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DC Attorney General Seeks Sale of Park Southern Apartments for Benefit of Tenants

Tuesday, August 12, 2014

DC Attorney General Seeks Sale of Park Southern Apartments for Benefit of Tenants

CONTACT:  
Ted Gest, Public Information Officer
202-727-6283
ted.gest@dc.gov

WASHINGTON, D. C. – The District has asked a D.C. Superior Court  judge to appoint an independent custodian to sell Park Southern Apartments and hold any surplus proceeds for the benefit of tenants, Attorney General Irvin B. Nathan announced.  The request is made in a proposed complaint accompanying the District’s motion to intervene in a case brought by the Park Southern Residents’ Council.  The Residents’ Council is suing the corporation that owns Park Southern Apartments, a 360-unit apartment building offering affordable housing to low-income residents at 800 Southern Avenue, SE.  The case is pending before Judge John M. Mott.
 
The District’s complaint names as defendants Park Southern Neighborhood Corp. and its president, Rowena Joyce Scott, alleging that, contrary to the corporation’s nonprofit purposes, they have grossly mismanaged the Park Southern Apartments, falling far behind on mortgage and utility bill payments and allowing the building to fall into severe disrepair.  The District alleges that a sale of the building is necessary in order to generate sufficient funds to resolve these problems.
 
The nonprofit corporation’s largest single delinquency consists of nearly $700,000 in back payments, interest, and late charges owed to the District’s Department of Housing and Community Development (DHCD) on a mortgage loan made in 2006.  As a possible alternative to having a court-appointed independent custodian sell the building, the District has requested a judicial foreclosure sale on behalf of DHCD.
 
According to the District’s complaint, a May 2014 DCRA inspection of Park Southern Apartments revealed defective fire extinguishing equipment; faulty water heaters; unsafe or non-working ventilation fans; defective electrical outlets; damaged floors; infestations of roaches, bedbugs, and mice; damp and cracked ceilings and walls; and broken bathrooms, among examples of deficient maintenance.

The District also alleges that Scott subverted the nonprofit corporation’s election procedures to gain control of its board, allowing her to arrange for her own appointment as a salaried property manager with a rent-free apartment.  By intervening in a court action brought by Park Southern Residents’ Council, the District would join the Residents’ Council in pursuing new elections for the nonprofit corporation’s board.

The District’s Nonprofit Corporation Act authorizes the Attorney General to seek court relief on behalf of nonprofit corporations that continue to be operated contrary to their nonprofit purposes or in excess or abuse of their lawful authority.

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