Is the city done trying to oust a Section 8 housing developer from Armour Boulevard?

When Trent Hudson moved into the Armour Tower Apartments, in 1995, he learned to walk the long way home. Hudson, then a lab employee at Truman Medical Center, lived at 640 East Armour Boulevard, three blocks from the Bainbridge Apartments, a police-blotter bull’s-eye for one of Kansas City’s most crime-ridden stretches.

“I wouldn’t walk by the Bainbridge because of the type of individuals who were hanging out outside,” he says.

Eric Winebrenner, now a commander with the Kansas City Police Department, spent 1991, his first year as a patrolman, on the Armour Boulevard beat.

“When I was a rookie, there were a lot of calls for service to all the Armour Boulevard apartments,” Winebrenner tells The Pitch. “Back then, there was a lot of drug dealing.” The Bainbridge, at 900 East Armour Boulevard, was one of the worst.

Financial troubles forced Hudson out of his apartment in 2002. He eventually spent time living in Alabama before moving back to Kansas City last year. Unable to return to his old job at Truman, he found work as a custodian for Jackson County. He takes home about $300 a week, a wage that keeps him just above the federal poverty line but means he can’t afford most rental options in Kansas City, especially along bus routes.

“Where else can you live on $1,200 a month?” he says.

Mostly just in federally subsidized Section 8 housing projects, many of which are clustered in the poorest enclaves of Kansas City.

In January, Hudson took up residence in one such Section 8 unit, in the same building he avoided more than a decade ago.

He says the Bainbridge has changed since he last lived on Armour. He sees less loitering and feels less threatened. There are private security guards. Among other things, they screen his visitors for outstanding warrants. “Some people feel like they harass, but they do their job,” he says.

Armour Boulevard itself, once saddled with a reputation for seediness and crime, has gentrified since 2007. The Armour Tower Apartments are now called Six40, a freshly renovated and affordable housing complex. That project was carried out by MAC Properties, a Chicago developer that has also spruced up other nearby apartment buildings into affordable and market-rate dwellings.

But even as city leaders point to the rejuvenation of Armour Boulevard as a success, the Bainbridge remains a magnet for controversy.

Eagle Point Companies bought the Bainbridge in 2006, along with the nearby Georgian Court and Linda Vista apartments. Assisted by historic and low-income-housing tax-credit programs, the Maine firm poured millions into renovating the three buildings. Despite that investment, Eagle Point’s properties have received strong criticism from leaders of the Hyde Park Neighborhood Association, as well as from bureaucratic and political figures at City Hall.

They claim that the Eagle Point buildings, which are 100 percent Section 8 housing and occupied almost entirely by black residents, account for the preponderance of the crime along that part of Armour Boulevard. 

“I think the basic situation remains the same. Those buildings have always gone through various stages of management,” says Jim Glover, a Kansas City councilman and Hyde Park resident. “Sometimes the management improves. Sometimes it doesn’t. We’ve noticed that for 20 years. It’s a long-term issue. We’re concerned.”

Few would argue that crime hasn’t declined in and around Eagle Point’s properties in recent years. Nearly every statistical measure shows a drop in criminal activity since 2009. But the crime data remains at the center of a nearly unprecedented campaign by local government officials, neighborhood leaders and a well-known developer to strip Eagle Point of its three Armour Boulevard buildings.

As long ago as 2011, city leaders had begun to figure out how Eagle Point’s properties might be shaken loose. Eventually, those leaders settled on a hardly used way to condemn Eagle Point’s buildings so that they might be taken over by the city.

With City Hall’s blessing, KC’s Planned Industrial Expansion Authority, an obscure development agency with powers of eminent domain, commissioned a blight study of the three buildings. The study found no physical blight — no leaky roofs, no code violations, no mold. Instead, the study centered on what PIEA called “social blight,” caused by crime that the report said was taking place in and around the apartments. But the way the stats were interpreted was questionable, and the U.S. Department of Housing and Urban Development (which funds and administers Section 8 housing) took issue with PIEA’s findings. The condemnation plan stalled.

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Top city administrators now say they pursued the social-blight designation not to take over the buildings but to prompt Eagle Point to better maintain its properties.

“We’ve had fits and starts with them over the past,” says Kansas City Manager Troy Schulte. “I think we’ve been very successful with the blight study to get Eagle Point to engage in the process.”

A review of city documents obtained by a Missouri Sunshine Law request points more toward an organized effort to remove Eagle Point of its property interest and relocate the low-income residents, rather than just a bid to get the company to listen up.

Eagle Point CEO Laura Burns says the company has been kept largely in the dark about the city’s plans.

