Federal Inspectors come to Birchwood Apartments to check on complaints

 

Following a list of complaints from tenants living at Birchwood Apartments, USDA federal investigators paid a visit on January 24.

Tenants have complained about mold, bugs, electrical and plumbing issues, and for a time, no heat for a period this winter. The facilities washers and dryers are also in need of fixing. But things are turning around, although it won’t happen overnight, noted Lilean (Garner) Sedlacek, CCHS class of 1972, one of the owners and principal builders of the apartments who now lives year round in Michigan.

Sedlacek has spent the last week with a team of workers cleaning apartments, meeting with tenants to hear their grievances, and talking to folks like Cook County HRA Director Jason Hale, who is lending his assistance and knowledge to help.

Birchwood Apartments were built in 1992 at 801 W 5th Street in Grand Marais. There are 24 apartments between two buildings, an upper two-story and a lower two-story building. All of the units are one bath and either two or three bedrooms. The square footage of an apartment ranges from 768 to 930 square feet. While privately owned, Birchwood apartments are typically subsidized by the U.S. Department of Housing and Urban Development (HUD), Rural Subsidized Housing for Families, a project that offers government subsidies for rent payments.

“My partner David Reitter, who passed away several years ago, was an expert at building low-income housing. He had done it across the country, and it was needed here in Cook County, so we undertook it, but it wasn’t easy,” noted Sedlacek. “There was a lot of opposition to building housing for lower income families even though people cheered when senior housing was built. That confused me. At any rate, we paid the city market value for the property, and we paid about one million dollars to put up 24 units. We didn’t receive any grants, tax increment financing, or help from the county or city. For 32 years we have been able to provide low-income housing for Cook County families although it hasn’t always been easy to do.”

For a long time, D.W. Jones Management, Inc was the manager, but a new management company took over last September. The property owner/manager must follow USDA regulations, some of which weren’t followed. “I’m very disappointed in the last management team,” she said, adding her company has two claims against insurance companies and management companies.

“We are going to go ahead and start working on upgrading the facilities before any claims are settled,” Lilean said. “I want this to be a good place to live. This is my hometown. Whatever it takes, we will fix these apartments.”

Currently, bids have been received to redo the plumbing in the buildings. And a new property management team was hired. On February 1, 2023, Van Binsbergen & Associates, Inc. took over the management of the Birchwood Apartments. The company currently oversees 2,000 rental units throughout Minnesota, Iowa, Nebraska, Missouri, and Kansas, with its main office in Montevideo, Minnesota.

“They have an excellent reputation. I am very impressed with them so far,” said Sedlacek.

Out of the 24 apartments, five have been empty for some time. Lilean and her crew have two ready to go on the market, they are in pristine shape, and three need more work before they can be rented.

Because Birchwood gets assistance from the U.S. Department of Housing and Urban Development (HUD), the government directly funds owners who lower rents for low-income tenants. This type of affordable housing is specifically for individuals or families, with the rental cost determined based on the resident’s income. But that also means HUD provides oversight to how these buildings are kept up. For example, landlords must maintain the facilities in a decent, safe, and sanitary condition; make repairs within a timely manner when requested; not raise the rent more than once per year and with written notices well in advance; and abide by terms in the lease agreement, as with all other tenants. When some of these rules weren’t being followed, inspectors were called in.

Federal inspections were cut back during the covid pandemic but have since resumed. Lilean has already received the report from the January 24 inspection, and she noted the big item was leaky pipes, so fixing that and cleaning up water damage is tops on the fix-it list.

Cook County HRA Director Jason Hale has known about the problems at Birchwood for some time. With housing of all stripes hard to find in Cook County, low-income housing is especially tough to find. He and a group of community leaders recently met “to figure out what we can do and how to go about it. I have been working in the background for months to try to help with this situation, though the HRA has little legal or enforcement recourse. This has meant communicating and consulting with the County, USDA, the owner, developers, and funders to find a path forward. While it is a token issue compared to the litany of standing problems, we have found resources to replace the broken washer and dryer; Cook County Public Health and Human Services (PHHS) is spearheading that initiative.

“My main priorities have been and continue to be:

1) Assist with/encourage/ apply whatever pressure is needed (and that we can) to get critical issues addressed.

2) Work with the owner to sell the property to a qualified developer who will rehab the entire property and maintain affordability.

“As the property is privately owned and “overseen” by a Federal agency, these are no easy tasks. Still, we are coordinating efforts to push for change. While we do this, we are being cautious so that we avoid inadvertently causing any units to be condemned and tenants to lose their homes. It is, as you know, a really unfortunate and frustrating situation all around.

“Finally, regarding the Federal inspection, I have hope that the inspection will push USDA to put the property on a fast track for improvements, and I will continue to work on two different development tracks to try to provide a long-term solution for the property.”

“The buildings are old and tired, and I’m old and tired,” Lilean said. “They need some serious updating, and we are searching for help to get that done. This time around, we will need some help from the community. I point to the buildings when I get asked where all of the money has gone. It’s been spent there. No one gets rich by putting up affordable housing.

“Our team is working diligently to turn things around, and the new rental management company is much more involved. We are also building a team of subcontractors that are proving to be receptive to our needs. My partners and I will continue to work to make this a better place to live.”