Under Contract: Sale pending for Market North Apartments

Development firm working to purchase Florence-damaged complex
Updated: Jun. 21, 2019 at 3:47 PM EDT
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WILMINGTON, N.C. (WECT) - Market North Apartments is expected to be sold early next month, according to a top official with the Seattle-based company working to purchase the property, ending months of speculation about the hurricane-battered property’s status.

Property management shuttered the property after Hurricane Florence severely damaged many of the complex’s 204 Section 8-subsidized rental units, displacing more than 700 residents.

The complex, currently owned by California-based Foundation for Affordable Housing, has remained closed since the September 2018 storm, and slow progress on repairs fueled rumors it would be sold and redeveloped into high-end apartments, like other nearby apartment complexes.

After months of insisting the property would not be sold, Brandon Moody, a spokesman for The Foundation for Affordable Housing explained the company’s decision to sell.

"Insurance complications and speed of repairs made it necessary to pursue a sale of Market North. We believe this outcome is best for all parties involved. We have complete confidence that the new ownership group and HUD will maintain Market North as an affordable housing property. We know VITUS will do an excellent job as they rehab the property and begin to move residents back in,” Moody wrote

Scott Langan, Principal/Director of Development for Vitus, a housing real estate developer with offices in Seattle and New York, said on Thursday the company expects the sale to go through early the week of July 8.

Addressing community concerns, Langan said the property will still have a Section 8 Housing Assistance Payments Contract to “preserve affordability and protect the residents long term."

“We’re waiting for HUD (U.S. Department of Housing and Urban Development) to finish up some paperwork, Langan said. “We expect rehabilitation of the property to start right after [the sale is finalized].”

Langan explained rehabilitation wouldn’t just be limited to fixing exterior and interior portions damaged by the storm, but “all new everything,” including appliances in the units.

“We want [Market North residents] to not only have their homes again, but something new and sustainable,” Langan said. “We want them back and we want them happy.”

But some former residents are skeptical about these claims after feeling they were lied to for the past nine months.

“I knew it was going to happen. So I didn’t get my hopes up. And I’m still not getting my hopes up because I think they’re still lying to us,” said Lenore Benbow, former president of the Market North Residence Council.

Benbow decided to move to a different location and says she will not move back to Market North, but said many of her friends and neighbors are still believe they will be able to move back.

“Most of them are. And I hope that they are able to go back but if they do go back I don’t think things are going to be the same. I think the rent is going to go up,” Benbow said. “I want them to tell the truth. I want to hear them tell the residents that they sold. And I just want to know the truth. Are they going to raise the rent or not? I’m pretty sure they are. I think when the residents do go back in the rent is going to be to high for them to even afford it.”

Vitus plans to rehabilitate the complex in phases, according to Langan, with the first 30 units expected to be move-in ready by September of this year. Langan said the goal is to have 30 units rehabilitated each month after that, with the property 100% completed by March 2020.

“We’ll be working with a relocation company to coordinate moving Market North’s residents back in when their unit is complete,” Langan explained.

Benbow feels the damage sustained from Hurricane Florence will not be an easy fix.

“They’re going to have to tear them down. And it’s going to be later than they expected. I believe because of all the mold and mildew from all the rain and bad weather we had, the apartments are worse inside,” she said.

Most of Market North’s tenants have their rent subsidized by the federal government’s Section 8 housing programs. For those not in a federal program, Langan said future rent increases are possible, but would not come immediately after the property reopens.

Langan said Charlotte-based AHI Development has assisted Vitus with the purchase.

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