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Low-income housing developer files Ch. 11
Greater Miami Neighborhoods, a developer in Miami-Dade since 1985, and nine of its affiliates have filed for bankruptcy protection.
BY PATRICK DANNER
Greater Miami Neighborhoods, a nonprofit developer of affordable housing throughout Miami-Dade County since 1985, filed for bankruptcy reorganization.
The developer succumbed to rising real estate costs and increased competition for shrinking resources for low-income housing, people involved with Greater Miami Neighborhoods said.
''We didn't do this lightly,'' said Helen Dunlap, hired last year as a consultant by Greater Miami's board. ``We made this decision because we believe it's consistent with the goal of preserving the properties and their affordability.''
Nine affiliates also filed Chapter 11, including entities that own six developments in Miami-Dade County.
Greater Miami aims to seek court approval to transfer those properties, with about 1,200 units, to Boston-based Preservation of Affordable Housing.
The bankruptcies aren't expected to affect tenants.
Greater Miami didn't provide figures for assets and liabilities. It simply checked boxes on its petition indicating its assets were less than $10 million and its liabilities were as much as $50 million.
For the year ending June 30, 2006, Greater Miami reported a loss of $683,379 on revenue of $3.3 million. It listed assets of $44.4 million and $19.6 million in liabilities.
In anticipation of the bankruptcy, the Miami-Dade County Commission this month approved transferring Greater Miami's interests in 18 properties with 2,080 units to other parties, including Preservation of Affordable Housing and Enterprise Community Investment of Columbia, Md. The Urban League of Greater Miami then assumed the interest on three of the properties.
The Florida Housing Finance Corp. also gave a similar transfer authorization on 27 properties for which it provided financing. According to a November Florida Housing memo, the agency's ''financial exposure'' to Greater Miami was $24 million -- none of which was guaranteed.
Greater Miami developed or managed more than 6,000 residential units valued at more than $360 million, according to a brief description on the Internet.
''The goal of the bankruptcy filing is fairly altruistic, and it's a good mission,'' said Jonathan C. Vair, Greater Miami's bankruptcy lawyer. 'The goal is not to disrupt the tenants' lives at all. In fact, it's to maintain them and make them better.''
Last year, tenants at three Greater Miami properties in Naranja and Cutler Ridge complained about piles of rotting garbage, rat infestations and other poor conditions. New management was later appointed.
Among Greater Miami's creditors are Boston-based Housing Partnership Network, whose affiliates provided funding for a senior-citizen housing project in Miami and a multifamily project in Little Havana. It's owed about $2 million, most of which it doesn't expect to get back.
''We make fairly high-risk investments, things that banks won't do,'' said Matt Perrenod, Housing Partnership's chief lending officer. ''When the market turned, it became impossible to sustain the holding costs'' on those properties.