P.I. Properties Inc., the real estate arm of Pride Inc., charged in a suit filed yesterday that the Clifton Terrace Apartments is fraught with problems because of a lack of support from the U.S. Department of Housing and Urban Development, not because of P.I. Properties' own handling or the complex.
The suit, filed in U.S. District Court in Washington, asks for a preliminary injunction to stop HUD's foreclosure proceedings on the 285-unit complex at 14th and Clifton Streets NW.
Clifton Terrace, an apartment complex for low-income persons, was scheduled to be sold at a foreclosure auction yesterday afternoon. But auctioneer Charles J. Kay announced that HUD had asked that the sale be postponed until Aug. 14.
Marily Melkonian, HUD's deputy assistant secretary for insured and direct loan programs, said yesterday that HUD asked for the postponment because of P.I. Properties' suit. Melkonian said a date for a preliminary hearing on the request for the injunction should be set soon.
In its suit, P.I. Properties contends that HUD failed to provide necessary financial support for Clifton Terrace, and that rehabilitation works on the project done before P.I. Properties acquired it was performed incompetently in many cases, fraudulently in some cases, and not at all in others."
HUD was required to file notice of a foreclosure sale under District regulations governing foreclosures. Many tenants who saw the notice were afraid that it meant their apartments might be turned over to affluent tenants if the buildings were bought by a private firm.
In a letter to D.C. City Councilman David A. Clarke (D-Ward One), whose ward includes Clifton Terrance, HUD Secretary Patricia Roberts Harris wrote that HUD "does not anticipate" the project being out of the reach of low and moderate-income persons.
"Historically, the Department has proven to be the sucessful bidder in virtually 100 percent of all foreclosures it has initiated. We have no reason to believe that Clifton Terrace apartments will be an exception to our past experience," the letter said.