“We think this is targeted against these properties that are in an environment of growing gentrification,” she tells The Pitch. “We think that’s why we’re being targeted.” The company has hired local and national housing lawyers to consider Eagle Point’s options.

An ordinance briefly appeared before the City Council in September to resolve differences between the city and Eagle Point, but the item was scrapped at the last minute. City leaders have offered conflicting statements about whether the resolution might appear again.

The city’s move against Eagle Point provides a detailed view into how municipal leaders wrestle with the complex issue of low-income residency, a stock of housing in large demand but low supply. How can Kansas City decentralize poverty within its borders?

In the early evening of November 16, 2011, 19-year-old Georgio White and 22-year-old David Waters entered a barbershop at 34th Street and Troost. Armed with guns, they demanded money from owner Joe Jackson. White shot the 53-year-old barber several times when he resisted, killing him. White somehow managed to shoot himself in the process. The two men fled to the Bainbridge, where one of them knew a resident. Police followed a trail of blood to the Bainbrdge and later arrested them. In 2012, White was sentenced to 20 years in prison.

The Tuesday after the shootings, an aide to Councilwoman Jan Marcason fielded a call from Peter Cassel, the director of community development for a company affiliated with MAC Properties. Chicago-based MAC had redeveloped several once-dilapidated buildings in midtown into grand apartments starting in 2007.

“Talked to Peter this morning and sensed some real frustration at how much harder they have to work at keeping tenants because of Eaglepoint [sic],” wrote Susan Borge, Marcason’s aide. “Considering the murder on Troost this week, do you think this would be a good time to consider the option suggested by Charles Renner and Peter several months ago?”

That idea from Cassel and Renner, the Kansas City attorney representing MAC Properties, was using crime statistics to declare Eagle Point’s properties blighted. A blight designation would give the city legal muscle to buy the buildings at fair market value.

But the city isn’t in the business of managing multifamily housing. It would have to turn the building over to a private company.

“If the city did that but had MAC Properties or some other company lined up ahead of time to buy the property, then the Bainbridge would cease to exist in its present form,” Borge wrote.

The idea postulated by Cassel certainly sounds favorable to MAC. Eagle Point’s properties sit in close proximity to several buildings that MAC has redeveloped. Two of those buildings, the Kenwood and the Homestead, were Section 8 properties before MAC acquired them and moved the residents elsewhere.

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But could the city condemn the buildings so soon after Eagle Point spent $61 million to renovate them? And would MAC Properties have been interested in taking them over?

“I can’t speak to hypotheticals,” Cassel tells The Pitch. “I can say our primary interest is having Bainbridge and Georgian Court be safe, crime-free buildings, and whatever actions the city might take to make them safe, crime-free buildings, we support.

“All we want and have asked them to do is to manage their properties … in a way that doesn’t impact their neighbors,” Cassel adds. “I do not believe they’ve done that.”

Cassel says Eagle Point’s buildings pose a problem for his company’s investments, which include 1,500 apartments within the Armour corridor. Some are market rate; others are affordable housing, financed in part by tax-exempt bonds through the Industrial Development Authority. Those 1,500 units are more than 90 percent leased, Cassel says.

“Bainbridge and Georgian Court continue to be outliers in the volume of crime,” Cassel tells The Pitch.

Burns, the Eagle Point CEO, says she has met just once with officials from MAC and its affiliated companies.

“I had one meeting with Eli Ungar [founder of Antheus Capital, an affiliate of MAC] early in 2011,” Burns says. “He made it clear in that meeting that it was his goal to remove Section 8 from that neighborhood. As a result of that, the meeting was very short.”

Ungar, through Cassel, denies making this statement.

Cassel at times traveled from Chicago to attend City Hall meetings of what staffers have called the Bainbridge Working Group. That team met frequently, according to city records, to discuss how to proceed on the Eagle Point buildings. City records indicate that Cassel offered to fund a crime study by Dona Boley, a Hyde Park resident. (Cassel says he did not pay Boley.) Cassel also helped prepare a plan to relocate residents of the Eagle Point properties if the city succeeded in condemning the buildings.

On November 22, 2012 (exactly a year after Marcason’s aide suggested moving along with finding blight at the Eagle Point properties), the Bainbridge Working Group’s agenda included several strategies that largely centered on running Eagle Point off Armour. One approach included trying to find a way to trigger a default on Missouri Housing Development Commission bonds, which were issued to help finance Eagle Point’s redevelopment of the Bainbridge.

Another idea was for the city to file a lawsuit against Eagle Point, charging that it was a “nuisance owner.” The idea fell flat when the Department of Justice and the U.S. Department of Housing and Urban Development objected.

