A Garfield Heights-based development company wants to construct an apartment building for low-income seniors on one-half of the site formerly occupied by the Spitzer Lakewood Chrysler Plymouth Jeep dealership.

NRP Group LLC’s plan was the lone submission in response to a request for proposal (RFP) issued jointly by Spitzer Management Inc. and the city soliciting concepts to redevelop the vacant property.

The RFP, which was published April 4, challenged applicants to create a financially viable concept for redevelopment that produced a long-term benefit to the community, complimented and respected adjacent land uses, and was visually appropriate.

In addition, the RFP suggested three ideas that would fit the bill: commercial space of 3,000 square feet or greater, single-level attached residential housing targeting the 55-year-old and above demographic segment, and senior or assisted living facilities.

To help facilitate a deal and connect the two sites, the city offered to surrender the right-of-way along the northernmost 200 feet of Parkwood Rd in exchange for the creation of a route permitting at least one-way traffic from that street onto Bunts Rd.

In its RFP response, NRP Group billed itself as “one of the largest and most successful developers of affordable housing in country” with four recent “urban infill” developments in Ohio, including Cornerstone Apartments, a three-story 64-unit senior community located on Cleveland’s East Side, near the East Cleveland border. The property is fully leased and has a 300-name waiting list, according to NRP Group’s marketing material.

Welcome to Parkwood Pointe

Parkwood Pointe, NRP Group’s vision for Lakewood, is a smaller version of Cornerstone Apartments. Aimed at low-income people 55-and-older, the three-floor apartment building would have 40 rental units. Each 862-square-foot apartment would feature two bedrooms and a single bathroom. 10% of the units would be handicap accessible.

The elevator-equipped $7.8 million development would have 3,000 square feet of interior common space, featuring a 780-square-foot community center/multi-purpose room with a flat screen TV and fireplace where seniors can “enjoy fellowship” and other activities. It would also include a small hair dressing studio and laundry room.

The financial linchpin of the proposal is the Low-Income Housing Tax Credit (LIHTC), an incentive created in the 1986 to increase the supply of quality affordable rental housing.

In short, it works like this: a developer builds affordable rental housing and earns 10 years worth of federal tax credits. In order to help finance the project with up-front cash, the developer sells the rights to the tax credits to someone who has a big federal tax burden – like a large corporation.

In order for a developer to qualify for this benefit, a number of guidelines must be followed. For instance, a certain number of units must be specifically set-aside for low-income renters.

In this case, NRP Group has designated all forty units for low-income residents. 20 units are set-aside for households with incomes of no more than 50% of the Area Median Household Income (AMHI). 16 units are for households with incomes of no more than 60% of the AMHI. 4 units are for households with incomes of no more than 35% of the AMHI.

To get a better idea of the economic scale, a two-person household with an income of 50% of the AMHI would earn no more than a total of $25,920 annually.

To be eligible for the tax credit, rent levels must be restricted by income group. Parkwood Pointe’s rent rates would range between $510 and $700, and include all utilities except telephone and cable. In addition, the development must provide minimum affordability for its tenants for at least 30 years.

According to research performed by NRP Group, the Lakewood-area has an unmet need for this type of house. It examined low-income senior housing offered at Kirby Manor on Detroit Ave. and Clifton Plaza on Clifton Blvd, both in Cleveland, and found occupancy rates to be very high. It projects Parkwood Pointe could achieve 96% occupancy within six months of opening.

If Spitzer Management agrees to sell the property (for $300,000, according to the RFP) and the project is approved by the city – it would require a zoning adjustment – it could open in early 2014.

One significant snag could be availability of the LIHTC. The Ohio Housing Finance Agency (OHFA) parcels out the tax credits on an annual basis using a competitive evaluation process.

In the most recent funding cycle, it awarded almost $24 million in tax credits to 33 housing development projects throughout the state. 76 other applicants were turned down and received nothing, including St. Clement Church.

St. Clement senior housing project stalls without tax credits

Catholic Charities Housing Corporation (CCHC) learned in March that it would not receive any funding from the state for its project to adapt and reuse the vacant elementary school at St. Clement as an apartment for low-income seniors age 55 and older.

Maryellen Staab, the deputy director of CCHC, said the project cannot move forward without tax credit financing. “It’s not going anywhere,” Staab said. “We do plan to reapply.”

Stabb said she’s had conversations with city officials about the redevelopment concept and they were supportive.

The application on file with the state shows the project shared some similarities with what NRP Group is proposing for the Spitzer property.

The $6.6 million project at 14401 Madison Ave. would have 39 units, including 17 one-bedroom apartments and 22 two-bedroom apartments. Each with a bathroom, the rooms would be somewhat smaller than the rooms at the NRP Group development at around 650-square-feet per single bedroom unit and about 850-square-feet per double bedroom unit.

Rent would include utilities and be $605 for a single bedroom and $689 for a double bedroom. Four single room units designated for tenants with an income at 35% of the AMHI would be $425. All other rooms would be reserved for tenants with an income of at least 50% of the AMHI.

