New Cheney Flats to get new ownership, remain affordable

Toledoans Kevin and Ambrea Mikolajczyk, who recently purchased the Uptown Arts Apartments, also are poised to buy neighboring New Cheney Flats.

By Sarah Elms / The Blade
Tue, 03 Dec 2019 20:23:50 GMT

A local couple is poised to purchase a second affordable housing complex in Toledo’s UpTown neighborhood in a move that helps the current owner avoid potential foreclosure and protects current tenants.

The New Cheney Flats, at 1602 Adams St., is a 65-unit complex built in the early 2000s by developer Bruce Douglas with help from city funding and tax credits. He sold the complex to Michigan resident Vernon Amye, who is now looking to sell to Torrey Hill Apartments Two, LLC, run by Toledoans Kevin and Ambrea Mikolajczyk.

The 15-year affordable housing tax credit is expired, which means taxes on the property will jump from about $4,500 a year to $65,000.

“Taxes are going up, the bank is not renewing the loan, so they’ve got to sell it,” said Rob Keleghan, the real estate broker representing the seller. “And we don’t want it to go into foreclosure and then have all these people displaced.”

The Mikolajczykes in March purchased the 52-unit Uptown Arts Apartments a few blocks away from New Cheney Flats, an affordable complex also developed by Mr. Douglas in the early 2000s. The property was in a similar situation, with property taxes expected to jump from about $5,000 to $50,000 annually because of an expiring 15-year tax abatement.

Mr. Douglas said he couldn’t afford to keep the property, and there were months of back-and-forth with Toledo City Council over whether they would forgive the $500,000 loan issued toward the property’s development. City officials ultimately agreed to forgive the loan and transfer the city’s land ownership to Mr. Douglas so the sale could proceed in exchange for $300,000.

The loan was funded through federal HOME Investment Partnership Program dollars, which the city receives annually and distributes to qualifying projects.

The city also issued a $500,000 loan to help the New Cheney Flats develop, and officials are asking city council members to agree to forgive $352,500 of it, as well as release the city’s ownership of the land on which the apartments sit. In exchange, the property owner would pay back $147,500 of the HOME loan and $81,500 for the land.

The Mikolajczykes said they’ll commit to keeping seven of the 65 units affordable to tenants earning less than or equal to 50 percent of the area median income through 2032. The other units will be a combination of market-rate, 80 percent of the median income, and 60 percent of the median income, Mrs. Mikolajczyk said.

She said affordable housing in UpTown is limited, especially at 50 percent of the area median income.

“To keep some at that price point is a win for everybody,” she said.

Amy Sackman Odum, the city’s director of neighborhoods and business development, endorsed the deal during Tuesday’s city council meeting.

“I think that we have come to a good conclusion for the community and for the tenants at this property to keep this in low- to moderate-income rental status and assist in releasing this to a local buyer who does have a good history of property management in the community,” she said.

The Uptown Arts deal received a lot of push-back from councilmen, but none spoke in opposition this time around.

Councilman Gary Johnson asked to see a copy of the proposed purchase agreement, while Councilman Yvonne Harper said she was “excited” for the deal to move forward.

Mrs. Mikolajczyk said it makes sense for her business to purchase the apartments since they’re so close to the Uptown Arts units. She added she wants to be a part of improving the UpTown neighborhood.

“I live in the same ZIP code,” she said. “We love when Toledo succeeds, and to be a part of continuing to move the needle forward and make great places, affordable places for people to live in, it’s great to be a part of.”

City Council could vote on the deal as soon as Dec. 10.

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