Erik Johnson Races The Clock

The city could have done better. The tenants could have done better. Now we’re going to throw down to fix it.

Erik Johnson made that promise to 27 survivors of a New Haven housing tragedy. He has 11 weeks to make good on it.

Johnson, head of the New Haven’s Livable City Initiative neighborhoods anti-blight agency, made that promise at an emotional meeting Thursday night at the Dwight police substation.

The meeting took place a half-block from the Dwight Gardens housing complex at 99 Edgewood Ave., where 27 households struggle to stay warm, get hot water, and keep out troublemakers from the mostly vacant apartments abandoned by a city-aided developer who had promised to rescue their community. The neighbors who showed up Thursday night pleaded for emergency repairs — and for the DeStefano administration not to allow yet another owner to come in and wreck the place. Johnson told them a preliminary deal is ​“80 percent” negotiated to have a new owner buy the complex and make repairs.

“We have been patient enough,” one neighbor told Johnson.

“We really don’t have a voice,” said another.

“Who is to make sure these folks don’t get the same deal they got in the past?” remarked their alderman, Frank Douglass. ​“Who’s to say the same kind of shoddy deal is not gonna go down?”

Johnson responded by reminding the group that they all, including him, share in the blame for the collapse of what was once one of New Haven’s prize tenant-run housing cooperatives. He responded by reminding the group that he has worked hard over the past year to get the snow shoveled, to get rents reduced, to get the heat back on while the property’s ownership remains in limbo and the owner has basically disappeared. And he responded by vowing to strike a better deal than he and his office did two years ago with the last purchaser.

“I live with this decision every day,” he said. ​“I am trying to fix it.”

He may not have much time to fix it. A new mayor, Toni Harp, takes office on Jan. 1. On the campaign trail she expressed dissatisfaction with how Johnson’s agency, LCI, has functioned; she suggested she might even dismantle it and spread its functions to other existing departments. Johnson’s employment contract ends Jan. 31.

Meanwhile, another winter is about to set in at Dwight Gardens.

A Tragedy In Two Parts

Dwight Gardens used to be called Dwight Co-op Homes. The complex of inner courtyards and 80 duplex townhouses and efficiencies opened in 1969, one of a slew of federally-supported tenant-managed co-ops around town. For decades the co-ops survived as safe, attractive places to live, where tenants made the major decisions and gradually paid off their mortgages to the federal Department of Housing & Urban Development (HUD).

Then the complexes largely fell victim to tenant infighting and mismanagement. Dwight Co-ops did. Conditions deteriorated. Bills went unpaid. In 2010, HUD initiated foreclosure proceedings to take over Dwight and hand it over to a private owner.

It was a heartbreaking moment for the families remaining at Dwight, some of them original tenants: They were in the 39th year of a 40-year mortgage. They had come that close to owning their complex. (Read about that here.)

Instead, city officials stepped in along with HUD to try to find a buyer who could pump millions of needed dollars in repairs to make the complex more livable again. Many developers turned them down. The city found Fairfield-based developer Garfield Spencer’s First National Development company, despite Spencer’s checkered business history. Spencer bought the property, with government help. He promised to make $6 million in repairs, with $1 million in help from the city.

Three years later, the complex is more rundown than ever, Spencer nowhere in sight. (The deal that would have provided the city money never materialized.) The gas and water companies are collecting rents directly because Spencer stiffed them, too. He stiffed the city for over $200,000 in back taxes; but a judge has stalled until next year a city effort to foreclose on the property, and even then Spencer could declare bankruptcy to further delay a foreclosure sale. HUD could just take over the property because it has a ​“reverter deed,” but it has chosen not to. And because the original deal with Spencer failed to include his posting a performance bond, the government had nowhere else to turn to find money for emergency repairs.

Spencer failed to respond to requests for comment for this story. In a recent court appearance, his property manager blamed the city for the company’s failure to keep up the complex or make repairs. She also faulted the difficulty of relocating tenants in order to make repairs. (Read about that in this story.)

