CINCINNATI — For months, George Smith and his neighbors lived in fear over the fate of their senior living facility, the Alexandra Apartments in Walnut Hills.
The facility, an affordable housing space on William Howard Taft Road, had been in foreclosure since 2019 once the previous owner defaulted on the mortgage. Since then, residents worried the next owner would jack up apartment rates due to the gentrification in the neighborhood. For the dozens of elderly and disabled people living there, being forced to leave would have been a devastating loss.
“We’ve been here a long time,” Smith said. “This is home. Everybody knows everybody. Everybody helps each other.”
But when Smith received a call from Samantha Reeves, the executive director of the Walnut Hills Redevelopment Foundation, the residents’ worries were put to rest. On April 2, the foundation had succeeded in stopping the Alexandra’s foreclosure through partnering with the Model Group to pay off the building’s dues and assume full ownership. The deal agreed to in court by the redevelopment foundation and a number of entities involved with the case mandated that the Alexandra would remain affordable for another 13 years.
Hearing the good news will go down as a memorable milestone in Smith’s long, full life.
“It was one of the happiest days, though that I've had for a while because we've been so worried about where we were going to live, and how we were going to get the money to relocate,” Smith said.
The Walnut Hills Redevelopment Foundation had been trying to stop the foreclosure and gain ownership of the Alexandra for over a year. The battle was so hard-won that Reeves fought back tears as she reflected on the organization’s victory in saving the homes of nearly 100 at-risk people.
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“Who would we be if we couldn't protect the most vulnerable?” Reeves said. “We have to protect those legacy residents. We have to protect existing affordable housing.”
The redevelopment foundation had already been a stakeholder in the Alexandra since the property was rehabilitated as a senior living facility with 85 units in 2004. At the time, the foundation joined forces with the Miller Valentine Group, a construction and real estate company, to form the Alexandra Limited Partnership. The partnership served as a limited liability company through which the Alexandra was re-established as an affordable housing space. Miller Valentine Group was the primary owner of the Alexandra and was in charge of its maintenance. The foundation, on the other hand, was the secondary noteholder, and passed through funds toward the Alexandra’s Low-Income Housing Tax Credit from the state.
By December 2019, MVG owed US Bank $500,000 on the Alexandra’s mortgage and defaulted. After this, US Bank sold the note to Fairview Loans IV LLC, an investment firm based in Seattle. Fairview Loans immediately foreclosed. In response, the redevelopment foundation leveraged its demonstrated interest in the Alexandra and its role as a secondary mortgage holder to exercise its right of redemption over the property and end the foreclosure.
The Walnut Hills Redevelopment Foundation was ultimately granted ownership of the property once a Hamilton County Court judge approved of a deal reached by: Miller Valentine Group, the redevelopment foundation, Fairview Loans, the city of Cincinnati, the Ohio Housing Finance Agency, the Alexandra’s Residents Association and the Legal Aid Society of Southwest Ohio, the legal entity representing the Alexandra’s residents in court.
The redevelopment foundation formed a relationship with the Model Group to achieve the acquisition; to do this, the Model Group helped the foundation get a loan from the Ohio Capital Finance Corporation's Cincinnati Neighborhood Transformation Fund. Fairview Loans was paid off for filing the foreclosure. The Model Group also paid legal fees and all of the costs associated with the foreclosure, then took on existing loans and obligations tied to the building. Ultimately, $650,000 was paid to stop the foreclosure.
“The best urban revitalization efforts should include a mix of uses and a mix of housing for different incomes. And I think this is a really key piece of that,” said Bobby Maly, CEO of the Model Group. “This is a key affordable, senior piece that is hard to replace. So we're excited to have it.”
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In addition to maintaining the property, it is expected that the Model Group will eventually acquire full ownership of the Alexandra from the redevelopment foundation and lead significant renovations in the long-term future. It is uncertain when those renovations will take place but residents may have to be put in temporary housing while major improvements are being made to the building. Reeves said that despite intervening to take the Alexandra out of foreclosure to advocate for its residents, the Walnut Hills Redevelopment Foundation is not set up to own a large scale housing development and still will not be involved with the management of the property.
“We definitely see it as our role as a neighborhood CDC to take these critical risks and make these critical investments similar to how we bought the former Kroger building for a large sum of money,” Reeves said. “So whenever we can insert ourselves and preserve assets and protect the neighborhood, that's where we step in.”
Advocates say preserving affordable housing in revitalizing neighborhoods like the Alexandra has larger implications for the city of Cincinnati. Doing so strengthens the precedent for protecting low-income housing in upscaling areas.
“It’s important to add to the amount of affordable housing that's in that neighborhood so we end up with a neighborhood that is good for everybody and does not result in gentrification or displacement,” said John Schrider, the director of the Legal Aid Society. “And that's always been the concern of the residents at the Alexandra.”
Smith said he looks forward to the future decades he expects to stay in the building and is grateful to the redevelopment foundation and the Model Group for taking up the cause.
“I feel like what I saw is that there are some people that cares,” Smith said. “That there are people who wants the same thing, equality for people: Black or whatever color.”
Monique John covers gentrification for WCPO 9. She is part of our Report For America donor-supported journalism program. Read more about RFA here.
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