Historical December 1989 report or notice. Original dates, prices and contacts describe the source period; current availability has not been established.
The Rosedale Square Apartments is a 12 building, 68 unit project located primarily on 6100 Washington & 500 Rosedale with one four family building on 6000 Washington.
City Equity, developer and general partner for a group of limited partners, began redeveloping the project in 1984 but went out of business in 1985 before it was completed.
The limited partners brought on a new general partner and, with some city assistance, a moderate rehab of the project was completed in 1985-86. Forest Park Investment Corporation managed the project for three years, 1985-1987.
The project was heavily mortgaged and in 1985 and 1986 the limited partners made annual voluntary capital contributions to increase equity in the project and reduce the debt. Rosedale Square then carried a debt of approximately $2 million which the project still could not support.
The monthly mortgage payment alone was $20,000 and at 100% occupancy the project could only generate $24,000 a month.
When asked for a third contribution to further reduce the debt and increase equity in the project, the investors declined.
In February, 1988 the lender foreclosed on the project. Other projects similar to Rosedale Square in the metropolitan area suffered a similar fate.
There are two primary reasons: projections for the rental market were high and subsequently the vacancy rates were substantially higher than predicted. Secondly, the tax law changes in 1986 removed the incentive for investors to contribute cash to investment property projects.
The loan for Rosedale Square was guaranteed by HUD and title to the property transferred to them shortly after the foreclosure.
It was the intention of HUD to advertise and accept sealed bids on each of the 12 properties in the project individually.
The City recognized that dividing this project would be disastrous for our neighborhood.
The City’s Land Clearance for Redevelopment Authority (LCRA) exercised its right of first refusal and purchased the property from HUD for 90% of its appraised value, based on an appraisal done by HUD.
At the time the City acquired the project, a private developer was interested in purchasing it from the City.
However, even with the mortgage reduced to $1.3 million, that developer, and several others after him, could not make the project work financially without substantial additional subsidy.
In the fall of 1988 Mayor Schoemehl launched a new city program to strengthen neighborhoods, “Operation ConServ’: One component of ConServ is neighborhood-based, not for profit housing corporations.
The Skinker DeBaliviere Community Housing Corporation (SDCHC) incorporated in November, 1988.
The SDCHC was deemed “the purchaser/developer of last resort” for Rosedale Square.
The city’s LCRA, ConServ and SDCHC negotiated the sale of the project to the SDCHC during the spring and summer; SDCHC closed on the project in August, 1989.
The City’s LCRA holds a note and deed of trust against Rosedale Square for $1.3 million. SDCHC does not make monthly payments against the note but when the project, or any part of it, is sold, proceeds go to the LCRA. Any income the property generates while SDCHC owns it must either be reinvested in the project, or turned over to Operation Impact, who controls SDCHC funding. SDCHC may use the project to leverage additional funds from a private lender, but any loans against Rosedale Square must finance improvements to Rosedale Square.
The SDCHC Board, with assistance from Operation Impact staff, is developing a long range plan for Rosedale Square through an issue analysis.
This process involves listing criteria for the project in priority order and cross referencing the criteria with alternative plans for the project.
A priority goal for SDCHC with any property is to increase owner/occupancy.
The board is looking at ways to achieve this goal in Rosedale Square.
While long range plans are developed, SDCHC is working to stabilize the project, bring the buildings up to code, lease as many units as possible, and increase the use of off-street parking.
In addition to painting, carpet cleaning and general minor repairs, some of the project’s units need substantial work to make them ready for lease. Four air conditioner compressors had to be replaced at the end of August and there are serious problems with the lateral sewer lines in at least one of the buildings. SDCHC has resolved to acquire up to three additional vacant/problem properties adjacent to, or nearby the Rosedale Square project. SDCHC has contracts on two of these properties, one of which has been accepted.
The goal is to help stabilize the area around the project. SDCHC is working with Alderman Dan McGuire and residents of 6000 Washington on a plan to expand the Rosedale Square Project Area to make tax abatement incentives available to the entire block.
The current manager of Rosedale Square is Pat Sweet, Personalized Property.
She is under contract with Operation Impact on behalf of the SDCHC. Any questions, suggestions, or comments about the Rosedale Square project should be directed to Nancy Farmer at the SDCC, 862-5122.
Originally published in The Times of Skinker-DeBaliviere, December 1989.
Read this article in the original newspaper issue.
Original source: SD_Times1989_12.pdf, printed page(s) 7; PDF page(s) 7.
