The U.S. Court of Appeals yesterday upheld a court order that turned over control of the Clifton Terrace Apartments to the Department of Housing and Urban Development, and cleared the way for a foreclosure sale scheduled for 1:30 p.m. today.
The appeals court action followed a decision Monday by U.S. District Court Jusdge George L. Hart Jr. who denied a request by P.I. Properties Inc., owner and manager of the property, to postpone the sale. P.I. Properties is an arm of Pride Inc., a self-help organization which trains youths for jobs.
Hart, indicating concern over conditions at the project, also gave HUD immediate control of the 285-unit complex. Monday evening, at HUD's direction, six unarmed security guards were dispatched to the project, according to Larry H. Dale, director of housing for HUD's Washington area office.
Dale said the guards were sent to the project to make sure that no security problems arose while the buildings were under HUD's control.
In addition, Dale said, HUD has entered into negotiations with a management firm which is expected to take over the project on an emergency basis "as soon as possible."
The 200 tenants who now live at Clifton Terrace were given written notice of Judge Hart's decision on Monday night, Dale said. HUD staff members visited the project Monday and yesterday to make sure business records of the project - also under HUD's control - were secured, Dale said.
Clifton Terrace, which consists of three five-story buildings constructed in the early 1900s as one of Washington's first luxury apartment complexes, is now badly in need of repairs.Earlier this month, the city prosecutor's office filed criminal charges against P.I. Properties, and its president, Mary Treadwell, in connection with more than 300 violations at the property of city housing, fire and other regulations. Treadwell also is Pride's executive director.
P.I. Properties has owned the complex since June, 1975. It acquired the buildings for $820,000 after HUD foreclosed on its former owner.
Last June, HUD began the foreclosure action because it said P.I. Properties had mismanaged the project and owed more than $300,000 in mortgage payments and other debts.
Government officials contend that the decision to foreclose followed almost a year of negotiations with the management firm in an attempt to work out financial difficulties. These officials contend that the negotiations broke down when Treadwell refused to allow another management firm to take over the property.
In federal court Monday, P.I. Properties unsuccessfully tried to persuade the court to postpone the foreclosure sale, saying that HUD had backed down on promises to give the project the financial support it needed to meet its obligation, such as rent increases and postponement of debt payment.
In papers filed in the appellate court yesterday, P.I. Properties again argued that "HUD has never given [the firm] the support necessary to make the . . . project work, and so it has not worked."
The government responded however, that HUD's control of Clifton terrace "is critical to assure the well being of the tenants." Appeals Court Judges Edward A. Tamm and Malcolm R. Wileky upheld Hart's decision to turn the building over to HUD, and denied P.I. Properties request that Hart's order be postponed pending a full hearing in the appellate court.
HUD expects to be the only bidder on the property when it is put to auction today, government officials said. Meanwhile, yesterday at Clifton Terrace, there appeared to be some confusion over who was in charge of building operations.
A management official who asked not to be identified said the maintenance men were reluctant to work - or did not work at all - because they were not sure who was going to pay them.