Dusty Trails Apartments residents notified that a renovation crew would be arriving next week aren’t holding their breath.
Four years after improvements were outlined for the 27-year-old low-income apartment buildings, structural issues and at least one attempted sale of the building have stalled progress.
A Colorado housing developer’s negotiation to purchase and rehabilitate the apartments has left residents wondering when they have to move out, and whether or not they even need to. Tenants include elderly and those with disabilities.
“Honestly we don’t know if it’s going to happen at all because we still don’t have a closed sale,” Dusty Trails manager Marita Hartmann said this week. “They know there’s a chance that nothing will happen.”
Resident Rebecca Enos, 77, said she’s been hearing she might have to move because of upcoming renovations since she moved into the apartments more than five years ago. “As far as I know, they’ve tried to sell it and they get to a certain point and then, you know, it doesn’t happen.”
She said she’s unsure what to make of the latest announcement that a construction crew is coming to Haines during the first week of March. “I don’t know what it means,” Enos said. “I don’t know if they’re ready to pack us up or what.”
She said her kitchen and bathroom are an inch lower than the rest of her apartment, and her neighbor’s apartment is worse.
The negotiation, which would use federal low-income housing tax credits to incentivize the sale and rehab, is similar to a deal that fell through with a different developer in 2015. That deal failed after a Seattle-based affordable housing developer GMD Development and the U.S. Department of Agriculture Rural Development (USDARD) failed to reach an agreement on how to mitigate moisture issues in the crawlspace of one of one of Dusty Trails’ housing buildings, said GMD Development vice president Emily Thompson.
Thompson said the building hasn’t had any significant renovation or improvements since it was built. “As an aging building on an aging property, it is in need of renovation and improvement,” Thompson said. GMD planned to spend $3 million on the rehab.
“The biggest issue was the property was originally built on a boggy wetland,” Thompson said. “There was a lack of agreement with how to deal with water in crawl space. (The USDARD) did not give us approval to move forward in the time frame required by the funding and we had to return the tax credit to the Alaska Housing Finance Corporation. We were very disappointed and returning credits is not something we’ve ever done before.”
Former manager Sean Maidy managed Dusty Trails between 2013 and 2015, when two planned sales fell through, he said. “‘The remodel is coming in the spring’ is what they tell every manager,” Maidy said this week. “I would do my quarterly inspections, if there was something too major to fix, they’d say ‘Oh, we’ll take care of that in the spring.’”
Jim Studley, a real estate broker familiar with the 2015 project, said the engineering report at the time showed significant structural defects. “They had some real significant moisture problems in the crawl space area. The whole area is a giant swamp underneath there. You go down six or seven feet and you hit water. When you get moisture in the buildings, you can get rot and other issues.”
Colorado developer Scott Niblack of Cordes & Associates told the CVN this week that his company is working through the purchase and sales agreement with Dusty Trails’ current owner and its shareholders. The transaction requires compliance with the Alaska Housing and Financing Committee, USDARD and other entities. He wouldn’t comment further, but said he would have more information once they are closer to closing.
Marty Frantz, from Idaho, is listed as the owner on deed and who transferred the property to Haines Associates, an Idaho limited partnership. Frantz filed for bankruptcy in 2011, according to court documents. He told the CVN last week that although he’s still involved in the property, he’s “not technically” the owner anymore, but wouldn’t elaborate. He said Brad Elg is the owner. Elg is president of Northwest Regional Capital Corporation, the entity that manages the property. Frantz was unaware the renovation was upcoming. “We’re hoping to get it resolved and get something done (this) spring,” Frantz told the CVN last week.
Elg could not be reached by press time.
The Alaska Housing Finance Corporation administers the low-income housing tax credits in an effort to incentivize developers and investors to create and operate affordable housing. Developers receive federal income tax credits over a 10-year period in exchange for rehabilitating or constructing low-income housing. USDARD provides loans to developers who receive the tax credits.
Hartmann said the proposed plan is to move 18 residents at a time while crews renovate in phases. If the residents do move, the tenants will be given proper notice and the developer will pay for new housing, as required by law, while the units are renovated, Hartmann said.