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MEMPHIS, Tenn. — WREG Investigators recently uncovered records revealing that both the owners of the Peppertree Apartments in Whitehaven and federal housing regulators knew that walkways, and therefore residents, were at risk long before they collapsed.

November marked one year since the taxpayer funded complex was declared a public nuisance because of crime. That nuisance order prevented owners from bringing on new tenants or renewing leases with existing residents.

Those details continue to play out in a federal court case.

In August, the owners were once again banned from signing new leases. It was the same month the leasing office caught fire and a walkway collapsed at the property, sending residents to the hospital.

The owners have yet to start permanent repairs on walkways that collapsed this summer, even though Environmental Court has demanded they fix the problems.

Despite the crime and documented, unsafe living conditions, Peppertree provides a roof over hundreds of families’ heads struggling to make ends meet.

One mother told us, “I lost my job. Couldn’t afford to pay the next month’s rent, so I moved over here. I have three kids between the ages of one and seven.”

The mother of three said dealing with the long list of problems at Peppertree makes life even more stressful. 

The resident, who wanted to remain anonymous, said she was outside barbecuing in August on the day when she saw a walkway collapse and a family along with it.

“I actually saw that little incident with the girl and the older guy that fell when the walkway fell. I was actually right there. They were upstairs walking across the walkway. And they just fell like you just just fell,” she said.

The resident continued, “I panicked because I never saw anything like that happen in front of me. And I was I was scared for the girl!”

Scared, but not surprised.

“If you would have saw the walkway before it fell in, you would have said what everybody else said — that’s going to fall eventually,” she said.

We learned someone else did see a problem with the walkways, and documented exactly what could happen more than six months before the collapse that sent at least two residents to the hospital. 

It’s in a HUD inspection from January 2021. Peppertree failed with a 51. 

The taxpayer-funded complex was cited for a total of 29 health and safety deficiencies. Four were considered life threatening.

In the same 82-page report, Peppertree is cited for multiple deficiencies for halls-corridors and stairs in common areas. WREG counted at least seven times, where an inspector uses the words “rotted/deteriorated subfloor or bulging, buckling floors.” 

One comment reads “corroded metal deck under concrete slab floor.” Another says “corrugated metal deck severely corroded.” The inspector also wrote “this condition is common throughout the facility” and “applying weight may cause deflection.”

“Deteriorated” was one of the same words used by county code inspectors who took pictures, documenting the damage they found after a walkway collapsed on Aug. 2, one of two collapses that month.

Peppertree cited by code enforcement for collapsed walkways

The inspectors said it appeared “Successive layers of concrete were added over the years after the initial pour, with no steel reinforcement. Metal pans had rusted and become deteriorated.”

“The conditions at their property are not safe and they’re not what are needed are some permanent fixes to the property for these tenants,” said Jennifer Sink, the Chief Legal Officer, for the City of Memphis.

It’s part of the reason Sink says the city is still in court with Peppertree and its parent company, Tesco.

WREG wanted to know if the city knew, inspectors had sounded the alarm on walkways long before they collapsed.

We asked, “Is that information something that has been shared with you all, either by HUD or by the folks at Peppertree or Tesco about? It doesn’t look like any of this was new.”

Sink replied, “Well, the city doesn’t normally receive information about the inspections between HUD and any of the properties that they are affiliated with.”

The records WREG uncovered not only reveal HUD and Peppertree knew about the walkways, but that the owners were required to fix them. 

Days after Peppertree failed that January inspection, HUD sent the owners a Notice of Violation and Notice of Default, which means they could lose their contract and the cash attached to it. 

In the notices, HUD referenced the “serious” deficiencies cited during that January visit like “deteriorated subfloors.” 

HUD gave the owners 60 days to conduct their own survey of the entire property and correct all physical deficiencies found in both inspections.

Peppertree’s own survey of the entire building uncovered even more problems.  

In April, the owners asked HUD for an extension. In a letter sent to HUD, they said they were “working on priority items” and had made progress but needed additional time. 

They also said “our resources have been strained by preparing for and defending the lawsuit with the city.”

HUD granted Peppertree that extension, but said all repairs must be complete by May 31. 

That deadline came and went and HUD continued to pay Peppertree more than a half-million dollars in June, July and August alone.

Records show HUD paid Peppertree’s owners roughly $2.2 million for housing assistance payments in 2021. Payments from January through August of 2022 totaled $1.3 million, including the $517,097 paid during from June to August.

WREG previously reported that HUD signed a new contract with Peppertree just as the parties were headed to court over the nuisance order.

Owners receiving millions from feds for apartment complex deemed a ‘nuisance’

“The structural problems with that building did not occur overnight,” Sink said. “They’ve been going on for quite some time and in my opinion, are the result of deferred maintenance by the owners of Pepper Tree.”

WREG asked HUD about the missed deadlines and many other questions and the agency hasn’t answered, blaming the ongoing lawsuits.

Peppertree’s attorney, Alexander Wharton, said he couldn’t comment about this particular matter because another law firm had been handling information specific to HUD inspections. 

We reached out to them and we’re waiting to hear back.

Peppertree had another HUD inspection on Aug. 4, 2022, just days after one of the walkways collapsed. The complex failed that inspection too with a 54.

Attorneys for Peppertree head back to Environmental Court on Dec. 15. The case in federal court is still pending.