Meanwhile, LCI received six bids from potential buyers to take over Dwight Gardens and make millions in repairs. Spencer agreed to a price approved by HUD for the sale. LCI formed a committee with Dwight Gardens tenants to vet the proposals and pick their favorites. (Read the details of those proposals here.) But then Spencer changed his mind, and the process LCI set up to choose a new buyer fell through. LCI — and by extension the tenants — could no longer choose who would buy the property.

Left To Clean Up

That has left city government — represented by LCI’s Erik Johnson — alone to field the outrage of the remaining tenants. To try to encourage a new buyer to negotiate with Spencer. And to keep Dwight Gardens safe in the meantime.

During last winter’s ​“Snowmaggedon” blizzard LCI hired 20 day laborers to shovel. In recent weeks LCI fixed broken heaters and brought tenants to the Fair Rent Commission, which ruled they would have to pay only half their monthly rent for now because of current conditions. (The rent now goes to the gas company, not Spencer.) LCI also boarded up vacant units that Spencer has left exposed.

Thursday night, tenants reported a new problem: they have hardly any hot water. Boilers meant to heat the water in three or four apartments are serving dozens of homes at once, they said.

“You get in [the bathtub], within a minute or two, it’s cold,” said one tenant.

“I don’t even have one minute,” reported another.

Johnson said he hadn’t heard these complaints before. He promised to get new boilers in right away.

“I understand people’s frustration,” Johnson told the crowd. ​“I understand the need to make sure that you have a safe and secure environment for your children. When I say that I didn’t know that the water tank was not sized properly, I didn’t know or I would have had someone address it when I made the commitment to have the heat on. So now that I know I’m going to address it.”

He pleaded with the group to acknowledge that they, as well as he, share responsibility for Dwight Gardens’ current fate.

“I just want to say one thing in all of this. Right? … There was an unfortunate situation. We got a bad developer who did not live up to their words. Right? But we’re here because we had a cooperative that people here owned that failed. Right? We’re here because some of the people here who are members of a cooperative that failed. So I understand your frustration with the process, right? I’m here because I’m trying to fix a problem that I did not create …”

“Absolutely,” remarked one member of the crowd.

“… and that some of the people in this room participated in the creation of …” Johnson continued.

“Absolutely.”

“… You’ve got to remember this history. When this happened two-plus years ago, when the co-op went into foreclosure, 67 families who [still] lived here. Right? Sixty-seven families who lived here when your former coop went into foreclosure. And the market was different. Nobody wanted to deal with 67 families from a relocation, community relations whatever. So we talked to people up and down the East Coast to try to get them to look at how to solve this failed co-op He came up as a person who was credible at the time. Other people chose not to do it.

“As much as we are going through a very difficult process now, we cannot forget the history of why we are here… This isn’t an ​‘I told you so’ meeting and ​‘Forgive me.’ It’s how can we get to a better place than we are?”

Why So Secret?

Now, Johnson announced at Thursday night’s meeting, Spencer is in serious negotiations with a buyer for the property. He said the negotiations are ​“80 percent” completed.

Neighbors asked for the name of the potential new owner. Even though many in the room knew the name—Bridgeport-based Navarino Capital Management—Johnson declined to state it publicly. (Watch some of the interaction in the video at the top of the story.)

“Why’s the name top secret? Put it out there … so we can Google it,” said one tenant (who declined to give her name). ​“We have been patient enough. Why can’t we just have the name again? Form our own opinions …”

“Can we change the game a little bit and meet with them prior to them signing?” asked another.

Johnson assured the group that once a potential sale deal is signed, he will bring the developer in to meet with tenants. HUD still has to sign off on the deal; the DeStefano administration will ​“advocate” for the tenants after they decide how they feel about it, Johnson assured them. So he will seek their approval first after they have a chance to question the potential buyer.

