Tenants are raising a legal hurdle to the proposed sale of an affordable-apartment complex in uptown Harrisburg.
- A New Jersey firm bid just over $9.6 million to buy the complex, known as Governor’s Square, from its current owner, Uptown Partners, which filed for bankruptcy protection last year.
- The tenants, represented by an attorney from a Harrisburg-based nonprofit, have filed a legal objection to some of the terms of the sale, which requires court approval.
What terms: One relates to language indicating that the sale would be made “free and clear of all liens, claims, encumbrances and other interests.”
- The property carries a restrictive covenant ensuring it remains affordable housing, said Marielle Macher, the tenants’ attorney and executive director of the Community Justice Project, part of the Pennsylvania Legal Aid Network.
- That covenant should remain in place through any sale, Macher said.
- Tenants also want to ensure their current leases are honored.
What else: The tenants want Uptown Partners to prove that the prospective buyer — a family-run company called ANCDI Properties — has committed “sufficient funds” to rehabilitate the complex, which needs extensive repairs to meet city codes.
- According to estimates cited in the tenants’ legal filing, the property requires more than $7.5 million in critical repairs and nearly $10 million in repairs within one year.
- Robert Chernicoff, an attorney for Uptown Partners, said he does not typically comment on legal objections. But he said ANCDI has agreed to abide by restrictions that keep Governor’s Square as affordable housing.
- The tenants’ legal filing includes paperwork submitted by ANCDI outlining the company’s plans, which boil down to rehabilitating the complex and instituting on-site management to prevent problems from recurring.
- The paperwork also suggests that ANCDI believes it can fix up the property for less than what has been previously estimated.
What’s next: A court hearing on the proposed sale is scheduled for Feb. 29 following a request by the U.S. Department of Housing and Urban Development for more time to weigh in.
- Because Governor’s Square is designated as affordable housing, HUD must sign off on the sale.
- In court filings, the agency said it has been working with both ANCDI and Uptown to discuss unspecified conditions on the sale.
- Uptown has identified a backup buyer in an entity called 2087 Market Street LLC, which bid just under $9.6 million for Governor’s Square. State records list the entity at an address in Hampden Township, Cumberland County.