The development would include a large community room, as well as a warming kitchen, laundry room, elevator and other gathering spaces.

To support the new use, a three-story addition would be added to the structure. Two small out-buildings, an addition and a convent would all be demolished.

Wallick-Hendy Properties would provide on-site property management and CCHC would be the 100% general partner and developer of the project.

If the state had provided funding, the development was expected to have been operational by early 2013.

The Board of Building Standards and Building Appeals last month upheld the city’s public nuisance declaration of the vacant building at 11900 Madison Ave., a former rooming house also known as Newman Corners.

The decision means Pennsylvania-based Apex Mortgage Co., the building’s owner, must either repair or demolish the structure. If no action is taken, the city has the legal right to remedy the situation through the same means.

Ted Kapnek, president of Apex Mortgage, said his company would file an appeal of the board’s decision with the county court of common pleas, repair the building and reopen it as a rooming house despite the city’s apparent opposition.

Company sought continuance after deal fell through

The attorney representing Apex Mortgage acknowledged that the building had defects, and asked the board for a 90-day continuance in order to correct the problems.

He said the building was emptied of its 14 tenants – 11 left voluntarily and three were evicted – after the city expressed an interest in acquiring the property with the condition it be vacant for 90 days in order to qualify for funds to finance the transaction.

In the meantime, according to Apex’s lawyer, the city lost interest in the deal and withdrew the offer. “In terms of equity, we want that 90 days back,” he said, and added that eight of the 10 fire code violations had been corrected. “It’s not as if they sat on their hands on this.”

Dru Siley, the assistant director of planning and development, denied the city ever made an offer to purchase the building.

Since Apex’s lawyer was not contesting the legitimacy of the public nuisance declaration, the formal appeal was essentially rendered a moot point. Law Director Kevin Butler didn’t believe a continuance was necessary, and suggested the board hear the city’s evidence and then vote on the matter.

Assistant Building Commissioner Robert Apanasewicz outlined the recent history of the city’s involvement with the property.

May 2009: Apex Mortgage Company took ownership with a deed-in-lieu of foreclosure
June 2009: City building inspection resulted in correction notice
Sept. 2009: Some repairs made, others to be completed by Oct. 2009
Oct. 2009: Additional repairs not performed by owner
Jan. 2010: City fire inspection identified new violations
Sept. 2010: City prosecutor filed building code complaint in municipal court
City building inspection resulted in revised correction notice
Nov. 2010: City prosecutor withdraws case. Court records indicate it was withdrawn because an incorrect party was named as defendant.

Apanasewicz said when the court case was withdrawn, Apex Morgage agreed to remove all of the tenants from the building. It has been vacant since December 13, 2010.

The public nuisance declaration was triggered on March 16 when police found the unoccupied building to be unlocked and open to the public. It could not be re-secured, and members of the Public Works Dept. were called upon to seal the building.

Fire Marshall Tim Dunphy told the board he identified several violations during a January 2010 inspection. Apex Mortgage later claimed all of the problems were fixed, but Dunphy’s follow-up inspection on April 6 found that nothing had been completed.

Building Inspector Kevin Kelley narrated a slide show of photos depicting the building’s shabby state. Though generally structurally sound, the property suffered from decades of deferred maintenance and neglect. It looked like a dingy living space of last resort, with damaged plaster, broken doors and debris strewn about.

One board member later commented, “I’m just appalled that people in my city would live in a place like that.”

Kelley told the board an April 6 re-inspection found, with the exception of several prohibited cooking appliances that had been removed, existence of the same violations he documented in September 2010.

Neighbors call building ‘crack house,’ ‘eyesore’

Two representatives from Madison Soft Cloth Auto Wash and Detail Center, the business located directly to the east of the building spoke during the public comment portion of the appeals hearing. Notably absent was Ward 4 Councilperson Mary Louise Madigan, who represents the East End.

Car wash owner Dave Hoffman told the board he might not have bought the business nine years ago if he knew about the kinds of problems emanating from the building next door.

As a one-time military narcotics investigator, Hoffman said he saw obvious signs of trouble at what was commonly referred to as “the crack house.”

“The traffic that was in and out of there was terrible,” he said. Hoffman described the people who frequented the building as being “one step above derelicts.”

He echoed the city inspector’s observations, and called maintenance at the neighboring building “nearly non-existent.”

Since it has been vacant, however, the neighborhood “has taken on a completely different flavor,” Hoffman said. “The undesirable element is much less.”

Keith Ashby, who has managed the car wash for seven years and spends a lot of time in the area, said he frequently saw police at the building. “It’s just an eyesore,” he said of the structure. “I wouldn’t mind seeing the place bulldozed.”

Board member Michael Fleenor opposed the building’s demolition due to its architectural and historical significance. “I think it’s worthy of reinvestment,” he said.

The board unanimously voted to uphold the city’s public nuisance declaration.

