Lincoln Foundation tax returns for Lincoln Apartments: 2008, 2009, 2010

Meeting minutes regarding a proposed deal between the Lincoln Foundation and Development Ventures Inc., a subsidiary of the Durham Housing Authority (pages 6–9 of document)

Eviction letter to tenants

The bathroom sink in Jaqueline Anderson’s second-floor apartment sags on the wall as if it could fall under the weight of a toothbrush. Her kitchen sink leaks into a pan beneath it. Cockroaches hide beneath the peeling floor tiles near the bathtub.

“I’ve asked them to fix things,” says Anderson, who has lived in Lincoln Apartments for four years. “But they never have.” Outside her front door, a smoke detector, its battery apparently dead, beeps overhead.

Anderson is one of about 50 rent-paying tenantsplus an unknown number of people squatting or living rent-freeat Lincoln Apartments, a cluster of cockroach-infested buildings on two acres along Lakeland Street in East Durham.

Built in 1967, Lincoln Apartments are privately owned by the nonprofit Lincoln Hospital Foundation, although it has not been affiliated with its namesake, an African-American hospital founded in 1901, for many years.

Now the foundation’s financial problems are forcing out low-income families with few affordable housing options.

Last week, the residents received a letter from Southern Real Estate Management & Consultants, which oversees the property, notifying them they must leave the apartment complex by Halloween.

“We’re unable to take in enough money to pay the bills, to provide the basic necessities,” Howard Williams, president of Southern Real Estate Management & Consultants, told Indy Week.

In addition, Williams says, the water will be turned off to all of the 150 apartments and the electricity cut to the common areas, such as hallways and stairwells.

The management company uses monthly rent collections, which range from $360–$500 per apartment, to pay for water and sewer (which is included in the rent), garbage service, electricity to common areas, security and other maintenance. Williams says that some months, as few as one-quarter of the tenants paid their rent.

“We’ve had a series of problems of people not moving in, not paying, of vandalism,” Williams says.

The office manager, Leila James, who is responsible for collecting the rent, could not be reached for comment. On Monday, a sign on the door stated the office was closed due to illness.

Earlier this week, tenants were discussing whether the management company could legally discontinue water and sewer service.

According to Vicki Westbrook, assistant director of administration and operations for the city’s utilities department, the city can cut off water and sewer to customers, even large apartment communities, who haven’t paid their bills. However, in large apartment complexes, the department “tries to work with management to set up a payment plan,” she says.

Should the utilities department discontinue water and service to Lincoln Apartments, “it would become a health and safety issue,” Westbrook says, and the Durham County Health Department would be notified.

Alta Green, 64, moved to Lincoln Apartments four months ago from Harnett County. The retired minister pays $500 a month for her three-bedroom apartment on the first floor, where she lives with her grandson.

She painted her apartment, which she keeps tidy, an eggshell color. Inside, she tends to her fish tank and a pet bird. A Bible lies open on a coffee table and a picture of Jesus hangs near the front door.

“It’s tough over here,” she says. “People are selling drugs, doing whatever they can do to get by.”

“I’m worried about the kids,” she goes on, as her grandson plays a snare drum with his friends outside. “I want these children to have somewhere to go.”

A losing battle

As a nonprofit, the Lincoln Hospital Foundation is exempt from paying property taxes. Still, in 2010, it recorded a $184,000 loss, according to the foundation’s tax returns. It listed $385,000 in revenuenearly all of it from rent paymentsand $569,000 in expenses.

The foundation listed among its expenses $139,700 in salaries and wages and $129,000 in bad debt. It paid $58,000 in water and sewer, $16,621 for electricity, $17,000 for maintenance supplies and $6,606 for garbage pickup.

In 2009, the foundation lost $79,500 on the apartment complex. In 2008, it reported a $188,000 profit.

The property is valued at more than $4.5 million, according to the Durham County tax office.

The foundation has sought private investors to buy the complex, even offering it for $10 to DVI, a subsidiary of the Durham Housing Authority, according to DHA meeting minutes. Every investor, including DVI, refused the propsed deal, Williams says.

Foundation board president Larry Suitt did not return a call seeking comment.

Dallas Parks, CEO of the housing authority, says while the neighborhood is an area targeted by DHA to develop additional housing, the liability and risk were too great to buy the property.

The apartments likely contain hazardous materials, such as lead-based paint, which were commonly used in the 1960s and 1970s. DHA would be liable for cleaning up the area, which, depending on what materials and cleanup were involved, could run upward of $1 million.

These low-income residents, many of them families, have few housing options. The voucher program through Section 8 is closed with a waiting list of 2,300. Of the 2,734 vouchers, turnover is less than 200 a year.

The wait list to move into one of the 1,850 public housing unitssuch as those in MacDougald Terrace, adjacent to Lincoln Apartmentsis 1,200.

Sherman Steele moved to Lincoln Apartments four months ago, after he was forced to move from a previous apartment when the building’s owner went into foreclosure.

“I just came out of a similar situation,” Steele says. “This is ridiculous.”

This article appeared in print with the headline “Forced out.”