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MEMPHIS, Tenn. — The Department of Housing and Urban Development announced in court Thursday it is ending its contract with Peppertree Apartments and pulling funding, according to a news release from the city of Memphis.

HUD said the owners of the troubled Whitehaven subsidized housing complex have not provided decent, safe, and sanitary housing. The agency plans to start relocating the residents over the next several months, beginning in about 60 days, the city said.

“For over a year, we have led the effort to force Peppertree to provide a safe and habitable environment for these residents,” Memphis Mayor Jim Strickland said Thursday. “While we understand that HUD will take the lead on relocating and communicating next steps with residents, the City of Memphis will work with them to ensure these residents have a smooth transition.”

Previous inspections by HUD listed a litany of complaints including blocked or unusable emergency exits, exposed wires, bug infestations, mold, and mildew. In 2021, a walkway collapsed, injuring two people.

Strickland earlier this year lashed out at the property’s management, calling them “reckless.”

Shelby County’s district attorney issued a nuisance order against the property. From March 2020 to October 2021, police responded to calls coming from the Peppertree Apartments 1,649 times.

Peppertree is owned by Germantown-based Tesco.

Since 2012, Tesco received more than $22 million from HUD for housing assistance payments at Peppertree, money that covers rent for tenants at the 306-unit complex. 

Lawyer Alexander Wharton, who represents TESCO in environmental court, says the city’s mind was made up about Peppertree due to the violence before they were given a chance to fix conditions within the complex. 

“There was never any guidance or condemnation from HUD saying that this property is not safe, so we’re talking about a decision that was reached by the city,” said Wharton.

Request for comment from TESCO directly went unanswered.

Jennifer Sink, the city’s chief legal officer, said she was confident that there were enough landlords willing to accept HUD vouchers to house all the current residents that are being rehoused from Peppertree.

HUD says they plan to offer Peppertree residents housing vouchers by January 14 and hope to begin relocating them in the next couple of months. 

The city says they will monitor the property until all residents are evacuated. They did not specify where they plan to relocate the residents.