Governor’s Square apartments near Maclay Street in Harrisburg
A blighted, bankrupt affordable housing development in Harrisburg is struggling to secure a new buyer.
The Residences at Governor’s Square, owned by Uptown Partners LLC, has several bidders and interested parties for its 200-plus-unit apartment complex, but none have yet received required federal approvals, Uptown Partners’ attorney said during a court hearing on Tuesday in the U.S. Bankruptcy Court for the Middle District of Pennsylvania.
Uptown Partners filed for Chapter 11 bankruptcy in August 2023 and has since sought a buyer for its properties, which have hundreds of code citations and condemnations and have long struggled with safety and quality of life issues for residents.
In January, the owner identified New Jersey-based real estate company ANCDI as the proposed buyer with an offer of $9.6 million, submitted through an auction. Additionally, 2087 Market Street LLC offered $9.5 million and Woda Cooper Companies, an Ohio-based affordable housing provider, offered $9.1 million.
However, the sale is still pending as none of the bidders have received federal U.S. Department of Housing and Urban Development (HUD) approval, which is required in order for the buyer to operate the affordable housing complex.
At a hearing in April, Uptown Partners’ attorney Robert Chernicoff explained that 2087 Market Street LLC moved into the top position as a buyer, being the only company working actively with Uptown Partners and HUD. However, on Tuesday, Chernicoff said that HUD has not yet received all required documents from any of the potential buyers.
The hearing to determine a buyer for Governor’s Square was continued to Sept. 10.
Chernicoff also noted that there are now two new interested buyers, but declined to say who they are.
If no progress is made with the current bidders, Chernicoff said that he would need to get the court’s approval to consider other interested parties, possibly through holding another auction.
Additionally, on Tuesday, Bankruptcy Chief Judge Henry Van Eck heard from an attorney for Landex Management, the property manager for Governor’s Square, who filed a motion to terminate Landex’s contract with Uptown Partners.
Attorney Barry Solodky argued that Landex does not have sufficient funds to provide its property management services, as Governor’s Square apartments are at about a 55% occupancy rate and most are in need of significant repairs.
“There are no longer sufficient resources available to deliver the kind of housing that the people who remain at Governor’s Square deserve,” said Ed Cafasso, a spokesperson for Landex.
Van Eck said that Landex needs to prove that remaining in contract with Uptown Partners is causing the company harm and opening it up to potential liability for him to even consider granting the termination. He continued the matter to the Sept. 10 hearing, as well.
If the judge rules that Landex is allowed to be removed from the contract, it would effectively close the case and force Governor’s Square to close down, as there would be no property management for the complex, Chernicoff explained.
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