Fed Shutdown Stalls Dwight Gardens Rescue

Yet another bureaucratic hurdle has blocked New Haven’s efforts to recapture control of a troubled housing complex before winter sets in: the federal government shutdown.

City government’s anti-blight agency, the Livable City Initiative (LCI), has counted on the federal Department of Housing and Urban Development (HUD) to foreclose on troubled Dwight Gardens at 99 Edgewood Ave. That way HUD could turn over the complex to LCI, which could then start making long-needed repairs and securing the premises for cold weather.

Then came the budget impasse in Washington between the U.S. House of Representatives and the Obama Administration, which shut down all non-“emergency” functions of the federal government. Now there is, for all intents and purposes, no HUD to foreclose on 99 Edgewood.

That has put LCI’s latest efforts on hold, according to the agency’s executive director, Erik Johnson.

Meanwhile, a sheriff this past week tried to deliver a notice to the property management, a court order requiring that rents go into receivership to pay debts owed to the Regional Water Authority for unpaid bills. The sheriff ended up just taping the notice to the (now out-of-date foreclosure sale sign at the front of the complex. The RWA is not first in line bringing a court order for back payments: The gas company had already done the same.

That’s just the latest development in the heart-breaking and then hobbling saga of Dwight Gardens, nee ​“Dwight Coop Homes.”

The property was one of a number of ​‘60s-era federally backed housing co-ops that have failed in recent years. The tenants in some cases have lived there for decades, most of that time as co-op members who came tantalizingly close to owning their complex outright before it all fell apart. The federal government previously had foreclosed on the property in 2010 and sold it to the city, which in turn sold it to Bridgeport developer Garfield Spencer, despite his spotty financial record, on the condition that he make $6 million in repairs, $1 million of that coming from a city loan.

Spencer’s First National Development company failed to make most of the repairs. The once-proud complex slid into further disrepair. Fewer than 30 of the 80 homes are still occupied. Remaining tenants endured a tough winter last year and have waited since for New Haven government’s Livable City Initiative (LCI) to find a new owner.

An LCI attempt to broker a sale between Spencer and a new buyer faltered when Spencer and the feds couldn’t come to terms on how much money he should be able to recover in the deal for the repairs he did get around to making.

Next LCI went to court to try to foreclose on the property for its back-tax bill, which had topped $200,000. The developer convinced a judge to delay the auction to give it more time to try to negotiate a sale, which it continues to try to do, according to Johnson. (Spencer couldn’t not be reached for comment.) Spencer’s project manager blamed a combination of economic forces and government bureaucratic missteps for the problems at the site. (Read about that here.)

LCI then turned to HUD, which has a ​“reverter deed” on the property. That means it has the right to go ahead and foreclose on it. That was the plan, until the shutdown hit. LCI was ready to swing into action, receiving approval from the City Plan Commission three weeks ago to go ahead and take control of the property after a HUD foreclosure.

LCI’s Johnson and his boss, Mayor John DeStefano, have met with Dwight Gardens tenants and their alderman, Frank Douglass, to promise to move quickly on a rescue effort.

Johnson said this week that he remains committed. If all else fails, LCI will slap a lien on the property for the maintenance works its own crews have to do on the project, and hire an outside maintenance firm for the period pending an eventual sale to a new owner, Johnson said.

“We’ve got to hold them to that,” said Alderman Douglass. ​“I do believe they’re on the right track. In the past everybody dropped the ball. They’re listening. They know if they don’t do what they should do, we’re going to make a big noise.”

Previous coverage of the Dwight Co-Ops/Dwight Gardens Saga (in chronological order):

• On Verge Of A Dream, Co-op Faces Foreclosure
• City Finds Potential Buyer For Dwight Co-Op Homes
• City’s Co-op Savior Has Troubled Track Record
• Dwight Coop Rescue Advances
• Dwight Co-op Deal Squeaks Through
• Housing Authority Quits Dwight Co-Op Deal
• Dwight Co-Op Makeover In Limbo
• Day Laborers Move The ​“Mountain”
• City Turns Up Heat On Dwight Co-Op Landlord
• City Seeks New Buyer For Dwight Co-Ops
• 6 Vie To Buy Failed Housing Co-op
• Dwight Gardens Rescue Effort Takes New Turn
• Not So Fast! Auction’s Off
• Dwight Gardens Rescue Plan Advances