Somehow, five hours of testimony about two neglected apartment complexes had no effect on Hamilton County Chancellor Jeff Atherton’s energy level.
“I can’t have kids running around with electrical wires hanging off the wall!” he shouted, eyebrows-up, at an image of Mountain Brook Apartments in Chattanooga.
“And there’s a hole in the side of this building!” he said, holding up a picture of Red Bank’s Ridgemont Apartments. “How can you excuse that? I could go on.”
That wasn’t necessary after building inspectors, firefighters and a Tennessee American Water representative testified about mold outbreaks, broken fire hydrants and eight separate water cutoffs.
“It’s probably luck that there hasn’t been a fire or serious accident on one of these properties,” said John Lewis, an attorney representing Bank of America, the trustee in a loan package for the owners.
Despite it all, Atherton reluctantly appointed Nashville-based Freeman Webb Cos. to manage the two properties, because future mold litigation would become the new operator’s responsibility.
But Patrick Phelan, one of the two Syracuse, N.Y.-based property owners, made an emotional plea to keep the complexes, saying he was distressed “almost to the point of tears” for his inability to pay the bills on time.
“The water will never be turned off again,” he said. “I assure you.”
Dan Ford, the director of property management for Freeman Webb, estimated that each complex would require between $500,000 and $1 million in repairs ranging from “significant” mold elimination to roofing problems and wood rot.
“I can honestly tell you I never thought it was this extensive,” Phelan said after Red Bank Public Works Director Wayne Hamill described about 30 pictures of decay.
A few minutes later Phelan said Ford’s $500,000 repair estimate was “overkill” and said he had about $180,000 available for immediate improvements.
Before his testimony, Phelan told a reporter he avoided a similar hearing three weeks ago for his other area asset, Red Bank’s Cambridge Park Apartments, because his “financial situation was underwater.”
Defense attorney John McDougal argued that two warning letters sent from Red Bank lacked urgency and signatures. He also blamed various property managers for a failure to communicate with Phelan and his business partner, John Gosnell.
“If I had in fact known about the issues, we wouldn’t be here now,” Phelan said.
At the Cambridge Park hearing, property manager Andy Williams said he constantly tried to contact Phelan and Gosnell about late water bills without success.
Contact Chris Carroll at ccarroll@timesfreepress.com or 423-757-6610.