The owners of Parkside Village Apartments are responsible for securing it so it doesn’t become a neighborhood nuisance while it’s vacated this summer.

But city of Waco officials aren’t holding their collective breaths.

The city is seeking bids next week to board up vacant units at the complex in case the owners fail to do it themselves.

The U.S. Department of Housing and Urban Development will sever its low-income Section 8 contract with Parkside Village on July 1.
Rod Aydelotte/Waco Tribune-Herald, file

The U.S. Department of Housing and Urban Development will sever its low-income Section 8 contract with Parkside Village on July 1 and give rental vouchers to relocate the estimated 152 households who live there.

Waco Housing Authority officials are already working with the residents to find new housing and expect to finish the relocations in two or three months.

Waco officials said the apartments need to be boarded up while they’re vacated to keep Parkside’s longstanding crime problem from growing worse. They said the 50 or so already-vacant units also need to be boarded up.

If the city does the work, it will bill the owners and place a lien on the property for payment if necessary, City Attorney Leah Hayes said.

“When you have less occupied units, you have more opportunity for people to use those units for criminal purposes,” Hayes said. “Experience tells us that vacant housing complexes are hotbeds for criminal activities.”

The property owner, Parkside Village Ltd., is headed by American Housing Foundation, a nonprofit group that declared bankruptcy last year and faces hundreds of millions of dollars in claims from creditors.

The partnership lost its federal housing contract for Parkside because it has failed to keep the property up to HUD standards for the past three years.

The partnership has defaulted on its federally insured mortgage, forcing HUD to pay it off. HUD is expected to foreclose on the property later this year and seek early next year to find a new owner.

American Housing Foundation officials declined comment for this story.

In past interviews they have said they were unwilling to invest more in the money-losing apartments but would not simply walk away from them.

Neighborhood doubts

Robert Jackson, president of the Brook Oaks Neighborhood Association, said he doubts Parkside’s owners have the means to secure it.

“If you don’t have the money to keep the facility going, you certainly don’t have the money to board it up,” he said. “From the neighborhood association standpoint, we’re real worried about what’s going to happen.”

Now that HUD has decided to terminate Parkside’s subsidy, the agency has lost much of its leverage over the owners, said Mike Backman, HUD’s regional multifamily hub director.

“We’re not a code enforcement agency,” he said. “With (the contract) going away, it’s going to be a privately owned property.”

Fears and concerns

He said he understands neighbors’ fears about the vacant property.

“That’s a concern we all have,” Backman said. ”This is a large property that’s going to be significantly vacant.”

Nonetheless, he said Parkside’s existing escrow accounts for operations and maintenance can be used to pay for utilities and security during this summer’s move-out period. That escrow is estimated to be around $70,000.

The faster the residents can be moved out, the lower the utility bills would be and the more money would be available for securing the property, Backman said.

Waco Housing Authority executive director Gary Moore said more than 130 of the 152 families at Parkside are already in the application process for new housing.

Most could receive their housing vouchers by Friday, but the authority will have to inspect the rental housing before the tenants can move in. Completing all the inspections could take two or three months, Moore said.

If HUD forecloses on the Parkside property, the title to the property and the duty to maintain it will remain with Parkside Village Ltd., Backman said.

“This is not a property owned by HUD, and at no point in the future will the property be owned by HUD,” he said.

HUD would give the city of Waco right of first refusal to buy the property before it goes to an open sale.

Moore of Waco Housing Authority said he would like to see Parkside Village razed and replaced with market-rate, mixed-income housing. He said the property suffers from an outdated design, poor physical condition and a tainted reputation.

Fresh beginnings

“Sometimes when you have a property that has developed a stigma even with its name, you need to start over,” he said.

City of Waco housing director Jeff Wall and City Manager Larry Groth agreed that bulldozers are probably in Parkside’s future.

Wall said he expects the property will be sold for its appraisal value, minus the cost of bringing it up to code. That price could be close to zero, he said.

But he said the 14-acre property could be worth more if it were cleared for new development.

“Whatever they do, it will upgrade the area tremendously,” he said. “It’s going to be good for the community in the long run if they put in the kind of housing that’s quality.”

Backman said he has been impressed with the city of Waco’s efforts to prepare for the closing of Parkside Village.

“I think the city has been more proactive than any other community I’ve dealt with in a property abatement case,” he said. “They want to get this right and protect the citizens and the neighborhood.”

jbsmith@wacotrib.com

757-5752

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