Actions

Money shuffle underway to keep lights on at embattled Euclid apartment complex

Posted
and last updated

Their cries for help continue.

For months, News 5 has been committed to exposing health and safety violations at North Pointe Apartments in Euclid.

Change there is moving slowly, as owners of the massive apartment community struggle to make ends meet.

A new twist in this ongoing saga, as the attorney representing North Pointe's owners puts part of the blame for their financial problems on our coverage.

RELATED:

Rats, trash, filthy conditions still plague North Pointe apartments in Euclid

More problems at Euclid apartment complex, contractor says North Pointe should be condemned

North Pointe Apartments manager pleads guilty to rat infestation, accumulation of garbage

Ken Lapine tells News 5 that "bad publicity," not necessarily questionable living conditions, has caused North Pointe's occupancy rate to drop significantly.

That decline has led to a sharp loss of revenue.

Right now, the $38 million loan for the property is in default.

The owners of this massive lakeshore apartment community are clearly struggling to stay afloat.

Ongoing complaints about rats, crumbling balconies, insect infestation and unanswered service calls are taking a toll on residents as well as the property's bottom-line.

North Pointe's mortgage is currently four months behind.

We've learned it's money that's now being used to keep the utilities on, pay property taxes and cover maintenance costs.

"You have a company that starts to get underwater and then they quit putting that money back into the property so you see things fall under disrepair," said Chad Jones.

Jones is with Cleveland Bricks, a real estate development company.

"One of the cardinal rules of property management is if the tenants are happy everybody is going to be happy," said Jones.

North Pointe's attorney tells News 5 that in the last 15 months, occupancy has tumbled from around 80 percent down to 65 percent.

A special loan servicer is now trying to restructure North Pointe's loan to help free-up millions of dollars needed to correct a laundry list of violations uncovered by the City of Euclid and the Cuyahoga County Department of Health.

For now, North Pointe's owners have avoided going into foreclosure or having a receiver appointed, but Chad Jones said it's still a risk.

"The court is going to appoint the people that are best set up to manage that type of property," said Jones.

If it gets to that point, Jones explained why that might bode well for North Pointe's remaining tenants.

"Once things go into receivership you start to see things getting done. Whether it's fixing an elevator, making sure that the doors are locked, bigger buildings that there is a front desk staff, that there's a security team," said Jones.

Euclid City Councilman Daryl Langman tells News 5 that if the current owners somehow hang on that residents at North Pointe will continue to suffer, he said a change in ownership must happen.

Meantime, the attorney for North Pointe's owners said they are looking for a break and trying to save their investment and they are committed to making it work despite the risk of the lender foreclosing.