As a result of incorrect information provided by the Department of Housing and Urban Development, an article published in last week's Real Estate section incorrectly identified the D.C. Development Corp. as the owner of the Clifton Terrace apartments that defaulted on the project mortgage in 1973. The owner of the project at that time was the Housing Development Corp., according to a HUD official. The D.C. Development Corp. never owned the project, the official said. CAPTION: Picture, Clifton Terrace Apartments, which may be sold for $4.1 million under stipulations that it be renovated and maintained as low-income housing; by Fred Sweets -- The Washington Post
Ownership of the Clifton Terrace Apartments in Northwest Washington is about to change hands for the fourth time in the last 10 years, this time to a Raleigh, N.C., housing development and management firm.
The Department of Housing and Urban Development has offered to sell the project to George F. Marshall Inc. for $4.1 million. The firm will be required to repair the project and to maintain it as low-income rental housing for 15 years.
Marshall outbid two other potential purchasers. HUD opened the bids for the project on April 20. The firm has until May 27 to close on the sale of the project, according to HUD. A company spokesman said the firm intends to accept HUD's offer and close the deal by that date.
HUD's assistant secretary for housing, Philip Abrams, said the sale will end a decade of problems that have made the project a thorn in the department's side.
HUD acquired the 285-unit project on Clifton Street in 1973, after the nonprofit D.C. Development Corp. defaulted on its federally insured mortgage. HUD sold the project to P.I. Properties, a spinoff of Youth Pride Inc., but acquired it again in 1978 amid charges that P.I. Properties had mismanaged the project and misappropriated funds.
"We are delighted with the amount of the bid and the fact that we are now able to require the new owner to bring the property up to our housing quality standards," Abrams said.
"With private management of the project, we're sure the tenants will have better living conditions," Abrams said. Privte ownership will result in physical and management improvements such as improved security, he said.
HUD offered the tenants of the project a chance to buy it for conversion to a cooperative, but decided to auction the project publicly after the tenants missed a deadline for putting up a deposit.
Representatives of the tenants association have charged that HUD did not give them enough time to make an offer to buy the project. They said HUD allowed Clifton Terrace to deteriorate after deciding to sell all HUD-owned projects as is, rather than repairing them before sale.
Clifton Terrace Tenants Association President Patricia Smith criticized HUD for neglecting the tenants' interest in the sale. "No one ever asked how we felt about this," she said. "There was no concern whatsoever for our well-being."
But Smith is optimistic that the Marshall firm can deal with the project's physical and social problems in cooperation with the tenants. "Surprisingly enough, these people sound promising," she said. "They have expressed sympathy for our needs, our living conditions and the problems of a high-density environment."
Abrams contended that the department gave the tenants adequate time to buy the project. "It's not fair to say we didn't give them an opportunity," Abrams said. "We delayed the sale almost a year while we gave them a chance to form a cooperative."
Abrams conceded that the project has suffered "a substantial amount of neglect" under federal ownership, but said none of its defects is of an emergency nature.
Under the terms of the sale, George F. Marshall Inc. will have to make repairs that HUD estimates will cost $808,000. HUD is granting the firm a purchase money mortgage of $3.2 million at an 8 percent interest rate. The balance of the $4.1 million sales price will be paid in cash at closing.
All 285 units in the project will be subsidized under the Section 8 housing assistance programs, which allows eligible tenants to pay between 25 and 30 percent of their income for rent.
A little more than three-quarters of the apartments at Clifton Terrace are occupied. A HUD area office official said almost all the tenants will qualify for the Section 8 assistance.
The official said that the Marshall firm is a developer, owner and manager of subsidized housing projects in North Carolina and that the firm owns no other projects in the Washington area.