Durham’s JFK Towers Owner, Millennia, Restricted by HUD

Unsafe living conditions at North Durham’s JFK Towers apartment complex made headlines this past summer, with complaints including sewage filled bathtubs, widespread trash pile ups and breeding maggots, broken AC and heating units, and inoperable elevators. JFK Towers is an elderly living, low-income facility. All tenants have housing vouchers, and 12 units are designated for mobility-impaired residents.

Now, the United States Department of Housing and Urban Development (HUD) has found Cleveland-based Millennia Companies, owners of 177-unit JFK Towers and 159-unit Naples Terrace, to have practiced consistent financial mismanagement. Millennia is barred from entering any new contracts with government agencies. 

Issues at Millennia properties have been reported across the country. In September, tenants at a Millennia property in North Little Rock, Arkansas filed a $5 billion class action lawsuit against the company after a gas explosion killed three residents the prior fall. In August 2022, a mother and daughter were killed following a gas leak at a Millennia property in Cleveland, Mississippi. A 2019 gas explosion at a Millennia property in Jacksonville, Florida hospitalized seven residents.

Durham’s Neighborhood Improvement Services Department’s (NIS) inspections at JFK Towers in late July and early August resulted in 55 open cases and 157 open violations. Residents of JFK Towers spoke at an August 7 Durham City Council meeting about hazardous living conditions, repeatedly stressing the need to hold Millennia accountable, and the limited options facing low income disabled and elderly Durhamites. 

Almost half a year later, many of the problems that put JFK Towers on the local news, and brought its residents to City Hall, remain present. Residents confirmed recent flooding, widespread bedbugs and cockroaches, renovated units unfit for disabled residents, and a front door that has been broken long enough to warrant mention in Durham’s January 2 council meeting.  

“I have a tenant right now in my resident advocacy group that cannot fit her shower chair in her bathtub,” JFK Towers tenant Phyllis Bryant says. “She cannot reach her shower head because she’s petite. And she’s bathing by throwing basins of water over her head.” 

Bryant adds that Millennia “actually put the stove in a handicap unit out of reach of the fire sprinkler. With no thought that that is the main source of fire in a unit … Millennia told our attorneys and told code enforcement, when asked about what they’d do if all the elevators go down, they said they would install a chairlift in the fire exits, in the fire stairwell.” 

Bryant’s current concerns regarding fire hazards mirror resident testimony from August’s council meeting, where resident Johnetta Alston spoke about fire alarms not working. 

“[On] Saturday JFK was on fire, but guess what? The alarms were turned off. By the time the residents on the third floor got down outside of the building—no fire trucks,” Alston said. “They had to call on their phones to get the fire trucks there, because the smoke was billowing in the hallway.”

Over two months after Alston’s testimony, an October Quadel-MOR report—a review designed to assess the safety and efficacy of affordable housing projects—found the fire alarm panel unplugged, thereby unable to trigger alarms or contact the fire department. The INDY asked Millennia about fire hazards at JFK, in light of other fatal incidents at Millennia properties, and received the following response:

“Millennia assures the community that prompt action has been taken. The unplugged fire panel has been successfully repaired, and as part of the ongoing rehabilitation project, Millennia is in the process of ordering and scheduling the installation of a new fire panel as the safety of residents is a top priority.”

The same Quadel report faulted Millennia for having “no effective preventative maintenance program for the property… There was no evidence of periodic [unit] inspections in the files audited… The property is not fully staffed with maintenance personnel.” 

Still, HUD’s recent actions against Millennia were not spurred by unsafe living conditions but by alleged financial mismanagement. 

“HUD found that Millennia Housing Management exercised financial mismanagement of tenant security deposit accounts and taxpayer funds providing housing assistance,” HUD wrote in a statement to the publication Atlanta Civic Circle. “The company and its president are immediately prohibited from entering into new business with any federal government agency, including HUD, and HUD is taking steps to bar Millennia CEO Frank T. Sinito and the Millennia Housing Management from all federal government programs, including the Section 8 program, for five years.” 

