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Residents of the Southside’s long-neglected Forest Cove apartments will continue living in ramshackle conditions until the property owner can secure financing for the complex’s desperately needed revival.
Millennia Housing Management, the national real estate firm that previously managed the property, purchased the “uninhabitable” 396-unit complex in April from Global Ministries Foundation after years of deterioration and neglect. Millennia plans to spend $56 million — upwards of $140,000 per unit — to restore the dilapidated Section 8 community.
But, according to Millennia officials, Forest Cove’s rebirth won’t be possible unless the Georgia Department of Community Affairs (DCA) approves its application for the 4% low-income housing tax credit that’s key to securing bond financing for construction.
Millennia said in December that construction could launch as soon as this month. The City of Atlanta has approved the building permits, an unnamed private investor has committed to backing the project, and crews are ready to get to work, spokesperson Valerie Jerome told Atlanta Civic Circle on Friday.
Without the tax credit, she said, “We cannot move this project forward, nor could any developer.”
“We will be within a few weeks of closing as soon as we receive the approval,” Jerome added, saying that construction should kick off soon after.
Millennia applied for the DCA tax credit in 2018, before buying Forest Cove, under its purchase contract, said Arthur Krauer, Millennia’s vice president of tax credit development. “They’ve been reviewing our application for a very long time,” he added. “My hope is that we’re going to get the approvals very soon.”
Because of the severity of Forest Cove’s condition, which includes mold and pest infestations, Krauer said the level of remediation funding that’s needed requires a public subsidy through the state’s tax credit program for low-income housing.
“The lack of investment in this property, going back decades, has created huge challenges,” he explained. “Nobody would take on this deal without the [public] resources necessary to get it done.”
The DCA considers the scope and feasibility of the project, as well as the developer’s plan for relocating current residents during construction. Krauer said Millennia has all that in order.
DCA spokesperson Adrion Bell said the state agency hasn’t yet determined whether to award Millennia the tax credit. He did not say how soon that decision could be made.
However, the CEO of affordable housing developer Place Properties, Cecil Phillips, told Atlanta Civic Circle that if Forest Cove’s rehab hinges on the DCA tax credit, that could signal problems with the project’s financing. “If the [financial backing for the] property is so skinny that it can’t be done without these credits, something’s wrong with the numbers,” he said.
“It could be anything: Construction costs are too high, rents are too low,” Phillips said. “But is this deal really so precarious that they can’t go forward without these credits? If you depend upon Uncle Sam to subsidize your activity – and that’s a go/no-go – I always vote no-go.”
Kauer said in response that Phillips doesn’t know enough about the severely deteriorated state of the property.
Meanwhile, Forest Cove’s residents at the apartments, which have long been plagued with litter, mold, pests, and violence, are still stuck in squalor, according to Alison Johnson, the executive director of advocacy group Housing Justice League.
“It is criminal the way residents are forced to survive with the current conditions,” she told Atlanta Civic Circle.
Millennia has taken flak for years for its role in allowing Forest Cove to fall apart. Before it purchased the property last year — as part of a roughly $250 million deal to acquire Global Ministries’s entire national Section 8 housing portfolio — Millennia, then the property manager, sparred with the former owner over who was responsible for upkeep.
Forest Cove isn’t the only problematic property run by Millennia. A Houston Chronicle investigation called “Living Hell” uncovered similar issues — including bugs, mold, and crime — at Millennia-owned properties in Missouri, Texas, and Florida.
But Millennia’s spokesperson, Jerome, said the properties named in that exposé last March were already scheduled for rehabilitation, and that they’re either fully or almost completed.
Krauer said he’s confident the DCA will green-light the tax credits for the Forest Cove project, adding that he doesn’t think the critical news coverage will impact the state agency’s decision.
As with its other rehab projects, Millennia has enlisted a team of local organizations — including APD Urban Planning and Management, Atlanta Volunteer Lawyers Foundation, Community Foundation for Greater Atlanta, Housing Justice League, Open Doors and Purpose Built Schools — to facilitate the temporary relocation of current tenants once construction starts.
Renters will be placed in nearby apartments in phases, so they can remain near their jobs and their children’s schools, according to Millennia.
Now that the mayor has signed to assist will the residents truly be able to live nearby their schools and jobs? That seems unlikely with the cost to live in that area.