A new ownership group, Premier Properties of Lakewood, will invest $25 million in the decades-old complex, but allegedly spoke of ‘re-tenanting’ it to address security issues.
By Matt Skoufalos | December 28, 2021
For the fifth time since 1996, the largest residential property in Collingswood has been sold to a new ownership group.
The Parkview at Collingswood, a massive, four-building apartment complex that houses between a fifth and a quarter of the borough population, will become the property of Lakewood-based management group Premier Properties at the end of the year.
Current ownership group, Morgan Properties of King of Prussia, Pennsylvania, which bought the complex for $80 million from prior owners Greystar of Philadelphia in 2017, is flipping it to Premier just four years later at a sale price of $120 million.
As part of the transaction, Premier also sought to carry over the 35-year Payment in Lieu of Taxes (PILOT) agreement attached to the Parkview. The agreement, which dates back to the original redevelopment project that helped bring the property back from the brink of bankrupcty, will enter its 27th year next month.
In exchange for a reduced overall tax payment, the PILOT agreement frees up capital for property owners to reinvest in the facility. Total tax payment on the Parkview is $1.6 million annually; today, the property generates 60 percent of its assessed value in local revenues.
That figure will climb again in 2022 given the increase in the assessed value of the property pursuant to the sale, and within the next two years, the PILOT will graduate from 60 to 80 percent of the total assessed value of the property, Collingswood Mayor Jim Maley said.
The value of that agreement doubtless factored into the attractiveness of the deal for both buyer and seller, but transferring the PILOT to a new buyer requires action from the municipal government. Maley said Premier Properties approached the governing body in mid-October with the framework of the deal, requesting its cooperation to expedite the transaction by year’s end in order to sidestep capital gains taxes under the terms of a 1031 exchange.
After various meetings with the buyer, however, Maley said Collingswood commissioners weren’t satisfied with Premier’s plans for managing the property, which has been plagued with security concerns for the past several years.
Under Morgan Properties, the Parkview has seen six violent deaths as well as muggings, vandalism, theft, property damage, and neglect of resident concerns regarding environmental conditions from heat to infestation and contamination.
When a 95-year-old Parkview resident died after having been assaulted by a 14-year-old in the lobby of his building last year, the borough government finally passed an ordinance requiring its largest rental properties to maintain a security presence.
With the complex slated to change hands, commissioners wanted the buyer to commit to additional safety and environmental upgrades, which Maley said Premier was reluctant to do. Its position, according to local officials, is that “re-tenanting” the property—i.e., replacing existing, problem tenants with new, higher-rate payers—would solve those concerns.
“We’ve been fighting this fight for a few years now, even the last year or two with the current owners,” Maley said in a December 6 meeting of the Collingswood borough government.
“[Premier] told us pretty clearly that their methodology here is that they’re going to change over who lives there, and when they change over who lives there, the safety issues will be better,” he said.
“We have great concerns about that whole line of management, and don’t feel that they have the qualifications and experience to run a project like this,” the mayor said at that meeting.
(Multiple requests for comment from Premier Properties for this story went unanswered.)
Collingswood Commissioner Morgan Robinson, who, together with Commissioner Rob Lewandowski toured a Premier apartment complex in Pennsylvania during talks with the company, similarly objected to its “re-tenanting” strategy in the December 6 meeting.
“We’re not in the business of maximizing the buyer’s tax benefit; we’re here to keep people safe,” Robinson said then.
“The idea that the main way to fix this building is to re-tenant it… they just kept talking about a new demographic… ‘get new people in, change the population of the buildings,’ and it made me more than uncomfortable,” she said.
Robinson described Premier’s stated security strategy of leveraging “cameras and fees and penalties on people who step out of line” as hostile to renters and insufficient to address lasting concerns at the complex.
“You can’t put cameras on every single corner and punish everyone,” she said during the meeting. “It doesn’t seem like how you improve a neighborhood.”
Terms of the deal
After extended negotiations, the borough government approved the sale after winning a number of concessions from Premier. The amended PILOT agreement includes several conditions pursuant to the closing of the sale.
