HUD: Forest Cove owner in violation of contract

forest cove

In a letter dated March 21, HUD notified Forest Cove’s owner, Millennia, that it has failed to provide safe, decent and sanitary housing, a requirement to receive federal subsidy payments. (Alphonso Whitfield/WABE)

The U.S. Department of Housing and Urban Development has notified the owner of the deteriorating Forest Cove apartments that it is in violation of its federal contract. This is as residents continue to wait on plans to relocate them from the complex.

The Southeast Atlanta property is now known for its poor living conditions. Residents have complained of trash covering the grounds, rats and air quality issues in their units. Records analyzed by WABE show the apartments have received more than 500 code complaints over five years.

Because of the violations, a municipal judge moved at the end of last year to condemn Forest Cove. The ruling called the complex “uninhabitable.” Millenia has appealed the order.

Throughout this time, however, Forest Cove’s owner, a Cleveland-based company called Millennia, has continued to receive payments from the federal government. HUD subsidizes the nearly 400 units, allowing tenants to limit their rent to 30% of their income.

While the complex is now half empty, the federal payments have still amounted to nearly $3 million a year, according to payment records through last spring obtained through the Freedom of Information Act.

In the “Notice of Default” dated March 31, HUD told Millennia it has failed to provide living standards at Forest Cove that its payment contract requires.

The letter, delivered to tenants this week, says the city’s condemnation lawsuit and HUD’s own observations at Forest Cove “support HUD’s determination that the units and facilities of the project are not in decent, safe and sanitary conditions.”

The notice does not mean the federal government is ending payments to the property. Millennia first has a chance to submit a plan to HUD showing how it will bring the property back into compliance. The plan must include “timeframes and sources of financing,” according to the letter.

“Millennia has been in consistent communication with HUD while working to finalize the path forward at Forest Cove,” Millennia said in a statement. “In response to the letter, Millennia plans to issue the required response by the deadline.”

Millennia has planned to fix the problems at Forest Cove in a comprehensive renovation since late 2016. But even when the company finally bought the property in April of last year, it continued to delay construction. Millennia said it was waiting on tax credit financing controlled by the state.

After the city’s condemnation order, the Georgia Department of Community Affairs denied Millennia the tax credit financing necessary for the renovations.

WABE chronicled all of this in a year-long investigation, told through the perspective of one resident. It originally aired the week of February 7.

That week in February, Atlanta Mayor Andre Dickens visited the property and promised a plan to get residents out of the deplorable conditions. Despite city officials assuring residents they are working on the effort, there is still not a date for when relocation will start.

The city has said it identified around 170 units for the roughly 211 families still living at Forest Cove and that it has been working on an agreement with Millennia to fund the relocation.

This month’s letter to Millennia is the first time HUD has publicly acknowledged that the company is not meeting federal standards at the complex But it is not the first time an owner of Forest Cove has received a Notice of Default.

According to records requested by WABE, HUD sent similar letters in 2014, 2016 and 2018 while a previous company, Global Ministries Foundation, was in charge. Over those years, residents said conditions have only worsened.

WABE will update this story with comment from HUD when available.

*Correction: A previous version of this story did not clearly attribute Millennia’s statement in response to HUD’s letter.