirect rent and other payments toward paying for repairs, reduce or suspend federal housing assistance payments or terminate the contract entirely.

Global Ministries Preservation of Affordability Corp. spokeswoman Audrey Young sent a statement saying it planned to appeal the REAC's Notice of Default.

We are working closely with HUD on an appeal and fully trust that HUD will make warranted adjustments based on our appeal. After decades of neglect by previous owners, GMF has invested over $3 million in restoration of Eureka Gardens, including restoration of its critical infrastructure. Eureka Gardens did not evolve into a problem property overnight; rather, it has have been a burden to the City of Jacksonville for decades. Local government and community leaders largely ignored these important homes to families in need of affordable housing and allowed the properties to suffer decades of neglect and decay under previous owners. GMF recognized this need when it acquired the properties in 2012 and continues to work tirelessly to make improvements for the benefit of residents, improvements which should have been made years prior to GMF’s purchase of these historically troubled properties."

City Councilman Garrett Dennis, whose district includes Eureka Gardens, was the first city official to react to the latest inspection report. He said he was saddened and disappointed.

While Millennia Corp. is in the process of purchasing the property and other Section 8 housing complexes from the Rev. Richard Hamlet's Global Ministries Foundation, as the current owner of the property that houses 400 families, GMF is required to provide safe accommodations for tenants and is responsible for getting things fixed.

"For us as a city, we're going to use the bully pulpit to make sure he does what he supposed to do, as well as put the pressure on our partners in D.C.," Dennis said. "At the end of the day, it's Rev. Hamlet's responsibility to fix and repair."

Millennia said it plans a complete rehab of the entire property once it takes ownership, but Dennis said the sale of the GMF properties is a long and complicated process. 

"Right now, they're working through the finances of it," Dennis said. "They will need HUD to relieve them of some things. They wanted HUD to give a little more in the contract. At one point, we were told it would be the second quarter, but because it's a large purchase, it may be the end of the year."

Mayor Lenny Curry's office released a statement about HUD's notice to GMF.

"We are aware of the inspection results and maintain our commitment to working with HUD officials on a resolution that addresses the needs of residents. Mayor Curry has been a strong advocate for improvements to this property, leading to efforts that have resulted in management changes."

The I-TEAM has reported on deplorable living conditions at Eureka Gardens for well over a year, and that reporting resulted in a city code enforcement sweep, a re-inspection by HUD last year, a visit by U.S. Sen. Marco Rubio, R-Fla., and a special hearing before the U.S. Senate.

Rubio and U.S. Rep. Al Lawson, D-Tallahassee, both said that 18 months with no improvements to the conditions at Eureka Gardens is unacceptable.

Rubio said he remains deeply concerned for the people living at Eureka Gardens and said it's important that the HUD inspection process is no longer handing out passing grades to apartment facilities that don't deserve them.

"I'm going to continue working with my colleagues in Congress and the new administration to make sure these issues are finally resolved and we move forward on the reforms we need to protect our people and hold slumlords accountable," Rubio wrote in a statement.

Lawson said that the people living at Eureka Gardens are just like other Americans: They just want a clean, affordable, safe place to call home. He said that no matter their income, renters have the right to expect and get routine maintenance.

Hope for the future

Just hours after the inspection report was released, there was a conference call Tuesday afternoon between HUD and Jacksonville leaders, as well as representatives from the offices of U.S. Sen. Bill Nelson, D-Fla., Rubio and Nelson about the troubles at Eureka Gardens.

The I-TEAM has learned that HUD also met with Millennia Tuesday morning in Washington, D.C., and Millennia proposed setting aside $18.8 million to rehab the property when it takes over -- allotting $47,000 for each unit at Eureka Gardens. 

Nelson's office released the following statement about the meeting, saying, in part, "They discussed Millennia’s recent assumption of management responsibilities for Eureka Gardens Apartments in Jacksonville, Fla., and their plans to take full control of the property by year’s end. Nelson expressed his concerns about the property’s recent failed HUD inspection. Millennia officials told Nelson that they remain committed to improving conditions at the apartment building and are in the process of building the capital needed to turn things around as soon as possible."

Troubled history

Beginning 18 months ago, the I-TEAM has documented squalor, mold, crumbling stairs, gas leaks and carbon monoxide leaks at the complex, which receives $6 million in taxpayer money annually. The complex kept passing HUD inspections, scoring an 85 in the fall of 2015 and a 62 last spring.

News4Jax returned to the property Monday in anticipation of the inspection results and was told the complex seemed to be in limbo, waiting for the sale to go through.

"They've been doing a little patchwork here and there. We're still living in a deplorable state," resident Mona Lisa Arnold said. "We got innocent people. You got disabled people, elderly people. We got children. People that are just trying to make it."

Arnold was one of the first tenants to contact the I-TEAM about mold, carbon monoxide leaks and crumbling stairs in 2015. She said things aren't much better now. She battles mold and plumbing issues every day in her bathroom.

"It's deplorable. Feces and stuff is always backing up in the bathtub. Kitchen is always backing up."

SLIDESHOW: Problems still visible during Monday visit to complex
MORE COVERAGE: Special section looking back at Eureka Gardens coverage

Arnold said she can't sleep at night because of gun violence.

"You see this mattress here?" Arnold said. "This is what I sleep on because of the bullets.

Arnold wants Hamlet and his religious nonprofit turned Section 8 housing landlord, Global Ministries, to face legal and financial consequences.

"I want to see that he's accountable for this here, because he's responsible," Arnold said.

A failed inspection at another Global Ministries-owned apartment complex led to legal issues for the organization.  In May 2015, HUD notified Global Ministries of a failed inspection at the Warren-Tulane Apartments in Memphis, Tennessee, and found them in default.  Nine months later, in February 2016, HUD terminated the contract for Warren-Tulane, and Global Ministries lost the federal funding it was receiving to run the complex.  The bonds that Global Ministries used to purchase the properties were then downgraded to a Triple-C rating, or junk bond status.  A major investment bank, Bank of New York Mellon, then sued Global Ministries in federal court, alleging fraud and breach of contract in connection with those bonds. That lawsuit is ongoing.

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