Housing Disaster Spawns 4 Lawsuits

Brian Slattery PhotoThe city and the owners of the dilapidated Church Street South housing complex have presented a united front when it comes to redeveloping the site. But when it comes to taxes and how much the owners should pay, they’ve essentially told each other, “I’ll see you in court!”

Northland Investment Corp., the Boston-based owner of the soon-to-be-demolished 301-unit subsidized apartment complex across from the train station, has taken the city to court over its most recent tax assessment.

It is one of at least four lawsuits moving their way through state courts to resolve unfinished business with New Haven’s biggest housing and public-health emergency in years.

Northland, doing business under the name Church Street New Haven LLC, is appealing the assessed value of six parcels comprising the sprawling complex that deteriorated so badly that officials ordered it cleared out in order to protect tenants’ lives. The company has asked a judge to do what the city’s Board of Assessment Appeals refused to do last spring — lower the tax bill.

After allowing the apartment complex to fall into such disrepair that it was forced to find new homes for its tenants, Northland argues in its court filing that the six parcels with the crumbling buildings are worth less than what the city says they are. The filing doesn’t specify how much less the company believe it’s worth.

Years-Long Relocation Nears End

The land could be worth a lot more once the complex is torn down to make way for a bigger mixed-use development, which Northland and the city are looking to team up on raising financing to build. But for now the process of relocating tenants has taken two years, and 11 families remain.

City housing authority Executive Director Karen DuBois-Walton said 260 families used the emergency opportunity to take their government subsidy to a landlord who would accept it. The majority of the families —229 to be exact — remain within the housing authority’s jurisdiction as renters under the federal Section 8 rental subsidy program, DuBois-Walton said.

She said of the 11 remaining families, five have opted to remain on a project-based subsidy like they had at Church Street South, meaning the subsidy is tied to a location, not a family.

“Northland works with [U.S. Housing and Urban Development] to identify landlords where the subsidy can be transferred,” DuBois-Walton said.  “We are not handling those.”

Three families with tenant-based vouchers are waiting for their new unit to pass an inspection before they can sign a lease and three are still looking for a place to live. Northland worked a deal with HUD that allowed it to transfer 82 of its project-based units to another federally subsidized complex in the city, Beechwood Gardens on Whalley Avenue.

Worth Less?

Back in October 2016, the city said that the following parcels at Church Street South had the following values:

• 1 Tower Lane, fair market value: $596,200; assessed value: $417,340
• 86 South Orange St., fair market value: $3,118,500; assessed value: $2,182,950
• 91 Columbus Ave., fair market value: $1,198,500; assessed value: $838,950
• 94 Columbus Ave., fair market value: $2,148,000; assessed value: $1,503,600
• 89 Union Ave., fair market value: $1,292,000; assessed value: $904,400
• 169 Union Ave., fair market value: $1,386,400; assessed value: $970, 480

Northland filed an appeal to the Board of Assessment Appeals this past April “claiming to be aggrieved by the actions of the Assessors,” according to the suit filed in Superior Court in June by attorney Michael D. Reiner. The board denied the appeal, prompting Northland to seek relief from the court.

For each of the six parcels, Reiner wrote, “The valuation of this property placed thereon by the assessors was not that percentage of its true and actual value on the Assessment Date but was grossly excessive, disproportionate and unlawful.

“The applicant appeals from the action and ruling of the Board of Assessment Appeals and prays that the valuation of this property on the Assessment date be reduced to 70 percent of its true and actual value,” he further wrote.

When contacted Tuesday, attorney Reiner said that he is not authorized to discuss anything about the case. The court filings don’t say what Northland thinks the “true and actual” value of the parcels are. Pretrial conferences are slated for April and May, according to the state’s judicial website.

City spokesman Laurence Grotheer said in a statement, “It is both the policy and practice of the City of New Haven to withhold comment on matters about which there is pending litigation.”

From Plaintiff To Defendant

Meanwhile, lawsuits against Northland/Church Street New Haven continue to wind their way through the court system.

In November 2016, a class action suit was filed against Northland by attorney David Rosen on behalf of nearly 100 Church Street South tenants and in many cases their children. It was transferred from the Superior Court in New Haven to Waterbury in early 2017 (where a New Haven judge, Linda Lager, is assigned to the case). Court records show that it is headed for a status conference near the end of January.

A plaintiff in the class action suit, Margret Brodie, has a separate slip and fall case pending against Northland. She alleges that on Feb. 15, 2015, Northland’s failure to remove snow and ice caused her to fall and injure her right ankle, her spine and both her hands. She argues in the complaint that not only did she incur medical costs but it diminished her ability to work. Northland’s response: Prove it.

As part of its special defense, Northland’s attorneys wrote, “Plaintiff’s injuries and damages, if any were caused by her own comparative negligence and, therefore, her recovery is barred or must be proportionately reduced in that: 1. she failed to keep a lookout; 2. she failed to exercise reasonable care for her own safety under the circumstances there and existing; and 3. she failed to observe and avoid the alleged defect, the existence of which is denied.”

