Photo by Dani Fresh
A blighted and bankrupt affordable housing development in Harrisburg may soon be under new ownership.
Uptown Partners, the owner of the Residences at Governor’s Square, has identified a potential buyer for its 200-plus rental units.
According to court documents filed late last week, the owner identified New Jersey-based real estate company ANCDI as the proposed buyer. The company made an offer of $9.6 million at a Jan. 10 auction.
Uptown Partners filed for Chapter 11 bankruptcy and, for months, has sought out a buyer for the beleaguered properties in the area near Maclay Street and N. 5th Street, which have received hundreds of city code citations and condemnations over the past several years.
ANCDI’s bid would also include payment of all real taxes, payments in lien of real estate taxes, water, trash and sewer bills and payment of a 5% buyer’s premium.
The buyer would also assume about $8.9 million in debt from a loan that was awarded to the owner from the U.S Department of Housing and Urban Development, through the Harrisburg Redevelopment Authority.
ANCDI provided proof of funds to close and proof of additional funds to renovate, repair and make improvements at Governor’s Square, according to the documents.
While Hilco Real Estate Sales, which was employed by Uptown Partners to find a buyer, initially received five offers for the property, only three made bids during the auction. In addition to ANCDI, 2087 Market Street LLC offered $9.5 million for Governor’s Square and Woda Cooper Companies, an Ohio-based affordable housing provider, offered $9.1 million.
2087 Market Street LLC was selected as the backup buyer.
Neither ANCDI nor 2087 Market Street LLC could be immediately reached for comment.
On Tuesday, an attorney with the Community Justice Project, a nonprofit legal assistance firm for low-income residents, filed an objection to the sale motion, on behalf of three people, Monique Bryant, Anita Hall and Deborah Taylor, two of whom hold tenant leases at Governor’s Square.
In the filing, they objected to the language in the motion that states that the property should be sold “free and clear of all liens, claims, encumbrances and other interests.” This wording, the filing says, may allow the property to be sold free of and violate restrictive covenants that currently require the units to remain affordable. The objection also states that the language may allow Governor’s Square to be sold free of current tenant leases.
The objectors also oppose the sale to ANCDI, stating that the company “has no HUD property subsidized housing experience whatsoever.”
However, according to a narrative by ANCDI owner Charles Howard, which was attached to the objection documents, the company has “decades of experience” working with tenants with housing choice vouchers.
He also stated in the document, signed on Nov. 28, that there is no plan to change existing use, requiring any changes to deed restrictions.
Howard also explained in the narrative that ANCDI would own and operate Governor’s Square and would not use a third-party management company.
“I look forward to working with you and building a neighborhood worthy of the name Governor’s Square,” he said in the document. “I believe the public investments on 6th Street can be matched with our private investment and sweat equity building a fantastic future for Harrisburg.”
Uptown Partners also previously filed a motion to sell four of its units to Homeland Center in Harrisburg. The center, located on N. 6th Street would obtain four units near its building on the 500-block of Peffer Street. According to a previous filing, Homeland was given a right of first refusal to purchase the properties for $1 as part of a tri-party agreement formed with Uptown Partners and the Redevelopment Authority in 2006.
A final bankruptcy court hearing to approve a buyer is slated for Jan. 30 in the in U.S. Bankruptcy Court for the Middle District of Pennsylvania.
According to the court documents, closing on the sale within 20 days of the Jan. 19 filing.
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