‘IT’S LESS THAN HUMAN’
Kansas City officials, tenants push back on delays in rehab
KANSAS CITY, MO. — As the Kansas City Health Department inspected and reinspected Englewood, the HUD office of inspector general began an investigation of its own. It would take nearly a year.
It launched as the local Fox affiliate reported a whistleblower had reached out in September 2019, pointing out two signatures for the same tenant. One, the ex-employee alleged, was signed after the tenant had died. The two signatures did not match.
Dan Fowler, the Kansas City councilman, could not understand why, between the constant citations, slow renovations, and now, irregular rent rolls, Millennia was still managing the property. HUD staffer Ed Manning had ordered them to find a new management company in fall 2019. They had not.
City officials reached out to the office of a local congressman, Sam Graves, to try to figure out what had happened. On Jan. 17, 2020, a HUD Office of Congressional & Intergovernmental Relations employee wrote back to Graves’ office.
“The property owner for the Englewood Apartments is meeting all requirements and is in compliance with all regulations,” she wrote. “HUD has worked with the owner and does not see reason to enforce this order at this time.”
At a meeting after the city officials figured out HUD wouldn’t be replacing Millennia as the management company after all, Dan could not get a straight answer on who made the decision.
“It was inconceivable to me that they couldn’t all of a sudden remember who did what or who said what,” Dan said. “Somebody had to sign something.”
But even as one HUD staffer assured Congress and, in turn, Kansas City, that everything at Engle
‘HUD needs to look at its regulations and start enforcing them.’
wood was going according to plan, others in the agency knew it was not. Ed was continuing to send emails to the city attorney for Kansas City, asking for updates and criticizing the company for “over promising and under delivering.” Another HUD inspector noted that “workmanship was very poor or below average … numerous areas of mold still present in all three buildings during our inspection that appeared to be painted over.”
And HUD’s office of inspector general was gathering thread for the Englewood audit.
HUD released a 54-page audit of Millennia’s practices at Englewood on June 8, 2020. The investigation covered 2016 to 2018, a time span in which Englewood collected over $2.2 million in tenant subsidies. Inspectors found the company collected $24,295 in federal subsidies it could not support with documentation — and over $377,000 that the company never should have had.
HUD found the company was not verifying tenants’ income, not performing routine physical inspections and not asking for documentation like Social Security cards. As Kansas City police officer Christina Ludwig had years before, HUD noted the exceptionally high turnover rate in property management. HUD verified that Millennia had processed paperwork with a dead tenant’s signature.
Millennia contested the findings in response to HUD, arguing that auditors had not examined enough files to have reliable findings. The Millennia response pointed out improvements it had made and pledged to work with HUD, although it disagreed on repayment amounts. The company objected to being potentially disciplined for “actions taken by many people no longer with the Management Agent.” And there was a note of caution: Administrative actions would make it harder for Millennia to rehab the property.
In a letter to HUD, Millennia CEO Frank Sinito wrote that the audit had prompted the company to review its practices. To the Chronicle, he wrote, “Millennia has instituted greater oversight to ensure the regular inspection of vacant units, hired a new property management and maintenance team, and underwent monitoring and assessments.”
Ed emailed a HUD colleague in July, after the audit was released. He pointed out a recommendation on page 12 for HUD to take “appropriate administrative actions, up to and including debarment.” If debarred, Millennia would not be eligible for HUD contracts.
Nothing has happened. Dan gives credit where it is due. Englewood is improving now. But he wonders how HUD let it fall so far, and why Millennia started work only when the city cracked down.
“To let people live in those conditions — it’s less than human,” he said. “HUD needs to look at its regulations and start enforcing them. Why in the flying hell did it get in that place, that condition, in the first place?”
As Englewood entered what the city hoped was its closing stage of a rehab, miles away, at a property called Gabriel Tower, tenants began to protest. It was June 2020, the summer heat was building and their air conditioning had gone out.
The newly formed Gabriel Tower tenant union, working with organizers from the citywide union KC Tenants, researched Millennia. They found the same headlines Emily Hunter had when she sat in her room in Galveston. They found Crystal Lewis and the Palm Beach County Tenants Union and reached out. They lobbied city officials.
Like an Englewood redux, local television stations came out to film pooling water and substances that looked like mold. A city councilman’s staffer asked HUD officials to relocate the tenants. They did not.
“Here we go,” Ed wrote to his colleague who had forwarded him an email from the councilman’s office. He’d heard complaints about the property before. Almost a year to the day before the air conditioning set off the latest protests, he had visited Gabriel Tower. He had seen a disabled tenant who had been without a functioning tub or shower for 60 days. To keep clean, the tenant bathed in the sink. (Millennia did not respond directly to any questions about Gabriel Tower.)
On Dec. 9, the Kansas City Land Clearance for Redevelopment Authority — the city’s urban renewal agency that can grant tax incentives for development, as it had for Millennia — held its weekly meeting over Zoom. It had to decide what to do with Gabriel Tower. A representative from a firm hired to do mold testing explained the results: positive for mold, unable to determine exactly when it had come in.
Top Millennia executives and HUD officials, including Ed, tuned in. He did not speak much. When he did, he said: “We continue to work with Millennia, and they do respond to us.” His team worked with Millennia on multiple properties. Yes, there were challenges at Englewood. But many of them were not Millennia’s fault.
“We have a proven track record of doing this around the country. And in Kansas City, you can see our transformation work at Englewood Apartments,” said Millennia president Lee Felgar, his connection fading in and out. Gabriel Tower was 50 years old. They had a mountain of work to do in a rehab. They had the same delay Englewood suffered because the state had suspended its tax credit program. They had fixed problems the city pointed out.
“I’m having a hard time understanding what has occurred within the last four years to remediate any blighting conditions that would have existed when this project was approved,” said a City Council member. “And some of my concern here is that the repairs that have been made in the last month or so were because the LCRA stepped in and said, ‘We’re going to bring an inspector in, we’re going to have this mold testing done.’ ”
That, said Lee, was just not true. As a responsible owner, they would bring in funds to repair issues that the property couldn’t pay for on its own revenue stream. They did not neglect the property. It was, he repeated, an old building. Old buildings had problems.
“That’s what I’m trying to wrap my mind around,” said another city board member. “It seems OK, just listening to the conversation, it really seems that it’s a never-ending period of time to remediate the building. It just seems like it just keeps getting extended and extended and extended. And now, we’re talking about even more incentives to get the job done.”
Millennia’s local lawyer unmuted her mic. She made the same argument Millennia had made in response to HUD threatening action over the audit; to impose administrative action had the potential of slowing down the rehab everyone wanted.
The board could either declare Millennia in default by revoking its tax credit or wait to see if the company made improvements. Board members went into executive session. When they came back, they voted to hold Millennia in default.