After years of litigation, negotiation, and frustration, the rundown partially demolished, partially vacant Sky Tower apartment complex in far Southeast Washington yesterday became the property of the District of Columbia government under an unusual loan arrangement.
The U.S. Department of Housing and Urban Development, which foreclosed on the 91-unit complex in 1972, transferred Sky Tower to the city government yesterday. HUD will ensure a $2.2 million mortgage loan to the city and provide rental subsidies for all tenants, HUD and city housing officials said.
Yesterday's action means the 35 low-income tenant families who have fought to remain at their low-rent complex, located at Wheeler Road and Wahler Place SE, may finally see positive results of their struggle.
The agreement also means that apartments may soon be available for some of the thousands of tenants in the city who need large apartments. Some of Sky Tower's apartments are six-bedroom units.
Tenants as Sky Tower interviewed this week complained that their complex has been plagued for years with flooded bathrooms, cracked ceilings, exposed electrical wiring, peeling paint, leaky light fixtures and rats in radiators.
The District obtained the $2 million below market-rate interest loan to renovate Sky Tower from Perpetual Federal Savings and Loan Association, with the help of Walker and Dunlop, according to Sal Cicero, acting assistant chief of neighborhood preservation for the city's Department of Housing and Community Development.
Cicero estimated that rehabilitation would be completed in less than a year. The families who live at Sky Tower probably will be relocated to the first building that is renovated, he said. Some former tenants also will be allowed to move back to Sky Tower if they wish to do so, he said. Three of the complex's 10 buildings are vacant.
Stuart Malmon, attorney adviser in the HUD area office, said the federal agency is committed to provide up to $463,380 a year in rental subsidies. The rental program is one that allows tenants to pay no more than one-fourth of their income in rent. Malmon also said that the city may eventually have to pay $139,000 to HUD for purchase of the complex, depending on how much rehabilitation costs run.
Sky Tower, a complex of three-story red brick building located near many public housing projects and some new townhouses recently constructed in Southeast has been the focus of controversy for years. HUD forecolsed on the project in 1972, after the Housing Development Corp., a nonprofit corporation, fell behind in its federally-insured mortgage payments.
After HUD foreclosed on the property, some of the buildings at Sky Tower were razed, despite the fact that more than $2 million already had been spent on renovation. HUD planned to demolish the rest of the complex, but in January 1975 a federal judge forbade them to do so and ordered them to fix up the remaining structures, and, later to move evicted tenants back into the complex.
HUD and the District government have been working on a possible takeover of the complex by the city for years. In December 1976, the two governments agreed to a sale, negotiations over the exact arrangement took more than a year and a half.