According to the agreement, Premier will:
- invest $17 million in renovations onsite, committing to “fully renovate each unit upon turn and undertake substantial upgrades” to common areas, “as well as address quality of life… safety and security issues…” including repairs to elevators, windows, amenities, parking, hallways, lighting, cameras, locks “and otherwise as needed.”
- contract with software company Yardi Systems to establish a 24-hour call center that will receive, log, track, and address tenant concerns “in a systematized fashion.”
- upgrade its cleaning services to cover common areas and stairwells (which tenants report are frequently befouled with human waste) for 90 days before re-assessing.
- “actively monitor” infestation concerns on the property via its exterminator service.
- “undertake a full upgrade” of elevator mechanical components and cabs at the complex beginning in the second quarter of 2022.
The new property managers will also:
- staff the lobbies of each building with security guards from 3 to 10 p.m. Sunday through Thursday, and from 3 p.m. to 12 a.m. Friday and Saturday for a year-and-a-half after the deal closes, before re-assessing.
- “undertake a regular review of the security conditions at the property… and work in good faith to ensure security conditions at the property improve from their current status.”
- assess all cameras onsite and will supplement existing cameras with additional units from LiNKiT within 45 to 90 days of the deal closing.
- review physical locks throughout the complex to identify those in need of repair or replacement.
- install a ButterflyMX video intercom security system within 90 days of taking over the property
- establish a “secure, centralized location for package deliveries” in an area monitored by security cameras.
- review and upgrade its external lighting systems within four to six months of closing the deal.
Finally, Premier also will work to increase parking enforcement at the property, requiring all tenants to register their vehicles within the leasing office, and “conduct[ing] a full review” of onsite conditions to ensure, among other things, that the “parking lot does not become an abandoned car lot as it is currently.”
In total, Maley said the buyers will spend “upwards of $25 million on upgrades” at the Parkview to address the persistent concerns of residents onsite.
“It’s definitely better,” the mayor said. “We are all of the belief that getting somebody in those lobbies will help significantly.”
Nonetheless, Robinson said officials are “going to have to keep a close eye” on things at the apartment building under its new management.
“This is the first property of this size that this company has taken over,” she said. “I think people should continue to know that they can reach out [to borough officials]” to hold the buyer accountable for conditions there.
Lewandowski said managing a location with the density of the Parkview is “never a one-day thing,” and that Premier is coming into the borough “with an expectation from the entire community” that things will improve under its ownership.
“It takes consistency and vigilance and planning and an investment of time; of resources,” he said. “It requires residents to be good to each other. It requires property owners and property managers to be responsive.
“I am hopeful that we will see immediate improvement, but that my sense is that this is longer-term, and that it takes consistent effort,” Lewandowski said.
“I hope we got the message to the property owners that the expectations of the borough are ‘take care of your residents, take care of your residents, take care of your residents.’ That might mean not just being responsive to problems,” he said.
“Ultimately, this has got to be about providing quality housing and quality service around that housing, because that’s not just a Parkview thing, that’s a Collingswood thing,” Lewandowski said.
“I don’t think you turn this ocean liner around on a dime, but we have to get there. I don’t know what the choice is,” he said.
‘We’re busting our asses to survive in this craphole’
For Kylie Penta, 24, life at Parkview has been expensive, messy, and hazardous to her health.
Penta, who has a history of respiratory health issues, battled environmental concerns in an apartment that she said took Morgan Properties months to remedy.
Penta was living in the first floor of the B Building at the complex last year when she noticed “this questionable black liquid coming down my wall.”
“The leak got so bad that it was leaking through our cabinets,” Penta said. “It ruined all our dishes.”
After she and her roommate made multiple requests for maintenance to address the issue, work crews cut a hole in the ceiling, which revealed mold, sludge, and other unidentified contaminants.
“They flooded my entryway with dirty bug water,” Penta said. “It was hell.”
Penta said the two were told that their apartment was uninhabitable and that they needed to move immediately. But it was another two months until they were relocated to the sixth floor of the building.
“The person who was supposed to transfer us up and quit,” she said. “I kept calling, trying to figure out what’s going on.”
