Posted: 5/1/02

Forest Park II residents score court victory

Jessica Foster
Staff Writer

Residents of Forest Park II Apartments seized a victory in Federal District Court Friday, April 26.

U.S. District Judge Michael Davis awarded a preliminary injunction which prohibits the owners of Forest Park II Apartments, 1001 SW 7th Ave. from pre-paying its mortgage May 1. In fact, it prohibits the property owners from prepaying until the Court permits it.

Judge Davis also ruled federal law does not preempt state law and the residents of Forest Park II should have received a one year notice of intent of prepayment. The residents were told nine months in advance.

The apartment, owned by undisclosed business partners and managed by Gaughan Properties, is taking steps to switch from a subsidized building to market rate rents by prepaying their mortgage.

The court put a kink in their plans with this decision released Friday.

ìThe Court has reviewed the submissions of the parties and the applicable case law and finds that the relevant state law is not preempted by federal law,î Davisí decision read.

ìIn addition, Forest Park II does not dispute that it has failed to comply with the relevant state law. Accordingly, the Tenants Association has established a likelihood of success on the merits. The Court further finds that the Tenants Association has shown the requisite irreparable harm and that public policy and the balance of harms factors weigh in favor of the requested injunctive relief.î

Patrick Gaughan, president of Gaughan Properties, which manages the 60-unit apartment complex, said the issue is not resolved.

Attorneys on his behalf considered filing an appeal with the 8th Circuit Court of Appeals in St. Louis, MO earlier this week. However, Gaughan said Tuesday they will instead be asking Judge Davis to reconsider the ruling.

ìWeíre not appealingóat least not yet,î Gaughan said.

Gaughan said residents who need and deserve subsidy will be better off if the partners are able to prepay the mortgage.

ìThe poorest of the poor are better off if we prepay the mortgage,î Gaughan said.

And the property owners would be better off as well. As it is, Gaughan said the complex is a money pit for the partners who have to eat thousands of dollars in taxes annually.

ìPeople need to get out of this,î Gaughan said. ìThis is a bad investment.î

If the partners who own Forest Park II prevail, residents who qualify will receive enhanced vouchers. Enhanced vouchers would permit residents to move to other apartments and pay rent equal to 30 percent of their income.

Shreffler said the residents he represents would benefit by the enhanced vouchers.

However, not all residents would qualify for the enhanced vouchers as they are income-based.

ìWe had people in there last year making $90,000 a year. Should they get a subsidy?î Gaughan questioned.

Gaughan said 43 tenants had signed up for enhanced vouchers at press time.

He said this points to divided opinions within the building and stressed the tenants association does not speak for all residents.

ìThe majority are on our side and they want enhanced vouchers. They donít agree with the Housing Preservation Project,î Gaughan said. ìThe majority of the building now wants me to prepay.î

Attorney Chuck Shreffler represents a handful of those residents and has appealed Davisí decision to the 8th District Court of Appeals in St. Louis.

Shreffler said he has sat down with four residents and filed declarations with the court. He also has spoken to six individuals with similar opinions who chose to avoid the legal battle.

As a legality, all residents of Forest Park II were named in the lawsuit served by Gaughan Properties. Not all chose to join forces with the Tenants Association.

Others may struggle to make rent even with voucher in hand.

That is the case for Dawn Byland, who has lived in Forest Park II since October, 1997. She questioned if she could find a place to live.

ìThere isnít any other place to go. Itís very hard to find a place to accept vouchers,î Byland said. ìIíd love to move but I donít know what else I could afford to move to.î

Byland said she hesitates to move north as jobs are hard to come by, and she does not want to raise her kids in an urban area.

While there are more court decisions to come, Byland said she relishes the victory in federal court after the time spent researching and visiting with city leaders, lawyers and senators.

ìIt was a victory in a sense that somebody could make a change,î she said.

Chris Goepfert, an attorney with the Housing Preservation Project, a private non-profit agency assisting members of the tenant association has assisted residents in that work toward change. She said the ruling set a good precedence for future rulings in this matter.

ìItís excellent for us,î Goepfert said. ìItís a good step. Weíre glad we got the injunction.î

She said her agency has been meeting with residents of Forest Park II since January. They were referred to the residents by Homeline, a housing organization.

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