$11 million question: Is that enough to fix Tubman site in Chattanooga?

$11 million question: Is that enough to fix Tubman site in Chattanooga?

October 22nd, 2013 by Yolanda Putman in Local Regional News


• What: Chattanooga Housing Authority board meeting

• When: 12:30 p.m. today

• Where: 801 N. Holtzclaw Ave.

The Chattanooga Housing Authority has estimated that $30 million would be needed to bring the Harriet Tubman public housing site up to standards. The Chicago-based Lakewood Realty Group that wants to buy the vacant buildings plans to invest about one-third of that amount in improvements.

And that is raising questions about the purchase and Lakewood's blueprint for the property.

"We see it as inadequate," City Council Chairman Yusuf Hakeem said about the approximately $11 million that Lakewood intends to spend on the building beyond the purchase price. "When you look at the plumbing, the electrical and all of those kinds of things, we question if that's adequate to have quality affordable housing."

The housing authority board is scheduled to vote today on whether it will sell the Tubman site to Lakewood. CHA staff will recommend that the board approve the company's offer to purchase the 36-acre site for $2.8 million.

"The bottom line is that it's time for the board to make a decision," said Betsy McCright, CHA's executive director. "We have got seven offers at this point. This offer appears to be very viable, a very interested buyer. So we plan to present it and recommend that the board vote."

The housing authority wants to move forward with the sale because the expense of maintaining the property is accumulating. Tubman has been vacant for about a year. It is costing about $200,000 to $300,000 a year just to keep the lawn and maintain security, said Naveed Minhas, CHA's vice president of development.

Lakewood, too, wants a quick closing to secure the property before winter and prevent more damage to the buildings, according to CHA's resolution about the site.

However, the People's Coalition for Affordable Housing, a group made up of former Tubman residents, people concerned about affordable housing and Chattanooga Organized for Action, said decisions are being made too quickly and without public input.

A boarded-up window is seen at the site of the former Harriet Tubman Homes being offered for sale by the Chattanooga Housing Authority. One of the contenders for the site is a Chicago-based development company that proposes to put Section 8 and market rate housing on the site, and about 100 units of housing for seniors.

A boarded-up window is seen at the site...

Photo by John Rawlston /Times Free Press.

"There's a sense of disappointment that the housing authority would make the decision without having Lakewood come and show the community what it wants to do. The community has questions," said Perrin Lance, coalition spokesman and co-founder of Chattanooga Organized for Action, a nonprofit organization that advocates for social justice.

Lakewood's plan is to spend about $7,000 on each of the 440 units in a two-phase approach, McCright said. In the first phase, Lakewood plans to spend almost $3 million to fix the roofs. Then in phase 2, more than $8 million will be spent to rehab the interiors.

But $11 million is a far cry from the predicted $30 million that CHA said was needed for repairs, city officials said.

McCright explained that the $30 million would be necessary to bring the units up to U.S. Department of Housing and Urban Development standards because HUD wants renovations to last 40 years, but a private developer would not be held to that standard.

If the board approves the resolution to sell to Lakewood, McCright will sign a contract for the board's approval, and then Lakewood would have a 15-day due diligence period. There's a 60-day window for closing.

Barbara Szymanska, a Lakewood broker, discussed the company's plan for Tubman in a phone interview from Chicago.

"We are going to make it beautiful," she said.

Szymanska isn't expected to attend today's board meeting.

Her initial plans for the site call for making half of the units government-subsidized (Housing Choice voucher) rental housing, about 120 of them market-rate rentals and 100 of them dedicated to the elderly.

It was about three weeks ago that CHA and Chattanooga Mayor Andy Berke were unable to come to terms that would have allowed the city to buy the property. Berke bid $1 million for the site, but withdrew the offer after CHA officials said they needed at least $2.4 million to meet what HUD said the property was worth.

Hakeem and Councilman Moses Freeman were among city officials who said they preferred the mayor's plan for the site, which called for the buildings to be demolished and the land to be used for industry to create jobs.

As late as Friday, Hakeem said, he and Freeman were trying to find a way for the city to make the housing authority another offer, but they were unsuccessful.

Freeman said he is disappointed that the housing authority is willing to allow the site to be reopened for housing after they closed it stating it was too costly to maintain and upgrade. He is also concerned that if housing returns, so will crime. He said if the land was used for industry and people got jobs, then they would be able to find housing.

"I hope I'm wrong," Freeman said, "But I feel it in my gut that this is not the right place for housing. ... I don't believe a private developer will put the money in it needed to make it work."

Contact staff writer Yolanda Putman at yputman@timesfreepress.com or 423-757-6431.