HUD suspends Millennia. What’s next for Serenity Towers as court considers takeover?

MEMPHIS, Tenn. — Attorneys for the owners of the troubled Serenity Towers are due back in Shelby County Environmental Court on Tuesday, March 19th for a special hearing that would put the company a step closer to possibly being stripped of its power at the senior high rise.

It’s a legal process that’s fairly rare, but if it happens, it would coincide with the company potentially being banned from the federal housing business because of how much taxpayer dollars.

WREG visited Serenity Towers recently where longtime resident Robert Nichols pointed out the fact that one of the glass panels on the automatic front doors is missing. It’s difficult to see from the sidewalk, so much so that Mr. Nichols turned his body and pointed during our conversation.

“When that door shut, that second door, you see that,” asked Nichols.

“That’s a empty glass. That glass been out for two months,” Nichols added.

News Channel 3 was told the glass was on back order and should be replaced soon.

But for Nichols, it represents the loss of a sense of safety at the taxpayer-funded towers for seniors.

He said, “You pay rent for security really, somewhere, where you, you up in age, and ah, you ain’t safe!”

There was a shooting at the complex in November.

Man shot at Serenity Towers after argument

Records show police have been called to the complex recently for reports of aggravated assault, simple assault, theft, and intimidation.

One resident told WREG he was pepper sprayed by a squatter.

Another senior at Serenity texted one of the WREG Investigators early one weekend morning.

It read, “Please help me move, I now have bed bugs, I don’t want to die like this.”

Safety and security at Serenity came up again at an Environmental Court hearing in late February as attorney Marcus Ward provided an update on the progress of ongoing code violations at the complex.

The court appointed Ward as Special Master several months ago, a neutral party, to work with Serenity’s owners and code enforcement to resolve nearly two years’ worth of violations.

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“We want to have a plan in place for every issue that occurs,” Ward explained during an interview with the News Channel 3 Investigators.

Ward said one of the goals at Serenity is to help the company in charge, Millennia, establish a maintenance plan at the property that’s currently for sale.

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Ward and inspectors from city and county code offices conduct frequent inspections at Serenity.

Ward told the NewsChannel 3 Investigators Millennia’s been cooperative, but says they need more done and faster.

“We’re here for the residents and if that means going above and beyond Millennia to get to where we need to be, that’s what we’re going to do,” said Ward.

Not long ago, Ward requested a show cause hearing from Environmental Court that’s set for March 19th.

He explained the hearing requires Millennia’s attorneys to show why the property shouldn’t be placed into court receivership and out of its hands.

Receivership requires a judge’s order.

If that happened, it would mean Millennia and its affiliated entity which currently owns Serenity, would be stripped of its duties at the property and the court would put someone else in charge.

Ward told News Channel 3, “My concern is always in the present and right now the concern is that you have a development that is not providing service its tenants need.”

After Serenity failed its latest federal inspection, the WREG Investigators uncovered records revealing HUD referred the property to its Departmental Enforcement Center.

A spokesperson told NewsChannel 3 that the DEC team was sending the owners a Notice of Default and would determine enforcement action.

The NewsChannel 3 Investigators have put in numerous interview requests with HUD and spent years pressing the agency about its oversight and response to the conditions at properties like Serenity.

We recently spoke with Walter Perry who is the Tennessee Field Office Director for HUD about the ongoing violations at Serenity Towers and the agency’s responsibility.

He said, “When things are brought to our attention, we want to do something about it.”

The News Channel 3 Investigators asked Perry, “How does HUD let it get to that point with that private owner?”

Perry responded, “We do inspections and we also receive concerns from residents, so when something comes into us as in elevators being down, we reach out to the management agency and say, what’s going on?”

WREG then asked, “Is there a need for swifter action?”

Perry replied, “If we are aware of something, we have a project-based contract administrator that handles the concerns on maintenance and operations but if that is not receiving a timely response as you say, we need to know about that at HUD and we’ll reach out and find out where’s the status.”

News Channel 3 has also learned after years of documented violations at its properties across the country, like conditions we’ve exposed in Arkansas, Mississippi, and Georgia, HUD is now taking major disciplinary action against Millennia.

Problems at Millennia properties extend beyond Memphis

HUD is suspending the company, immediately prohibiting it from doing new business with them and any other government agency.

According to a statement from HUD Deputy Assistant Secretary Ethan Handelman, Millennia “exercised financial mismanagement of tenant security deposit accounts and taxpayer funds providing housing assistance.”

HUD is also demanding Millennia repay those “misappropriated funds” and hitting the company with a civil money penalty.

HUD leaders also want to bar Millennia from federal government business for five years. However, the agency makes it clear Millennia must continue to address repairs and maintenance issues at its properties.

A Millennia spokesperson sent WREG the following statement on the matter:

“Millennia is aware of HUD’s concerns and has taken action to address them while supporting a business model through increasingly challenging economic conditions.  HUD’s statement does not affect the daily operations of a property and Millennia remains steadfast in its fundamental commitment to delivering quality affordable housing.”

Meanwhile, at Serenity Towers, Nichols says he isn’t holding out hope that anything will change soon.

WREG asked, “So then what are you looking forward to?”

Nichols said, “Moving out from here!”

As for the sale of Serenity, Millennia says it’s still looking for a buyer who will be able to use the plans already established to complete a renovation at the property.

The suspension from HUD isn’t the first time Millennia’s finances have come into question. Late last year, the Tennessee Housing and Development Agency pulled its support from Millennia’s deal to finalize the purchase and rehabilitation at Serenity. A source close to the deal told the WREG Investigators the agency simply didn’t trust Millennia’s financials.

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