Harrisburg officials are allegedly hindering the sale of a beleaguered apartment complex in the city’s uptown neighborhood, according to claims raised in federal bankruptcy court by the complex’s owner, Uptown Partners LP.
At issue is a list of roughly 600 crucial code violations at the affordable-housing complex, known as Governor’s Square
City officials have not shared the list with several prospective buyers, despite requests for it, according to a July 22 filing by Uptown Partners.
The filing asks the court to order the city to hand over the list, which is a subset of a longer list of violations assessed against the complex.
“That’s all we’ve been asking for,” said Robert Chernicoff, a Harrisburg-based attorney representing Maryland-based Uptown Partners.
Harrisburg spokesperson Matt Maisel said the city disputes the firm’s allegations and will be filing a response in court later this week.
Why does it matter: A buyer needs the list to satisfy conditions on the bankruptcy sale set by the U.S. Department of Housing and Urban Development, according to Uptown Partners.
HUD, which must approve the sale, said a proposed buyer has to provide a plan for repairing Governor’s Square.
“Because the City will not provide, to any of the current proposed buyers, the list of Code Violations, such submission to HUD is impaired and difficult to perform.,” Uptown Partners said in its filing.
The filing further alleged that the city’s actions “may be designed to prevent a sale to any of the Debtor’s proposed buyers.”
The buyers: The court approved an auction of Governor’s Square last fall, a process that attracted three bidders all willing to pay more than $9 million.
A winning bid of $9.624 million came in January from a New Jersey-based company called ANCDI Properties, followed by a bid of $9.594 million from a Cumberland County-based entity called 2087 Market Street LLC.
A third firm, Ohio-based Woda Cooper, bid $9.13 million.
The proposed sale to ANCDI met with opposition from HUD and city officials.
They raised concerns about the firm’s experience with affordable housing and its plans for fixing up Governor’s Square.
A report identified a need for $22 million in repairs, but previous legal filings suggest the most critical repairs would cost about $7.5 million.
HUD also has been seeking guarantees that the complex will remain affordable.
Chernicoff said he is not sure whether ANCDI is still interested in a deal.
In the meantime, another potential buyer has emerged and expressed an interest in matching the previous bids, said Chernicoff, citing conversations with the brokerage firm marketing the property.
The background: The legal wrangling over the list of crucial violations is the latest twist in a bankruptcy saga that has lasted more than a year.
Uptown Partners filed for bankruptcy in May 2023.
In the meantime, the complex has deteriorated, worsening conditions for residents, according to legal filings made by its management company.