Penta attributes part of that delay to waiting for a room with a balcony to become available. However, while her rent was increased to account for what was to have been an upgraded kitchen, she didn’t receive anything of the sort.
“The kitchen we come into is supposed to be cherrywood cabinets, new flooring, and brand-new appliances,” she said. “Not only did our appliances not work, but they were so old that they looked like original appliances. Eventually we got them all replaced, one at a time.”
When the dishwasher in her new apartment malfunctioned to the degree that Penta’s plates were getting burned and her carbon monoxide alarm was malfunctioning, she had no recourse but to call 9-1-1 because “Parkview’s emergency maintenance refused to come up.”
Penta believes the contaminant in her original apartment was black mold—she’s awaiting the results of a Home Depot test kit—and said she was hospitalized for four days on oxygen while the problem festered.
At this point, Penta fears not only for her own health, but for that of her neighbors, and fiancée, whom she said has a heart condition that limits his ability to work outside of the home.
“We’re busting our asses to survive in this craphole, and it’s frustrating that they don’t care at all about the problems we’re having, but they’ll continue to upcharge us,” Penta said.
“Maintenance men talking down to you. Black mold all over the stairwell. Human feces,” she said.
“At one point, instead of dealing with it, they locked the stairwell doors, and I had to contact the fire marshal because that was a fire hazard.
“Family members I don’t even talk to are calling asking if I want somewhere to stay,” Penta said. “I don’t want me living here either.”
Know your rights
Although the sale of the Parkview presents numerous opportunities for conditions there to improve, a change in management means tenants should be on the lookout for any practices that would compromise their rights during the transition.
Adam Gordon, Executive Director of Fair Share Housing, a Cherry Hill-based nonprofit that works to end exclusionary and discriminatory housing patterns across New Jersey, said that new landlords often seek to recoup their investment in a property through rent increases, evictions, or aggressive fees and citations.
“There are a lot of landlords in areas with rapidly rising rents who try to buy buildings, do minimal renovations, and then jack up the rents, which has the impact of displacing the existing tenants,” Gordon said.
(To wit: the Premier Properties website describes its Lennox Apartments in Philadelphia as a case study in “allow[ing] for oversized rent increases, following the surrounding market trend,” subsequent to its taking ownership of the complex for less than two years. The same case study boasts a 241-percent increase in net operating income and a 51-percent internal rate of return as a result of its management.)
Moreover, Gordon said that although the PILOT addendum outlines a plan for much-needed facilities improvements, nothing in the paperwork addresses the kinds of “aggressive and potentially illegal tactics” that could be leveraged in “re-tenanting” the property.
It’s particularly alarming, he said, given that Parkview residents “are disproportionately people of color, especially in regards to Collingswood’s overall population.”
“I am concerned about the purported comments to displace these residents [at Parkview],” Gordon said. “It’s a red flag for me. Depending upon the details of what was said and alleged, it may have crossed the line in terms of our state and federal housing laws.
“I think it’s important for the borough to monitor that there’s not a strategy that they’re putting in place to displace the residents, many of whom have been there for a long time,” he said.
Gordon urged residents to know their rights, and to seek legal counsel when they believe they’re being mistreated.
He advised tenants to watch out for attempts to radically increase rental rates when leases are renewed beyond the first year and thereafter, which is commonly when new owners will work to raise them.
Another consideration is whether Parkview had committed to any project-based Section 8 housing contracts under Morgan Properties, a detail that the borough government couldn’t immediately confirm at press time.
Gordon said new property owners sometimes attempt to void such agreements in an effort to replace low-income tenants with those who can pay market-rate rents.
“Having been practically a lifelong New Jersey resident, the real estate market is booming right now like I’ve never seen,” Gordon said. “A lot of people are seeing opportunities to say, ‘Hey, maybe we’ll get people who’ll pay more because there aren’t a lot of alternatives.’
“I think there’s a difference between reasonable businesspeople looking to make a good return, and vulture capitalists trying to squeeze every dollar with no regard for whoever’s impacted,” he said.
“It’s important for the town to take a strong role, especially having this agreement, in working with residents when things come up,” Gordon said.
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