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M E M O R A N D U M TO: Ernest R. Clazk, Interim City Manager FROM: Lisa A. Wright, Director of Community Development SUBJECT: Casa Bonita Apartments DATE: June 21, 2007 Background Information According to the deed records of the Lamar County Clerk, it appears that the complex now known as Casa Bonita first came into existence azound 1970 when the property was sold from Wray and Myrtle Wible to the Olive Branch Apartments Charitable Trust. Accompanying the deed to the property was a mortgage insurance agreement between Olive Branch and the U.S. Departrnent of Housing and Urban Development (HUD) in the amount of $3,284,400.00 for construction or renovation of the complex under the condition that the owners lease the property to low or moderate income tenants. In the late 70s, the property was under the ownership of Nick Kazakoff and Edwazd D. Seidle Holdings, Limited, but was sold in mid-1982, after a tornado destroyed a handful of its buildings, to Joe Wood and Paul Cheatham. T'hey, in turn, sold the property to Casa Bonita Apartments Limited, an Illinois general partnership, in late 1982. During this period of ownership, the apartments were enrolled in a rental assistance program through the Ark-Tex Council of Govemments. In 1992, there was correspondence whereby the owner was working with individuals who had expressed interest in purchasing the property to develop alternative housing for convicts and ex- convicts; however, that transaction obviously did not occur. In that correspondence, there was mention of requests for additional HUD funding to renovate the buildings by the then owner, but the funding was never awazded because of some issues HUD had with the project. It is unknown exactly when the apartments stopped operating entirely; however, records indicate that the property was struck off to the taxing entities, in caze of Paris ISD, in September 1996. It was then sold in July 1997 to D&W Development Company, and Code Enforcement files reveal several code enforcement actions during this period, with over $10,000.00 being spent by the City to clean up the property. It was again struck off to the taxing entities, in care of the City of Paris, in Mazch 2004. The City again spends thousands of dollazs annually mowing and cleaning the property. Recent Activitv In early 2006, I met numerous times with a developer who expressed interest in demolishing the Casa Bonita Apartments to potentially build a housing development. After several months, the developer determined that the cost of demolishing the structures made the project non-feasible. In order to get a better estimate of exactly what we were dealing with, in June 2006, I commissioned Brady Environmental Services, Inc. to perform asbestos surveys on two of the most damaged structures in the Casa Bonita complex. During this period, the Community Development Department was in the process of having numerous substandard structures demolished throughout the city, and, because Casa Bonita has been a blight to the area for over twenty (20) years, it was my hope that I could begin demolishing at least some portion of the complex annually using budgeted funds. Although progress would have been slow, at least it would have been progress.