Troubled Ypsilanti Township apartment complex heading into foreclosure
A troubled Ypsilanti Township apartment complex is scheduled to reach the sheriff’s sale stage of foreclosure on Thursday morning, raising questions about its future ownership.
Already, township officials said, they have concerns about the condition of the 300-unit Tuscan Creek Apartments.
“There appears to be extensive property maintenance issues in the complex,” said Mike Radzik, police services coordinator for the township.
The property is located on Stevens Drive, between Mansfield and Hewitt roads off of Congress. The complex, built in 1975, sits on 30 acres.
Many in the area will remember the complex by its previous name: Cobble Creek. Over the years, it often has had a reputation as unsafe, based on reports of criminal activity there. More recently, it gained attention when Ann Arbor officials moved many residents of the city’s former Y to the complex when the Y was demolished.
Today, the complex seems to have stabilized on the crime front. Yet concerns in the township persist over the condition of the property.
And now both ownership and management could change as a result of the foreclosure.
No one connected to either ownership or management would comment for this article, despite repeated attempts over recent weeks.
At issue is $17.2 million in debt dating from 2006, representing almost $57,000 per unit. The loan originated with GMAC but now is held by a unit of Capmark Financial Group - which has its own issues, since the company and some subsidiaries filed for bankruptcy.
Unclear is what the foreclosure could mean to most parties involved - from the management company and its employees to residents.
Most people involved with apartment foreclosures tend to strive to keep the property functioning to preserve cash flow and reputation.
In the case of Tuscan Creek, the property already is on the township’s radar for other issues, said Radzik.
A fire in September damaged an entire building on the property and it remains unrepaired.
“Our attorneys have been actively working with the owner and insurance company to do something with the burned-out shell of a building,” Radzik said.
“We’re not happy with the fact that this burned out building continues to sit there.”
Another recent issue involved raw sewage seeping into basements of buildings there, Radzik said.
“We were able to get voluntary compliance (to fix it) through management,” he said.
KMG appears to still be leasing the apartments. Two units are listed as available on the KMG website and staff remains onsite. Rent is listed at up to $750 for a two-bedroom apartment and an open waitlist for Section 8 subsidized units.
According to Michigan Housing Locator, the 300-unit complex was built in 1975. It was sold to an entity related to the current owners in 2004 for $9.25 million.
And the township now assesses it at $3.5 million, down from $4.1 a year earlier. Based on those numbers, the estimated market value is about $7 million.
Meanwhile, a check with the county shows that the property is up to date on its taxes, with a $157,780 bill due on Saturday.
If the sheriff’s sale goes as scheduled, the owners will get six months to redeem the property for the full amount of the outstanding loan and all associated fees. After that, the lender - who presumably would be the only bidder on the loan - will be able to sell it.
And in the meantime, the township and residents will have to hope that the property doesn’t languish - or, in the case of the fire-damaged building, deteriorate further.