Although the building is still in the same location, over the years The Alms has become housing for the poor and notorious for criminal activity and fires.
Cincinnati Business Courier
SUBSCRIBER CONTENT: Dec 25, 2006, 2006, 12:00am EST
UPDATED: Dec 21, 2006, 3:06pm EST
Developer buys troubled apartments
- Laura Baverman and Dan Monk
- Staff Reporters
A changing of the guard at Alms Hill Apartments could spur the cleanup of one of Walnut Hills' biggest trouble spots.
Veteran low-income housing developer Downtown Property Management recently signed a purchase contract to buy the Alms, a 212-unit apartment building owned by a Seattle-based limited partnership. Downtown Property Management, founded in the 1960s by former Xavier University Professor Ayyanna Ramineni, owns or operates some 5,000 local apartment units. His son Hari Ramineni, one of five brothers who now own the company, said the family hopes to convert the building to upscale condominiums over the long term. It took over management in December.
Neighborhood leaders say the Alms Hill complex has a history of lax management and high crime. They call it Walnut Hills' single biggest problem, a property where dozens of tenants are under 25 and unemployed, qualifying for government subsidies that pay all but $25 of monthly rent.
"The problem needs to disappear," said Kam Misleh, owner of Skyline Chili adjacent to the property. "It is the worst-managed building and has a negative impact on everything."
Once a luxury hotel, the Alms was converted to low-income housing in the 1980s under a Housing Assistance Payments (HAP) contract with the U.S. Department of Housing and Urban Development, said James Cunningham, director of HUD's Cincinnati office.
After the contract expired in 1999, HUD continued its low-income subsidies on a year-to-year basis. In 2004, it rejected the building's participation in a new program that could have allowed the owner to restructure debt and increase rents. It also reassessed rents when it found rates to be higher than the market rate in Walnut Hills.
The Seattle partnership, affiliated with Security Properties Inc., bought the building in 1984. Hari Ramineni said the property has been for sale for more than two years.
Roy Lee, an attorney representing the Seattle partnership, said the group was forced to sell because of the HUD subsidy reduction. The group had received $1.1 million in gross rent up to that point, but that figure decreased to $850,000.
"That makes it hard to operate a property," he said, claiming the partnership also paid $900,000 - $15,000 per month - over the last five years to cover shortfalls.
"No one is making a profit on this," Lee said.
Over the last two years, the building has changed management twice. And crime is on the uptick. According to an Aug. 6 report by Cincinnati Police Capt. Richard Schmalz, the building has "been the site of many community problems for many years, and the problem has been getting worse."
Schmalz said the property generated 474 calls for police service in the 17 months ended June 7. It accounts for 14 percent of all "Part 1 crime" in Walnut Hills. That's a police designation for serious crimes, including murder, assault, rape and robbery. The property accounted for 25 percent of "Part 2," or less serious crimes.
The building failed a HUD inspection in 2002. In 2004, the city of Cincinnati threatened the owners with criminal prosecution because of slow progress in addressing more than three dozen building, fire and health code violations. More recently, Capt. Schmalz said residents "who are fearful of retaliation and feel as if they are being held hostage in their own building" have sought help from Walnut Hills neighborhood activists.
"It's like a frat house, only more violent," said Kathy Atkinson, president of the Walnut Hills Community Council. The council has advocated for the building to be transformed to market rate housing. A developer had it under contract this fall for a $19 million condo conversion but couldn't achieve financing in time to close on the property.
Ramineni said Downtown Property Management has agreed to a "ballpark" purchase price of $3 million, subject to negotiation. He said the priority is to stabilize the property. Long term, he wants to convert it to "upscale condos" or rental but said deed restrictions and HUD rules could make that difficult. He has architects reviewing options for the redevelopment and figures it will cost about $6 million. He added that neighborhood support and city subsidies will be factors in the decision on future uses.
Even if the building stays low-income, Ramineni vows to clean it up. He claims Downtown Property Management has filed for eviction on 15 to 20 tenants and issued trespassing warnings to "a couple hundred people." He said the property now has a full-time security guard, and he's spending $2,500 a week on patrols by off-duty police.
"The building was trouble for many, many years. It's time to change," Ramineni said.
HUD's Cunningham said Downtown Property Management has a reputation for turning around troubled properties. And he hopes that will happen here.
"Our experience is that they will do whatever they can to make it right. The question is, 'Is it financially feasible to make it right?' That's always been the $64,000 question on that property," Cunningham said.
Neighborhood leaders have adopted a wait-and-see approach.
"If the long-range plan is the same as other developers, the neighborhood is not going to object," Atkinson said. "But there has to be a short-term solution to make it viable to move to that long-range plan."