Harriet Tubman Development deal to close on Jan. 15

Harriet Tubman Development deal to close on Jan. 15

January 9th, 2014 by Yolanda Putman and Joy Lukachick Smith in Local Regional News

Vacant apartments are seen Tuesday at the former Harriet Tubman housing project on Roanoke Avenue.

Photo by John Rawlston /Times Free Press.

Betsy McCright is executive director of the Chattanooga Housing Authority.

Betsy McCright is executive director of the Chattanooga...

Photo by John Rawlston /Times Free Press.

Despite public opposition, the Chattanooga Housing Authority is expected to close on the sale of the city's second largest public housing site to Lakewood Realty Group on Jan. 15.

The $2.85 million purchase price for the Harriet Tubman Development will be paid in cash at closing by the Chicago-based firm, according to the purchase agreement between Lakewood and CHA.

CHA Director Betsy McCright said CHA has no formal proposal for how Lakewood plans to develop the land, a plan that trumped Chattanooga Mayor Andy Berke's idea to buy the 35-acre site for $1 million and redevelop it to attract business to the community.

"Once we sell it we really don't have any control over what they do with it," McCright said.

Yet last year, city officials said Lakewood was to spend an estimated $11 million to fix up the property, which was only one-third of what CHA believes is needed to bring the housing units up to federal standards.

Councilman Moses Freeman said he's still concerned whether Lakewood will offer quality and affordable housing for the community, but the decision is out of his hands.

"We're still concerned," he said. "Hopefully we can hold all of them responsible later on."

The East Chattanooga public housing site was operated since the 1950s by the Chattanooga Housing Authority for people with little to no income. But in 2012, CHA officials began moving residents away, saying the buildings had fallen below HUD standards for housing and CHA did not have the $30 million plus needed to restore them.

Now the housing agency has a signed contract and McCright said brokers for CHA have done their due diligence and found that Lakewood is a reputable company.

"We would not have ordered a contract if we didn't trust that they could do what they said they would do and basically close the deal," said McCright.

CHA awarded Lakewood the contract in late October in spite of opposition from the Chattanooga Area Chamber of Commerce, which supported Berke's idea, and East Chattanooga residents, who said that crime had decreased and the community improved since the development closed. The Chamber and some residents wanted the housing authority to sell the site to the city.

In August, the City Council gave Berke $3 million to purchase the former public housing site, demolish the buildings and resell the land to one of the nearly 40 employers currently bidding to open a manufacturing plant on one of the handful of available properties in the city.

But Berke withdrew the city's $1 million offer in October when, he said, he realized that the housing authority was going with the highest bidder. CHA said it could never explain to the U.S. Department of Housing and Urban Development why it turned down the $2.8 million offer for $1 million.

The Jan. 15 closing date with Lakewood comes about a month after the first scheduled closing, according to the purchase agreement. Lakewood asked for an extension to the 60-day agreement in November, but housing officials say they don't know why.

Several calls and emails sent last week and this week to Lakewood broker Barbara Szymanska's Chicago office were unanswered and the answering service no longer accepts messages.

In a previous interview, Lakewood officials said the company will renovate the buildings on the site for affordable housing.

The company proposes that half of the 440 units will be set aside for people who need subsidized housing. About 120 of them will be market-rate housing and 100 units will be for the elderly.

Szymanska previously earlier that her company developed seven other housing sites in and around Chicago before bidding on Tubman.

Contact staff writer Yolanda Putman at yputman@timesfreepress.com or 423-757-6431. Contact staff writer Joy Lukachick at jlukachick@timesfreepress.com or 423-757-6659.