The District government has asked a judge to order the sale of a troubled Southeast Washington apartment complex that has become a mayoral campaign flash point, alleging Monday that a prominent political activist “grossly mismanaged” the property to the point that it owes $700,000 to the city and $560,000 in utility bills.
Conditions at the Park Southern Apartments have deteriorated to the point that “even a minimal renovation would cost millions of dollars,” the city’s lawyers said in Monday’s filing in D.C. Superior Court. They argued that a court-supervised sale from a tenant-run nonprofit corporation to a new owner is the best way to bring about improvements.
A letter from the city that was distributed Monday to the building’s more than 700 low-income tenants says such a sale “is necessary to pay off the outstanding debts of [the nonprofit owner], provide funds to repair the building, and provide new ownership that will stabilize the finances and bolster day-to-day operations going forward.”
The missive included assurances to tenants: “We will require that a new owner preserves affordability, upgrades the physical condition of the Property, and fosters a community structure that includes resident participation.”
Park Southern has been under close scrutiny in recent weeks because of the ties between the nonprofit’s president, the Rev. Rowena Joyce Scott, and city officials, including Mayor Vincent C. Gray (D) and the Democratic nominee to succeed him, D.C. Council member Muriel Bowser (Ward 4).
In an interview Monday, Scott characterized the city’s petition as a ploy to sell the building to a management company installed at Park Southern this year at the city’s request. Accusations about her mismanagement of the property are rooted in politics, not reality, she said.
Scott, a former president of the Ward 8 Democrats, a political organization, supported Gray in his 2010 election bid but changed her allegiance to Bowser in this year’s primary campaign. While the Park Southern nonprofit corporation fell further and further behind on its loan obligations to the city, the Gray administration did not move to place the loan in default until the day after the primary, in which Bowser defeated Gray.
Besides Scott, Bowser also counts among her supporters Phinis Jones, who briefly managed the property this year before it was taken over by the city. He has attempted to buy the building in partnership with Scott for $3.7 million — a price the city’s filing says is less than half of its fair-market value.
Scott said Monday that she and Jones are willing to revise the terms of their purchase offer but that the city is refusing to entertain any negotiations. “They’re not trying to work with us at all,” she said. “The mayor wants me humiliated and embarrassed.”
Donald Temple, an attorney for Jones, said he did not believe the city could dictate the terms under which the nonprofit sells the building but said his client has prepared an “extremely competitive” revised offer.
The city is seeking to intervene in a lawsuit filed in April by a tenants’ group against Scott and the nonprofit corporation she leads. The new filing lays out numerous allegations of “gross mismanagement and neglect,” arguing that under better management the complex could generate enough revenue to cover its expenses.
Among the misdeeds alleged in the filing are a failure to collect back rent, the improper expenditure of nearly $130,000 in tenant security deposits that the city says should have been held in escrow, and the flouting of election procedures to allow Scott to “stack the Board with her friends and relatives.” A hearing in the case is set for Aug. 29.
Bowser has denied acting to favor Scott or Jones and has asked the District’s inspector general to investigate the matter. However, she has resisted calls from the Gray administration and fellow mayoral candidate and council member David A. Catania (I-At Large) to hold a public hearing of her council committee, which oversees housing matters.
Spokesmen for Bowser’s campaign and council office did not respond Monday to requests for comment on the city’s filing.
Scott on Monday made her own call for an investigation — into the relationship between the management firm installed by the city and officials at the D.C. Department of Housing and Community Development, the agency which administered the $3.1 million loan to Park Southern.