AMHA lawsuit says Cascade Village Apartments’ owners ‘have failed the community’

The Akron Metropolitan Housing Authority filed suit Thursday against the owner and manager of Cascade Village Apartments, accusing The Community Builders of mismanagement while trying to prevent them from walking away from the properties.

On Friday, Summit County Common Pleas Judge Mary Margaret Rowlands appointed a receiver for the 242-unit mixed-income housing community, saying in her order that doing so would help protect Cascade Village residents. The case was later moved to federal court in the Northern District of Ohio.

Stuck in the middle are people like Dawaun Addie, who said tenants have long been dealing with water damage, vermin and other maintenance and safety issues that have gone unaddressed by TCB. 

Addie, a longtime resident who moved out last year but still comes to Cascade Village daily as a caretaker for his mother, said Friday he was worried about what the legal dispute would mean for people who call the apartments home.

‘To be told you’re no longer wanted —,” he said. “I wish we could just wipe away TCB.”

The dispute comes as TCB’s CEO, Bart Mitchell, said in a statement that his nonprofit had been trying for nearly seven months to reach an agreement in which TCB transferred ownership of Cascade Village to AMHA. In another statement, AMHA Executive Director Herman Hill said the agency had no legal obligation to take on the property.

Trash, bugs and other issues

Outside the home of Victor Jackson and Deborah Taylor Thursday afternoon, several trash bags were lying under a tree, covered in snow. There was another buried in snow by a fence. Jackson said it’s been a common occurrence for the two years the couple has lived in Cascade Village. 

Even when residents don’t drop trash outside their door, the bins that are meant for garbage overflow to the point where, last summer, they attracted insects and critters, Taylor said. Jackson said he’d seen raccoons, possums, mice and rats.

“Management is abysmal,” he said. 

Jackson said neighbors look out for each other — Addie took it upon himself to clear paths in the snow when management didn’t do it so his mother could get out of her apartment. But there has been a series of problems, Jackson said, and TCB has been unresponsive to requests from tenants.

“They have let people live in such horrid conditions,” Addie said. “TCB just let this place go.”

Melinda Swan, a TCB spokesperson, said in an email Monday that the trash bags outside Jackson’s apartment had been removed and that there are currently no open water damage orders. She added that even though a receiver has been appointed for the property, TCB staff are on site completing work orders and responding to any issues residents raised to Mitchell when he was at the property last week.

Additionally, Swan said in a statement, recent independent inspections showed scores of 85, 92 and 95 out of 100. She said when maintenance issues arise, TCB works promptly to correct them.

“The Community Builders continues to provide safe, healthy housing as manager of Cascade Village,” she wrote.

The Community Builders planned to terminate management agreement

The complex, on East North Street in Akron’s Cascade Valley neighborhood, includes Cascade Village South, North and East-West. It replaced Elizabeth Park Homes, a public housing community owned by AMHA.

In 2002, AMHA received more than $19 million of federal funding from the U.S. Department of Housing and Urban Development to revitalize the area. TCB was selected as the developer through a competitive process, AMHA said in its lawsuit. 

AMHA also loaned TCB $5.2 million to help finance three phases of the project, the suit said. Other funding came from the City of Akron, low-income housing tax credits and grants.

“In sum, AMHA, and many other entities provided virtually all of the funding needed to construct Cascade Village and ensure its vibrancy for years to come,” the suit said. “Importantly, Community Builders was part of this project from its inception and determined, at the start of the project, that the funding sources secured would cover the cost of the Cascade Village.”

But on Jan. 22, TCB’s executive vice president and chief property management officer, Lisa Wilcox-Erhardt, sent letters terminating the management agreement with another TCB group for Cascade Village South, North and East-West. In the letters, she said the management group was owed more than $1.2 million in deferred management fees and she intended to terminate the management agreement beginning Jan. 29.

As a courtesy to residents, the letters said, TCB would be willing to provide one-week extensions to the management services.

Those termination letters came after a series of Jan. 16 default letters Wilcox-Erhardt sent, telling TCB’s CFO that loan agreements, deferred management fees and advances for maintenance and other work totaled more than $4 million.