“Before the city signs off, they’re going to come in and say, ​‘This is what they’re going to do,’” Johnson said.

He assured the group that a new buyer will have to agree to keep them in their apartments at affordable rents and make major repairs. Also, Johnson said, this time the city will make sure the developer posts a performance bond.

But given Spencer’s history of failing to keep promises or follow through on expected deals, Johnson said, he didn’t want to name the potential buyer yet. Not until Spencer’s negotiations with the potential buyer advance from 80 percent to 100 percent.

Some in the crowd — including former Alderwoman Olivia Martson, who lives around the corner — pressed Johnson about why the city would allow yet another (potentially out-of-town) developer to come in. Martson also pressed Johnson to be more ​“transparent” about the process.

“You said, ​‘They’re gonna come’ … Garfield and them came” and then further wrecked the property, one tenant said.

Johnson responded that now that Garfield owns the property, the city can’t just sell the property. Because it doesn’t own the property or have a reverter deed like HUD’s. He said he wants to see the process move as quickly as possible in order to get a new owner in, as long as that owner can make the repairs and keep the project affordable.

Go Local Instead?

Another Dwight neighbor at the meeting, Matt Short (pictured), later expressed skepticism about the pending Navarino deal. Short, who sits on the housing authority’s Board of Commissioners, said he’d prefer that the authority’s Glendower Group development affiliate be part of the eventual team taking over the property. Or if not the housing authority, then an ​“arm’s‑length local developer.” A number of the six finalists in the previous, aborted LCI-sponsored competition for the property, are local to New Haven.

When Glendower and others submitted proposals for the property, a debate emerged about the best future direction for Dwight Gardens: Should it remain mixed-income, or even go a bit more upscale? Or should it become a housing authority property, with a greater mix of low-income families and remaining off the tax rolls? (Click here to read about that.)

“I am very concerned that the understandably frustrated residents, who used to number 60+ families and now number 20+, after years of dealing with no heat, no maintenance, some elderly and some with several children, have little to no trust or hope for a good outcome and are more likely to abandon their rights rather than fight for them if a good solution doesn’t appear very very soon,” Matt Short argued. He described Navarino, the company currently in negotiations with Spencer, as ​“a developer associated with the failed project.”

Johnson was asked if he knew of any connections that Navarino already has with Spencer’s company. Johnson responded that Navarino has in the past purchased other troubled property from Spencer. If Navarino emerges as the potential buyer, it will be ​“fair” for the city and tenants to look at how well Navarino has done with that property, Johnson said. He added that he knows of no other business relationships between Navarino and Spencer, such as loans.

Navarino principal Justin Goldberg told the Independent in August that his company plans to spend more than $6 million fixing up Dwight Gardens. ​“We are committed to the Dwight project,” he said. ​“We don’t just fix up property and leave town. We make long-term commitments.” Goldberg said his company will adhere to all the city and HUD requirements for how the property should be redeveloped.

Mayor-Elect Harp, meanwhile, floated a completely different idea during the campaign: Have the city organize a new tenant co-op, with greater government oversight to guard against mismanagement.

Some Hope Left

When Thursday night’s meeting at the Dwight police substation abruptly ended, tenants remained frustrated, skeptical that the next ​“savior” for their complex will do any better than the last.

Tenants also credited Johnson for continuing to keep up the fight on their behalf, whatever mistakes he or others in government may have made in negotiating the last deal.

“You did a lot, and I love you,” Annette Moore told him. ​“When the snow came, you brought out 20 guys.” to help.

“This guy didn’t have to be here,” noted Bobby Ewing (at right in above photo), who with his wife has lived at the complex since it opened in 1969. ​“He’s doing the best he can do.”

After so many false starts and broken promises, Ewing said, ​“I’ll believe [any new promise] when it happens.” He also believes, he said, that Johnson and his crew ​“are trying.”

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
• Fed Shutdown Stalls Dwight Gardens Rescue