Warren and Tulane rehab could cost millions

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MEMPHIS, Tenn.  — A representative for the company that took over at the Global Ministries Foundation-owned Warren and Tulane apartments told a federal judge Tuesday “millions” would need to be invested to bring the complexes up to code and to the point where it’s “habitable” for potential residents.

Court-appointed receiver Don Shapiro, of Foresite Realty Management, was speaking to Judge Jon McCalla at a report date Tuesday morning.

Attorneys presented information related to the relocation of residents, current condition of the properties and potential sale, along with other issues.

Shapiro told the court Foresite was in the process of cleaning up vacated units and boarding them up.

According to HUD’s most recent report dated Friday, Aug. 12, all vouchers have been issued at Warren and Tulane.

At the Warren Apartments, 148 households, or 85 percent, have relocated or are in the process of moving.  At the Tulane Apartments, 160 households, or 88 percent, have relocated or are in the process of moving.

According to HUD, 27 households still need to find housing.

In a report submitted to the court last week, HUD said the remaining 10 percent of households tends to be the biggest challenge in these types of cases. Tenants have 60 days before vouchers expire, plus the possibility of a 30-day extension.

A HUD spokesperson told WREG they’re hoping to have all of the moves completed by the end of August but would “continue to be flexible.”

As the relocation process comes toward a close, the parties involved continue to work to sell the properties.

Shapiro told Judge McCalla GMF is continuing to work with HUD on its own plan to sell a group of properties, which include Warren and Tulane. He said a possible deal is in the works with a well-known company.

Meanwhile, Shapiro said Foresite will be working separately to market Warren and Tulane for sale. He said they hope to have the properties on the market by Labor Day.

He added a sale won’t likely happen until the end of the year or the beginning of 2017, pending the possibility of a buyer getting a Housing Assistance Payment contract with HUD for Tulane.

Given its condition, city leaders expressed the idea of wanting to have Warren torn down. Shapiro said there are still possibilities for the property.

The court also reviewed claims filed related to companies that will be paid from the proceeds of the sale.

The Bank of New York Mellon filed a claim worth more than $11.8 million. Other companies included MLGW and a law firm that handled evictions prior to the receivership.

The bank represents bondholders who filed the suit back in May, which led to the receiver taking over at the two properties. 

Earlier this month, federal agents executed search warrants at GMF headquarters in Cordova related to a HUD-OIG investigation. Court documents also reveal the Securities and Exchange Commission is now looking into Global Ministries.

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