In a Jan. 26 response to those default letters, AMHA said TCB was in breach of its obligations, failing to collect rents, make repairs or fill vacancies, in addition to failing to pay the management company.

AMHA, which owns the land the apartments are on and gave TCB a ground lease, had the right to begin foreclosure actions, the letters said. It asked TCB to make plans to make payments and rent out empty units.

“Despite being provided every opportunity for Cascade Village to thrive, Community Builders and its affiliates have failed the community,” the lawsuit said.

Dispute has been going on for months

Mitchell, the TCB CEO, said in his statement that he had been trying for seven months to find an agreement that would give the complex to AMHA. Such efforts were rebuffed, he said, despite repeated efforts “to reach agreement on a voluntary transfer of ownership.”

“We crafted multiple proposals designed to find a positive solution that serves the residents of Cascade Village and the entire community,” Mitchell said. “Each of these proposals has had at its core working together with AMHA to ensure a smooth transition.”

Swan, the TCB spokesperson, said TCB wanted to give the property to AMHA so it would be eligible for a HUD refinancing program that she said would help address long-term stability needs for the apartments. 

In a text message, Amina Hall, a spokesperson for AMHA, said Cascade Village was eligible for the refinancing tool even while it is owned and operated by TCB and its affiliates because of AMHA’s ground lease and its investment in the construction. She said the refinancing program, which AMHA plans to use to make “significant capital improvements” at the apartments, is separate and distinct from TCB’s exit.

Swan said other discussions centered on restructuring debt. 

Hill, in his statement, said AMHA stepped into the discussions out of concern for residents because TCB raised the possibility of bankruptcy. He said Cascade Village needs an estimated $30 million in investment. While some money for rehabilitation is available, Hill said months of negotiations with lenders and others left a $7 million to $10 million gap, which is financially unsustainable for a public housing authority.

“Simply put, the numbers do not work,” Hill said in the statement. “As a public housing authority, we cannot and will not commit scarce public dollars to a transaction that would undermine our long-term ability to serve Akron residents and the broader community.”

Residents question management’s explanations

At a community meeting held the last week of January, Mitchell, the TCB CEO, told residents that AMHA was keeping the nonprofit from accessing funds that would help make improvements, Addie said.

“They told us they’ve been begging AMHA,” he said. “They’re just going to leave their partnership.”

But Hill pushed back on the idea that the two groups were ever partners. And he said claims that AMHA tried to push TCB out were false.

Residents weren’t buying it. Etayveia Butler, who has lived in Cascade Village for about six years, said Thursday she had been trying to get the information she needed from TCB to renew her AMHA housing voucher since last year. Management was unresponsive, she said.

At the same time, a light fixture that was broken was never replaced and mold in her house was not so much remediated as painted over.

“It’s a whole bunch of B.S.,” Butler said. “AMHA’s not paying us, so we’re quitting? I’m hearing you’re just worried about the money aspect of it.”

Receiver appointed to control Cascade Village

Hill said in the statement that litigation wasn’t the preferred path, but AMHA had an obligation to act.

“This is about people over profit — always,” he said.

Mitchell said in the statement that he was surprised and disappointed that the lawsuit had been filed but could not comment on specifics because the nonprofit had just received it.

In addition to seeking a receiver, the lawsuit seeks to terminate TCB’s leases. 

The Friday order from Rowlands, the judge, appointed John Hillyer as the receiver in an emergency motion. 

That action gives Hillyer the ability to evaluate the condition of Cascade Village, control and maintain the property and evaluate whether it is proper to sell the apartments to someone else.

Hillyer did not return a phone call Friday afternoon seeking comment. 

As receiver, he can appoint a new property manager and control Cascade Village’s finances as well as operate the property.

Swan, the TCB spokesperson, declined to comment on the receivership.

Addie, who lived in his mother’s Cascade Village apartment from 2012 until last March, said he hopes Hillyer’s role doesn’t mean TCB is off the hook for its mismanagement. He planned to spend time at the library making fliers to update residents, since he doesn’t know who else will.

“I just feel let down because none of the residents’ concerns really got addressed,” Addie said. “I feel like they’re owed a lawsuit from their neglect over the years.”