Northland made a cross-claim against the company that it had contracted to handle ice and snow removal, All-Around Home improvement. Northland argues that if Brodie is determined by the court to be owed damages, the contractor should be the one made to pay up. Brodie’s case is scheduled for jury selection and trial in May, according to court records.

A separate suit filed by a former tenant named Reuben Negron and his family, who lived at 34 Cinque Green in Church Street South, is also moving ahead in Waterbury Superior Court. Three expert witnesses recently submitted testimony to the court that they had inspected the apartment and found conditions of water damage and mold as had been reported by the city’s anti-blight agency, Livable City Initiative, and the tenants.

Master Code Professional Mark Tebbets told the court that he inspected Negron’s former apartment back in July: “I was allowed access to only unit 15-B, however, the entire building appeared to be in poor condition. The extent of the deficiencies found in this one unit would indicate that the entire building was more than likely in the same extremely poor condition.”

He went on to write, “Every room in unit 15-B showed signs of deterioration, broken sheetrock, evidence of water leakage from the roof or wall infiltration and a prevalence of mold on the interior of walls. Inspection of the bathroom showed improper plumbing repairs of the drainage system and multiple repairs which appear to be done at various times.

“All of the violations observed appeared to have existed for a considerable length of time,” he further wrote.

A hearing is scheduled for Negron’s case is set for March; jury selection and trial is set to start in April.

Northland has yet to file a response to that suit.

Previous coverage of Church Street South:
20 Last Families Urged To Move Out
Church St. South Refugees Fight Back
Church St. South Transfers 82 Section 8 Units
Tenants Seek A Ticket Back Home
City Teams With Northland To Rebuild
Church Street South Tenants’ Tickets Have Arrived
Church Street South Demolition Begins
This Time, Harp Gets HUD Face Time
Nightmare In 74B
Surprise! Now HUD Flunks Church St. South
Church St. South Tenants Get A Choice
Home-For-Xmas? Not Happening
Now It’s Christmas, Not Thanksgiving
Pols Enlist In Church Street South Fight
Raze? Preserve? Or Renew?
Church Street South Has A Suitor
Northland Faces Class-Action Lawsuit On Church Street South
First Attempt To Help Tenants Shuts Down
Few Details For Left-Behind Tenants
HUD: Help’s Here. Details To Follow
Mixed Signals For Church Street South Families
Church St. South Families Displaced A 2nd Time — For Yale Family Weekend
Church Street South Getting Cleared Out
200 Apartments Identified For Church Street South Families
Northland Asks Housing Authority For Help
Welcome Home
Shoddy Repairs Raise Alarm — & Northland Offer
Northland Gets Default Order — & A New Offer
HUD, Pike Step In
Northland Ordered To Fix Another 17 Roofs
Church Street South Evacuees Crammed In Hotel
Church Street South Endgame: Raze, Rebuild
Harp Blasts Northland, HUD
Flooding Plagues Once-Condemned Apartment
Church Street South Hit With 30 New Orders
Complaints Mount Against Church Street South
City Cracks Down On Church Street South, Again
Complex Flunks Fed Inspection, Rakes In Fed $$
Welcome Home — To Frozen Pipes
City Spotted Deadly Dangers; Feds Gave OK
No One Called 911 | “Hero” Didn’t Hesitate
“New” Church Street South Goes Nowhere Fast
Church Street South Tenants Organize

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posted by: 1644 on January 8, 2018  4:11am

Given that the city has taken the position that the apartments are uninhabitable, I don’t see how the city can assess them as if they were.  If the city wanted the property assessed for a high value, it should have facilitated, not obstructed, the owner’s plans to replace the existing, dilapidated apartments with new, more valuable complex. Given that the buildings need to be razed, they have a negative value.  The value of the land is dependent on what can be built on it.  The more valuable the improvements the city allows, the more valuable the land.

posted by: robn on January 8, 2018  10:16am

Quick math on 86 S Orange which is a big parcel….

Improvements   = $2,006,300  
Land = $1,112,200
TOTAL = $3,118,500

total sf in all of the buildings = 68,272

So even including the land, the appraisal of the buildings only equals $45/sf.
A random Orange St house pulled out of a hat is in the $170/sf range.

Northland has nothing to complain about.

posted by: Noteworthy on January 8, 2018  10:16am

Frivolous Meets Incompetence Notes:

1. The Rosen lawsuit is a waste of time; the damages are minimal and is further complicated by an aging facility, heavy abuse by tenants and an insufficient cash flow/payments by HUD to accomodate proper maintenance.

2. The City of New Haven Building/Code Enforcement Department oversaw and visited this project over the years. It oversaw its demise and did nothing until ... when?

