Downtown Orlando Foreclosure means new owners for troubled apartments
Time has run out for the owners of notoriously run-down apartments in west Orlando: Their bankruptcy case has been thrown out, OUC shut off their office’s electricity last week and now most of their properties have been foreclosed on by Fannie Mae.
But bad news for companies controlled by father and son Salomon and Jim Yuken of Miami could be good news for tenants. City officials and neighborhood leaders hope Fannie Mae, with its deep pockets, will finally renovate apartment complexes in such disrepair that they’ve racked up more than $4.8 million in code-enforcement fines.
“This is a victory for the west-side community,” said David Rucker, president of the Washington Shores Area Association. “If Fannie Mae has the property, we’d like them to fix them up because we know they could do a nice job. And if they don’t, we’d like them to sell them to someone who will. We just want the eyesore taken care of.”
A spokesman said Wednesday that no tenants face eviction.
Before the foreclosure, companies controlled by the Yukens owned 11 apartment complexes with 790 units in Orlando. The boxy, concrete-block buildings are mostly along Orange Center Boulevard and Mercy Drive.
But the Yukens hadn’t been making mortgage payments to Fannie Mae on seven of those complexes. On Monday, the foreclosure sale went through on six, and the seventh is scheduled for next month.
The foreclosure includes the largest of the complexes, Washington Shores Village Apartments, with 256 units in 35 buildings that sprawl along Orange Center Boulevard.
The Yukens will apparently still control four complexes not part of the foreclosure. Jim Yuken did not return a request for comment.
The Yukens had talked of a $45 million renovation since buying the properties in 2007 but were not able to obtain the government-backed financing they needed. Instead of a renovation, the apartment buildings got worse: leaky plumbing; broken windows; electrical problems; mold; and crumbling, unsafe stairways.
“They’re in pretty poor condition,” said Mike Rhodes, code-enforcement manager. “They’ve neglected the properties for a while, and a lot of them have pretty significant water damage from plumbing leaks.”
The Yukens tried to stop the foreclosures and hold off a string of other creditors — including the city, seeking to recoup code-violation fines — by filing for bankruptcy protection. But two weeks ago, U.S. Bankruptcy Judge Robert Mark rejected the reorganization plan, which was opposed by both Fannie Mae and the city, and dismissed the case.
They also hadn’t been paying utility bills, which have climbed to about $65,000. On Thursday, Orlando Utilities Commission shut off the electricity at management offices on Mercy Drive, hoping to convince the business to stop ignoring the bills.
Given the Fannie Mae foreclosure, OUC spokesman Tim Trudell said there are no plans to turn off power or water in tenants’ apartments or common areas. Fannie Mae will be considered a new account with no debt, and OUC will try to collect from the Yukens’ companies.
“At this point, we’re not moving forward with any kind of disconnection,” Trudell said.
Tenants said they’re worried about how they’ll be affected by the foreclosure. Quanesha Gatewood, who lives in the Bordeaux complex, said a building manager last week pressured her to pay rent immediately.
“She insisted that I could pay the rent Friday; I had to pay it right then,” Gatewood said. “The next day, they were gone. The office is locked up, there’s nobody in there and the power is off.”
Wanda Griffin, who has lived in Peppertree Circle apartments for eight years, said managers have told residents who asked about the foreclosure that nothing is wrong.
“Nobody has told us anything,” she said. “I just don’t want anybody to come kick us out without anywhere to go.”
Fannie Mae spokesman Andrew Wilson said that won’t happen.
“We foreclosed on the owner of the building; the tenants didn’t do anything wrong. The leases will be maintained, so nobody will be out on the street,” Wilson said.
Another Fannie Mae spokeswoman said tenants can expect to hear from new managers soon. Once the government-sponsored lender takes full legal control of the property — a process that in Florida takes 10 business days after a foreclosure sale — Fannie Mae will assess what repairs are needed.
Rhodes said he was encouraged.
“We’ve seen Fannie Mae take possession of other properties in the past,” he said. “Where they’ve done it before, they’ve turned them around in pretty short order. Hopefully they’ll do that here.”