* $1.25 million: Spent since fire
* $1.7 million: Estimated cost to refurbish building
* $500,000: Amount not covered by insurance
Source: GHC Housing Partners
In a rare move, California real estate mogul Greg Perlman released a letter today apologizing for the actions of his company, PK Management, which oversees the troubled Patten Towers project in downtown Chattanooga.
Perlman promised to deal with the laundry list of problems uncovered in the aftermath of a fire that rendered Patten Towers' 241 residents homeless for a month, and pledged to spend as much as $1.75 million to improve the 100-year-old former hotel.
"Time to determine what we did wrong, and what we can learn in order to become a better citizen of Chattanooga," Perlman wrote.
Perlman and his associates previously have declined to discuss the disaster with the public, and the company refused to allow reporters to see the interior of the 100-year-old building after the May 28 blaze.
But in hindsight, that may not have been the best approach, Perlman admitted.
"Looking back, there are aspects of the situation we should have handled differently, and for that we are truly sorry," Perlman wrote. "While we were in constant communication with the Department of Housing and Urban Development, we should have communicated more frequently with local leaders and the public. We thought putting our head down and fixing the problem was the best way to move forward. We were wrong."
Residents welcomed the apology and are delighted that Perlman intends to fix up the structure, though some said they're reserving judgment until the elevators, air-conditioning and fire alarms are fully functional.
"I believe them," said Robert Bonds Jr., a resident of three years.
But Henry Donahue, a two-year resident, says he's not too sure.
"They say one thing and do two or three other things," Donahue said. "I'll believe them when I see it."
Perlman's letter follows weeks of withering criticism from Chattanooga Mayor Andy Berke, state regulators and from the disaster relief agencies that housed residents in emergency shelters for six nights before Perlman's company began to take over.
Perlman last week laid out a plan to improve the building beyond what is required, saying that he is even thinking about bringing outside tenants into its long-vacant commercial spaces.
"I've targeted a minimum of 75 units that are going to get new carpet, and 120 that get paint," he said. "Come end of November, we'd definitely like to have a re-grand opening of Patten Towers."
But Perlman also defended some aspects of PK Management's response. The company completed its work within one month instead of the two months initially projected, and brought financial and human resources to bear that most Section 8 property management companies simply don't have, he said.
"We had no idea of the scope of this when this happened; we thought maybe a couple days to fix a panel," Perlman said in a a phone interview with the Times Free Press. "This was almost like a natural disaster."
In fact, the scope of emergency aid rendered by the Red Cross, Salvation Army and various other agencies nearly matched the relief efforts required in the aftermath of Hurricane Katrina, emergency officials said.
In the early days of the disaster, PK Management's only message to residents -- communicated through a lower-level employee -- was that the rent was still due, and that all mail would be held at the post office.
Such a message, delivered to groups of elderly and disabled residents living in a basketball gym, appeared out-of-touch and callous to Chattanooga's political and emergency aid officials, who privately seethed at the lack of empathy in the face of such human suffering.
Only later did company officials seem to grasp the severity of the humanitarian issue. In the meantime, emergency organizations spent more than $80,000 on beds, blankets, meals and security at the East Brainerd Church of Christ and the Brainerd Recreation Center.
Perlman said the lack of leadership initially was partly because of the illness and absence of Brenda Jones, vice president for PK Management's southern division, Perlman said. That forced Jenee McClain-Bankhead, vice president for the northern division, to step into an unfamiliar situation regarding an unfamiliar building.
PK Management also brought in 40 social workers to help residents adjust to the confusing world of being semi-homeless.
"If we were the previous landlord, one guy and bookkeeper, there would have been nothing, because they didn't have the resources we have," Perlman said. "Under the circumstances, I think that we had done a better job than was portrayed."
The company eventually placed residents into area hotels while contractors repaired the fire damage and a bevy of safety and health issues revealed by a post-fire inspection.
PK Management has also begun to comply with state regulations, turning in required reports to the Tennessee Housing Development Agency and preparing for a planned October safety inspection by HUD.
Perlman has called the mayor in an attempt to speak with him about the company's response, but that conversation has not yet occured, said a Berke spokeswoman.
Staff writer Yolanda Putman contributed to this report.
Contact staff writer Ellis Smith at email@example.com or 423-757-6315.