According to Millennia’s website, Millennia houses more than 86,000 people in 280 properties across 26 states, with a specialization in affordable and senior housing. As of 2021, the company was receiving more than $137 million a year in federal subsidies. 

Millennia overtook management of JFK Towers from embattled developer Global Ministries in 2019 and formally purchased the property in 2022. Global Ministries began selling off all of its subsidized housing portfolio in 2016 after intense political scrutiny from HUD over living conditions and financial mismanagement, culminating in an August 2016 raid  of Global Ministries offices in Cordova, Tennessee. According to an April 2022 letter from Millennia, the company had purchased more than 5,000 units of housing from Global Ministries’ portfolio. 

Affordable housing projects are appealing to investors due to low interest loans, Low Income Housing Tax Credit programs, long housing waiting lists ensuring ample tenant pools, and federal rent subsidization through housing choice vouchers.

Of the $35.35 million Millennia spent to acquire and renovate JFK Towers, $17.53 million in tax-exempt bonds came from the North Carolina Housing Finance Agency (NCHFA), $10.14 million came from Federal Low Income Housing Tax Credits (LIHTC), and $1.5 million came from the City of Durham. 

This financial breakdown allows developers such as Millennia to reap healthy profits, on money loaned by the public, with government-subsidized rents from low income tax-payers. Millennia’s tax application to the NCHFA shows a planned income of $2,272,680 annually achieved by renting out the 177 units at $1,070 per month.

Durham taxpayers’ $1.5 million loan to Millennia for the construction was part of the city’s Forever Home, Durham program, a $160 million initiative born of Durham’s 2019 affordable housing bond. As INDY previously reported, Forever Home, Durham presentations had marked JFK Towers’ 177 units as renovated and restored in April, and repeated the assertion in an August presentation, after stories had broken regarding living conditions at JFK Towers. 

Durham Community Development Director Reginald Johnson clarified that the $1.5 million loan from the City of Durham, closed in February 2023, acted as stop gap financing to help Millennia pay off debt associated with the JFK Towers acquisition. 

Johnson described the process for receiving Forever Home, Durham funding as “competitive,” and that the loan from the City of Durham stipulates an affordability period of 30 years for all of JFK’s units, a key factor in awarding the loan. 

“One of the things that we were interested in was making sure that it was preserved as affordable housing,” Johnson says. “We didn’t want to risk losing that in the Durham community by having it go market rate.” 

However, NCHFA Executive Director Scott Farmer confirmed that the 30-year affordability period existed before the city’s $1.5 million loan (approved in February 2023), and was stipulated as part of Millennia’s tax exempt bond with the NCHFA (approved in January 2022). 

Even leading up to 2022, before the approval of the NCHFA’s tax exempt bond, or Durham’s loan, evidence of Millennia’s mismanagement was public. Most notably, a 2021 investigative series from the Houston Chronicle titled “Living Hell” documented Millennia properties around the country. The series detailed unpaid bills on behalf of Millennia, consistently hazardous health conditions, managerial misconduct, and a consistent failure on behalf of agencies, from the local to federal level, to hold Millennia accountable. 

A more recent Fox13 Memphis investigation in August discovered hundreds of thousands of dollars in liens filed against Millennia by unpaid contractors across the mid-South. As of January 9, Millennia’s Google profile shows 33 separate reviews from contractors and vendors alleging unpaid invoices. When asked if Millennia had any unpaid outstanding invoices for work completed in Durham County, defined as work billed on or before December 15, Millennia said “it is inaccurate that Millennia does not pay its contractors” but did not provide a direct answer regarding contractors in Durham.

While HUD’s statement limits Millennia’s future actions, it offers no course of action for current Millennia tenants. Tenants and advocates at August’s city council meeting painted a grim picture of living in deplorable conditions, but with rising rents across the city combined with the realities of being elderly or disabled, there are few options of where else to go.

“This is a long-going situation in Durham as it relates to our seniors of low means. JFK has been experiencing problems for a long time,” Durham resident and former city council member Jacqueline Wagstaff said at the August meeting. “It’s hard on residents when they’re under the thumb of the government, and their housing is reliant on that, to actually be brave enough to come out and stand up. I’m happy that these residents have come out tonight.”

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