3. The city’s tax assessment department should get a clue. It doesn’t matter why a property goes into disrepair - the fact that it is so bad, it needs to be torn down, should be a good indication of its value. It is stupid to get embroiled in a lawsuit when there is ample evidence of its worth.

4. Moreover - the city’s view on the value is directly tied to its need for cash - which is why we all got supplemental tax increases at Christmas. The state’s cutbacks, its continuing budget crisis, and the city’s own deficit spending has the mayor and her lieutenants making irrational and unsound decisions. Last month, it diverted bond payments to cover part of the $13 million deficit in the healthcare account - now they’re being irrational about true value. Time to smarten up.

posted by: wendy1 on January 8, 2018  2:37pm

I hope that terrible landlord loses every time and pays through the nose—- taxes, medical expenses, damages, etc.  Not only are their buildings ugly, but they are dangerous and hurt a lot of people of all ages.  I consider the city complicit as far as guilt because they ignore the poor always.

I can only hope these judges have scruples and cant be bought off like our city politicians.

posted by: okaragozian1 on January 11, 2018  8:55pm

There is no doubt that an empty decrepit property is not worth as much as fully occupied well kept property.  The problem the attorneys are creating is that they are presenting an argument without presenting a counter-assessment showing a lower value.

posted by: Jonathan Hopkins on January 12, 2018  2:22pm

I suspect that at least some of these tragedies and the enormity of the relocation effort could have been avoided if from the beginning the City, HANH, and the developer had pursued a strategy of new infill construction, phased renovation, and limited and surgical demolition of the existing complex. Farnam Courts, Quinnipiac Terrace, Eastview Terrace, and 65 Dwight Street (the former Trade Union Plaza) each used at least one of those three tactics when they were reconceived. 65 Dwight Street, which is nearly identical in design and construction as Church Street South, has been renovated several times since HUD first foreclosed upon it in the 1980s. Eastview Terrace was partially renovated, partially demolished, and also welcomed new rowhouse construction in the late 2000s as part of its Hope VI revamp. Quinnipiac Terrace was demolished and rebuilt in phases so that some tenants could remain in place as construction began when it was rebuilt under Hope VI in the late 2000s. Same thing at Farnam Courts right now - if you go to the site, a portion of the existing complex was demolished for the staging area for the construction of new buildings along Grand Avenue (built atop a former urban renewal-era playground and park), while some existing residents remain in apartments at the rear of the block near the train tracks. Has the disaster at Church Street South really had to unfold the way it has?

posted by: 1644 on January 12, 2018  3:48pm

JH:  Of course it hasn’t.  But Northland has wanted to raze if from the beginning, while the city has opposed Northland’s redevelopment plan.  The result has been the subsidized tenants remaining in place while the owner withheld maintenance funds from a building it did not want.  I don’t know what Northland’s obligation to HUD was.  I know the first private, investor owners of Union Plaza, who bought it from HUD,  intended to terminate the projects section 8 status when the mortgage was released, and covert the complex to market rate.  Their investment in the complex, including fencing, cleaning, maintaining the units as needed, landscaping, eviction of troublesome tenants, etc., was calculated to pay off when it was sold off as condominiums.  This didn’t happen for several reasons, including a change of heart by a partner who managed the place, as well as a general downturn in the real estate market.  The next owner just milked the place as a rental and didn’t maintain it, eventually selling to someone who did renovate it and converted it to market rate.  The disaster has unfolded because the parties are working at cross purposes: the owner wants to clear the site to build something of greater value, the tenant’s don’t want to move from subsidized apartments, and the city wants to protect the tenants.

posted by: Jonathan Hopkins on January 12, 2018  7:40pm

Thanks for your comments. My understanding is that HUD prohibits tenant displacement without some kind of relocation service. Last I knew, HANH was handling that daunting process. I believe New Haven city representatives have encouraged officials to pursue - through a grant application to HUD - for a 1-to-1 replacement of subsidized units (30% of the proposed 1,000 new units to be built) along with any redevelopment project, but they are also very much looking forward to the added tax revenue, building permit fees, influx of smaller households that require less services, and myriad of other perceived benefits that would stem from redevelopment. And these new subsidized units would of course be smaller than existing units and open to a range of incomes that exceed what is traditionally considered “low-income”.

I wonder if it could have been feasible to do a phased redevelopment project that built new infill housing on underused parts of the site, then moved existing tenants into those units, then renovated the vacated existing units in the complex for market rate. I suspect that this approach could have appeased concerns about the well-being of existing tenants, addressed the economic development goals of city officials, and reduced relocation costs, expedited construction, and achieved adequate returns-on-investment for the developer. Perhaps site-work, utilities, renovation costs, and financing (HUD, CHFA, CT DOH, NPS, CT SHPO, etc.) would have complicated matters, but if McConaughey Terrace and Eastview Terrace were able to successfully deal with similar issues, I wonder if Church Street South could have as well.