Subscribe to the new podcast ‘Killing Lorenzen’ – Episode 6 just released

Failures with GMF troubled housing extend beyond non-profit and Memphis

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.

MEMPHIS, Tenn. -- Residents of the Warren and Tulane apartments will soon have a new place to call home.

The Department of Housing and Urban Development is moving the residents after cutting off roughly $2.9 million in annual funding (housing assistance payments for 2014) to the owner of the complexes, Global Ministries Foundation Preservation of Affordability Corporation.

Warren-Tulane Notice of Abatement

The rare move comes months after GMF-PAC had been put on notice about unsafe living conditions at the apartments.

But how did it even get this far?

An On Your Side Investigation uncovered problems far beyond GMF and Memphis, Tennessee.

In fact, failures at every level hurt residents and ultimately taxpayers footing the bill.

Crime and deplorable living conditions are often a reality for residents at places like the Goodwill Village Apartments, as well as Warren and Tulane.

All of the above mentioned are owned by a non-profit associated with a ministry and its preacher Richard Hamlet.

In a recent interview posted online labeled Richard Hamlet, transforming Section 8 Housing, Hamlet talked about the negative way in which some residents of his complexes are viewed.

He said, "Society says these folks are least in our society...a lot of these folks are heroes."

Yet, WREG found many are getting less than a hero's welcome in their own homes.

Outside Goodwill Village Apartments, WREG cameras recently captured crews handling repair work.

Inside, though, it was easy to see there's still a long way to go.

One resident who didn't want to show his face told WREG workers recently handled maintenance on his hot water heater, but it flooded the apartment and days later they still didn't have hot water.

He also referenced a kitchen drawer that was supposed to be put back together, "They just nail them back together like this, instead of putting them to how they exactly work."

Sharita Hill has been living at Goodwill Village for four years, she can't afford to move, and contrary to what some believe residents like her don't have Section 8 vouchers to go elsewhere.

Hill said, "I believe that they don't care."

Like the other resident WREG spoke with, she says even recent repairs are sloppy.

"They have their fancy house or whatever, and they don't care about us," said Hill.

That's a roughly 4,000 square foot Cordova home for GMF President and CEO Richard Hamlet.

He pulled in a salary of $495,000 according to 2014 tax records.

That increased by more than $120,000 over three years.

Hamlet`s a minister, but CPA by trade who got his start in multifamily housing a while back.

He discussed it during that same interview.

Hamlet said, "I've been in the space in different hats and roles for three decades now."

Before GMF, Hamlet worked for Tesco, a company founded by his late father in law, Thomas "Pete" Sisson.

Tesco owns another troubled property in the area, the Peppertree Apartments where police responded more than 1200 times in 2015 and a recent code enforcement sweep uncovered 41 violations.

GMF remains a family affair with Hamlet's wife, and children are also on the payroll.

Hamlet remarked during the interview, "What we're doing here in the states with the whole affordable housing business ministry fits right in with what we're doing around the world."

GMF-PAC, the real estate non-profit, owns roughly 60 complexes across the country, including eight in Memphis.

Tax records show GMF-PAC makes a hefty donation each year to its sister non-profit, Global Ministries Foundation each year. In 2014, GMF's total revenue was $8.7 million, of that $7.1 million came from GMF-PAC.

As for its structure, there are the two non-profits, and then most of the housing complexes are set up as their LLCs.

Over the past few years, GMF-PAC's housing portfolio has grown big and fast, and with a lot of help from the taxpayer.

Records show since 2010 the non-profit has received more than $53 million in tax-exempt bonds from the Health, Educational and Housing Facility Board of the City of Memphis, to help finance the purchase of its area properties.

Two of its complexes also benefit from the PILOT program (payment in lieu of taxes) from the same board, which means a break on the back end with lower property taxes.

When asked about additional compliance with property owners, staff members of the HEHFB sent WREG and email which in part read, "After issuance and delivery of the bonds, the Board has no ongoing duties or responsibilities regarding the bond financing, the Borrower, its compliance or creditworthiness or the project."

Shelby County Commissioner Melvin Burgess was one of several who was interested in HUD pulling GMF's funding long before it happened with Warren and Tulane.

"You have people over there in those kind of conditions, so why would they get monies to, that`s being benefited from the government, and you're still running some apartment buildings that are unacceptable," said Burgess.

WREG uncovered several audits for GMF properties.

In 2014, Goodwill Village LLC got just over $1.1 million from HUD for its housing assistance payments.

That represents much of its total revenue of $1.2 million.

However, of that, less than $200,000 went towards repairs and maintenance.

WREG asked Burgess, "Should everyone bear some more responsibility when it comes to this?"

He replied, "Everybody should be held accountable for this."

The On Your Side Investigators also learned Memphis Code Enforcement made 110 calls to Warren and Tulane alone in two years.

Yet, court administrators could only find one instance where the city took the owners or property managers to court before the big blowup last year.

WREG also found HUD breaks its own rules with late inspections.

HUD officials explained to WREG the following:

  • If a property scores 90 – 100 it is inspected every three years.
  • If a property scores 80 – 89 it is inspected every two years.
  • If a property scores 79 and below it is inspected annually.
  • A property inspection score of 59 or below is considered failing.
  • Properties have 72 hours to certify that all life-threatening health and safety deficiencies have been corrected.
  • HUD has the right to re-inspect within two to several months.

WREG found late inspections all across Memphis.  Case and point, before last year, despite scoring an "A", Goodwill hadn't had an inspection in five years.

Congressman Steve Cohen wrote HUD a letter in the spring about GMF properties and did the same regarding Peppertree recently.

He says he believes HUD is committed to getting to the bottom of the issue.

In fact, GMF isn't off the hook with HUD, the agency wants a full accounting of the non-profit's finances for as long as it's owned Warren and Tulane.

"I think HUD is looking at some of the money and some of these situations to see if it was properly, appropriated to the right source," said Rep. Cohen.

Burgess said, ultimately it's about focusing on the future.

"How do we make it better, a better way of life for those families and for those children."

For families like Hill's, trying to move forward.

Hamlet's PR person told the On Your Side Investigators repeatedly over the past few weeks, they would attempt to schedule a sit-down interview with Hamlet. That hasn't happened.

GMF is still scheduled to go before the County Commission and back to Environmental Court in the coming weeks to provide a status update on corrections to code violations.

HUD told WREG the relocation process for residents is already underway. It's been paid for with what would have been housing assistance payments.

Tenants will receive what's called Tenant Protection Vouchers.

Notice: you are using an outdated browser. Microsoft does not recommend using IE as your default browser. Some features on this website, like video and images, might not work properly. For the best experience, please upgrade your browser.