Receiver Justin Heinly (left) answered City Council members questions about Governor’s Square, at a work session on Tuesday.
After years of setbacks, a plan to help turn things around at a neglected Harrisburg housing development is in the works.
City Council on Tuesday weighed entering an agreement with a local company that has been appointed by a Dauphin County judge to serve as receiver for the Residences at Governor’s Square. At the council work session, the appointed receiver shared his plans.
Justin Heinly of Midtown Asset Consulting was appointed in an order from a judge of the Dauphin County Court of Common Pleas on Tuesday, following a Friday hearing, according to city officials. As receiver, Heinly will work to bring the beleaguered affordable housing community back into a financially and physically stable position.
Uptown Partners, the owner of Governor’s Square, which is located near N. 5th and Maclay streets, filed for bankruptcy in May 2023. For years, the city issued code citations and condemned properties, and residents complained of quality-of-life issues in units. City officials have previously shared that over half of the 222 units have become vacant and the area has dealt with crime and safety issues.
After unsuccessful attempts to sell the property, and claiming not to have enough money to maintain it, Uptown Partners filed a motion to have a receiver appointed. Heinly said that city Solicitor Neil Grover approached him with the request to take on the project, and the city brought his name forward to the county judge. As receiver, Heinly will step in to control and oversee improvements at the property, while Uptown Partners remains the legal owner.
Heinly, who also serves as the owner of Harrisburg-based Midtown Property Management, shared his plan for Governor’s Square at council’s work session on Tuesday.
“Our mission in our affiliate business is to manage properties with integrity and respect for our tenants, our owners and our community. And this aligns with who we are as a company and as members of our community,” Heinly said.
In March, council approved allocating $250,000 as seed money to help the receiver get started with work at Governor’s Square. According to the resolution, the city will pay the receiver portions of that money monthly and will expect to be reimbursed as money becomes available through rent revenue.
Heinly shared that his plan for Governor’s Square would span 10 years and three phases. The first phase would include securing the property and spending six months evaluating the need and creating a restoration budget and plan. In phase two, the receiver would begin implementing the plan and working to get the property to financial stability, which could take two years. The final phase would focus on seeking grants and funding to make capital improvements, Heinly shared.
His first priority—visiting each occupied unit, making sure residents are safe, and relocating any tenants whose property is not livable.
“Each resident that’s up there, if they’re listening tonight, they are going to have a home,” he said.
As of now, the current property management company, Winn Residential, will continue rent collection and maintenance while Heinly reviews their contract.
The current monthly rent roll at Governor’s Square is $46,382, of which only about $39,000 is being collected. In total, there is $838,000 in delinquent rent payments, Heinly said.
Council members asked Heinly many questions, several voicing concern that the city would get its investment back.
“I’m just concerned about this project, I mean, we definitely know that we need it done […] but financially, this is a huge task,” said council member Lamont Jones.
Heinly assured council that, as money begins flowing into the property, the city will be repaid. He also noted that he would seek county and state grant funding for support.
“This is going to be a very long, very arduous task, but I am confident that we will be successful,” he said. “I am confident the city will get repaid. I am confident that the city residents are going to be served in this evolution, but we just need time.”
Council members also asked about Governor’s Square’s affordable designation by the U.S. Department of Housing and Urban Development (HUD). The requirement that the property remain affordable is part of the property deed. Heinly said that he believes that lasts for at least 10 more years, and that he would seek to get that extended.
“I have no intention of this going market rate,” he said.
While council members had concerns, most agreed with the need for action and did not object to Heinly as receiver.
“Some of those properties are beyond repairable,” council member Ralph Rodriguez said. “Some of those homes don’t even have the complete bricks on the outside […] It’s much more than an organization or a company taking this process and these hurdles and just jumping through it as a receiver. There’s a lot of families involved and people that depend on that […] I hate to say this, but you’re kind of the savior at this point.”
The resolution will be on council’s next legislative agenda for a vote.
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