Apex Mortgage prez: ‘The last thing I want is to own this property’

Reached on Thursday, Apex Mortgage President Ted Kapnek elaborated on the situation and shared his company’s plans for the building.

He said representatives from Apex Mortgage had several conversations with the city’s law department and then-Director of Planning and Development Nathan Kelly who told them the property was “ideal” for purchase by a redevelopment program – possibly a reference to the Cuyahoga County Land Bank – but it had to be vacant for at least 90 days to be eligible for acquisition.

In the period after the tenants were removed from the building, a different mayoral administration took office, Kelly left the employment of the city, and communication between the two parties went quiet.

Kapnek sent a follow-up letter to the mayor and received a phone call from Assistant Director of Planning and Development Dru Siley informing him the city was no longer interested in the property.

At some point, the city invited Apex Mortgage to donate the property for demolition. The offer was declined due to the considerable outstanding balance on the original mortgage of $270,000. It’s worth a fraction of that in its current condition, Kapnek acknowledged, “but it’s not worth zero.”

Kapnek said his company would appeal the decision issued by the Board of Building Standards and Building Appeals.

He said Apex Mortgage’s goal is to have the building repaired and returned to its “maximum economic value” as a rooming house – it is too costly to convert into a traditional apartment building.

The property had been on the market for quite some time before the tenants were removed. It was relisted last month for $99,900. “We’re just a mortgage company,” Kapnek said. “The last thing I want is to own this property.”

The building’s condition deteriorated further after it was broken into about two weeks ago.

“They came in and cut holes in the wall and stole all the copper piping they could find,” Kapnek said, and noted that the damage was not covered by insurance because the building was vacant at the time of the event.

He said the company is evaluating its legal options because it believes the city’s actions contributed to the crime: if the building were occupied, the incident might not have occurred.

During discussions held last year on proposed changes to the housing license application process, a few city hall officials, including Councilperson Madigan, expressed disdain about rooming houses.

Kapnek said he is “aware the neighbors and the city don’t want a rooming house.” He took umbrage with car wash owner Dave Hoffman’s characterization of his former tenants.

Far from being vagrants, Kapnek called them “hard-working people” who paid their weekly rent. “Without the option of a rooming house,” he said, “They probably would not have had housing.

The city hasn’t formally told Kapnek if it opposes his plan to repair the building and restore its prior use, but he thinks it does. “We were told in a phone conversation that they will fight our ability to reoccupy this as a rooming house,” he said.

Kapnek believes the law is on his side. Even though the property is now zoned to prohibit rooming houses, the building had a grandfather clause permitting it to operate legally. The city’s ordinance states it may reopen and continue operation as long as it has not been closed for six consecutive months.

Kapnek is waiting on some cost estimates to repair the building, and believes the rooming house will reopen within the allowable timeframe.

Several other rooming houses call Lakewood home

A rooming house is defined by law as a building with one or more rooming units – used for living and sleeping only – where the occupants have access to communal sanitary facilities but do not benefit from cooking facilities within the structure.

Based on information provided last summer by the Division of Housing and Building, there were 13 rooming houses in the city. The majority of them were in the Fourth Ward, including Kapnek’s Newman Corners, which was the largest.

Roomers	Address	Ward	Owner	Address
15	11900 Madison Ave.	Ward 4	Apex Mortgage Co.	185 Commerce Run Dr. Fort Washington, PA
9	1389 Cove Ave.	Ward 4	Richard Klimek	7620 Buchanan Ct. Mentor, OH
9	1414 Newman Ave.	Ward 4	Richard Klimek	7620 Buchanan Cir. Mentor, OH
8	1446 Mars Ave.	Ward 2	Aivars Auzenbergs	38801 Bridle Ct. Avon, OH
6	1447 Clarence Ave.	Ward 4	Lisa Delong	1447 Clarence Ave Lakewood, OH
6	1436 Grace Ave.	Ward 4	Aivars Auzenbergs	38801 Bridle Ct. Avon, OH
5	1441 Cohassett Ave.	Ward 4	Marian Tapu	41 HF Forest Acres Dr. Bradford, MA
4	12816 Detroit Ave.	Ward 4	Gountis Properties	15400 Madison Ave. Lakewood, OH
4	12415 Madison Ave.	Ward 4	Frances Yenny	23547 Quail Hollow Westlake, OH
1	2090 Brown Rd	Ward 3	Kevin & Amy Davey	28852 Woodmill Drive Westlake, OH
1	1571 Bunts Rd	Ward 3	Edward Palidar	1571 Bunts Rd. Lakewood, OH
1	1606 Clarence Ave.	Ward 3	Brian Gaul	1497 Mendelssohn Dr. Westlake, OH
1	15725 Lake Ave.	Ward 2	George & Carol Hillen	15725 Lake Ave. Lakewood, OH

The Mars address was the site of a standoff last summer where an individual believed to be involved in the incident was found dead a couple of days later in the Cuyahoga River.