A U.S. judge yesterday gave the U.S. Department of Housing and Urban Development immediate control over the troubled Clifton Terrace apartments and refused to stop a foreclosure sale scheduled for Wednesday.
The decision by U.S. District Judge George L. Hart, Jr. means that HUD can move immediately to find new management for the 285-unit complex, which was owned and operated by P.I. Properties Inc., an affiliate of Pride, Inc., government attorneys said.
When he announced his decision after an hour-long hearing yesterday, Hart noted that city officials had found more than 300 violations of city housing, fire, zoning and licensing regulations at the project at 14th and Clifton streets NW.
The tenants are entitled to "decent and sanitary housing," Hart said, but "many are living in a pigpen."
Hart also noted that P.I. Properties is in "deep default" in connection with more than $300,000 in mortgage payments and other unpaid bills owed to HUD.
Clifton Terrace, composed of three five-story apartment buildings, was one of the nation's first major inner city rehabilitation projects. P.I. Properties acquired the project in June 1975 for $820,000 after HUD foreclosed on its former owner.
HUD moved to foreclose on PI Properties in June, citing mismanagement at the project and the delinquent mortgage payments.
P.I. Properties then asked Hart to issue a court order to stop the foreclosure sale because, it contended, HUD did not allow rent increases and would not postpone debt payments so that P.I. properties could meet its financial obligations.
Michael S. Schooler, an attorney for the management company, argued yesterday that the government also denied his client its contitutional right to a full hearing on the matter, and contended as well that the government acted arbitrarily when it decided to foreclose.
Justice Department attorney Maryann Clifford, representing HUD, told Hart that the government had been meeting with the management firm for more than a year in connection with management and financial problems.
HUD officials have said that negotiations broke down when Pride executive director Mary Treadwell - who also is president of P.I. Properties - backed out of an agreement to have another management firm take over the project.
Government attorney Clifford noted that P.I. Properties made only four mortgage payments in the three years that it has held ownership of the properties. She said the management firm also had failed to keep proper books and records on the project.
Clifford told Hart that Clifton Terrace tenants, complaining about "gross mismanagement" at the project, repeatedly have asked HUD to take the foreclosure action. Tenants have joined with HUD in opposing P. I. Properties' request to delay the foreclosure sale.
Lynn Cunningham, an attorney from Neighborhood Legal Services who represented the tenants, told Hart he wanted to "stress in desperation the tenants feel in urging the court not to prevent the foreclosure sale."
At that point, Hart noted that in 1922, his own family had lived in the project, constructed in 1916 as the largest luxury apartment complex in Washington.
"I suspect conditions have changed" since the, Cunningham told Hart.