TUPELO – Future owners of a struggling 228-unit apartment complex may pay pennies on the dollar for the property, but the South Carolina-based investors must invest significantly more resources before bringing in new tenants.
When Wells Fargo bank filed a federal lawsuit in 2007 seeking $9.3 million owed for Azalea Gardens, U.S. District Court Chief Judge Michael P. Mills of the Northern District of Mississippi in Oxford appointed a Florida real estate specialist to oversee the property and look for a new owner. Six years later, the only interested company will pay $800,000 along with a string of back taxes and fines owed to the Tupelo, Lee County and the state of Mississippi.
While the property hasn’t exchanged hands, Mills approved earlier this week selling it to Southeastern Development Group, a company of out-of-state investors with a history of working within the government subsidized housing sector through a company called Charleston Renovation Group.
Currently, Azalea Gardens has just a third of the units rented, unable to rent more until it pays more than $40,000 owed to the city of Tupelo in rental fees and fines, according to court documents filed and city officials.
When the company begins improving the property on the 1400 block of Ida Street, it will have skeptics who believe the city doesn’t need more housing aimed at low-income residents. For years, community leaders have discussed the need for more housing for middle-income residents while complaining about too much rental property.
Tupelo Mayor Jason Shelton, elected in June with a campaign of recruiting and retaining more middle-income families to the city, said the new property owner intends to bring something not needed to the community.
“The city of Tupelo simply doesn’t need any more Section 8 housing,” Shelton said. “We need affordable homes for young working families to be able to purchase.
Representatives with the Southeastern Development Group did not return calls for comment Thursday. However, information the company provided with the city of Tupelo’s department of development services shows optimism with the Tupelo rental market, identifying the city having a “need” for additional rental units in this area.
The company has plans for a year-long, three-phase renovation project at Azalea Gardens that will include repairs to the parking lots, roofs and building exteriors of the property. The units will range from one to four bedrooms with an average of 804 square feet. The average monthly rent at the apartments will be $535, according to the company’s plans.
Operating as the Charleston Renovation Group, the company lists projects in multiple states and positive recommendations.
“CRG’s grounded vision, incisive leadership, and ability to engage others with an infectious, inclusive enthusiasm will serve development of affordable housing well,” said Judi Dozier of the Housing Authority of Myrtle Beach, S.C.’s Neighborhood Stabilization Program.