That same month, city staffers met with police officers to discuss the conditions at Eagle Point’s buildings. Senior Kansas City planner Claude Page’s notes describe the residents there as “All baby mamas with kids with the bus stop and gas [station] next door … Groups of women who roam the halls like a college dorm, in groups/factions that change, boyfriends that change … Baby may be from one gang member, when another gang is part of a group.”

Eventually, the Bainbridge Working Group settled on pursuing a blight designation for the buildings through PIEA, the development agency. PIEA meetings, held in the boardroom of the Kansas City Area Transportation Authority’s offices, at 18th Street and Troost, are rarely attended by the public but are popular among developers and their attorneys. The board almost never says no to their requests, and it has the power of eminent domain and can award tax breaks.

For an amount just shy of $24,000, the city hired Pat Sterrett, a blight consultant who used to work for the Economic Development Corporation of Kansas City, another agency that administers developer tax breaks.

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Sterrett is a familiar sight at PIEA meetings, and he has an eye for blight. In fact, he sees blight where most people can’t, finding it wherever vegetation grows or a retaining wall shows a crack. Rather than asking developers to pick up a weed whacker at Home Depot and hire some masons, Sterrett tends to rubber-stamp his blight designation, paving the way for development projects that get 10-year tax abatements.

But even Sterrett couldn’t find physical blight at the Bainbridge, where Eagle Point had spent $31 million in construction costs alone to refurbish the buildings just a few years before. 

So Sterrett’s contract instead directed him to find out if the apartments would qualify as social blight if there was enough crime reported there.

In 2013, Sterrett spent months developing his analysis. When he finally delivered it, the results were contradictory. Yes, Sterrett had found a reading of police statistics that suggested higher-than-average crime rates at Eagle Point’s properties. But he also found that crime had been on a steady decline since 2009. (See “The Numbers” at the end of this article.)

That was good enough for PIEA, which moved toward condemnation, adopting the rarely used and legally ambivalent social-blight designation.

Eagle Point learned that the city was pursuing social blight when company officials read about it on a blog called the Midtown Post, which broke news about the process on December 23, 2013 — just two weeks before the January 7 City Plan Commission meeting, at which the study would be taken up publicly for the first time.

Eagle Point CEO Burns says she’d heard a rumor earlier in 2013 about the city’s interest in taking over the Armour properties.

“We had our attorney call the PIEA and ask if anything was going on,” Burns says. “And our attorney was told no.”

When he learned that barbershop owner Joe Jackson’s killers had fled to the Bainbridge after their robbery, former Hyde Park Neighborhood Association president David Kimmis wrote to 4th District councilmembers Jan Marcason and Jim Glover.

Kimmis, who declined to speak to The Pitch for this story, reminded them of his annoyance with Eagle Point’s management. And he bemoaned the concentration of low-income residents on Armour Boulevard.

“It is time to seriously address this issue and the housing policy that has been allowed at these buildings,” Kimmis wrote the week after Jackson’s death. “To concentrate poverty in one area or in one building and continue down this path is beneficial to no one, with the exception of the developer.”

Kimmis’ complaint speaks to a broader criticism of the federal Section 8 program. The program emerged in the late 1970s, when it became clear that public-housing projects, which concentrated low-income residents as a matter of policy into high-rise buildings, had not met expectations. The housing projects, in addition to federally subsidized programs such as the highway system and home-loan programs, helped drive private investment out to the suburbs, turning downtown areas into slums. It’s a legacy with which Kansas City still grapples. 

Today’s Section 8 program originated with a housing experiment in Chicago, where a group of low-income residents received vouchers to live in more affluent communities. A control group remained in the urban housing projects. Predictably, the residents who could escape impoverished surroundings had better chances of improving their livelihoods.

“It’s based on the idea that low-income folks don’t do well in concentrated poverty,” says University of Missouri–Kansas City urban planning professor Michael Frisch (who lives in Hyde Park). “In most cities in the United States, public housing became the housing choice of last resort.”

Section 8 programs fanned out across major cities all over the country. Some multi­family developers liked the program because the vouchers ensured a steady stream of income. But other private developers didn’t like having to market units to middle-class tenants who might end up living next to low-income neighbors. The paperwork was a hassle, too.

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Today, Section 8’s results remain mixed, with poverty not especially decentralized. In Kansas City, clusters of Section 8 housing projects line the poorer, East Side neighborhoods along stretches of Linwood Boulevard, U.S. Highway 71 and Armour Boulevard. By contrast, only four Section 8 projects exist in Platte County, the rough equivalent of Johnson County, Kansas, on the Missouri side of the state line.

Meanwhile, City Hall has begun to lavishly subsidize high-end apartments in the urban core without requiring that a percentage of low-income units be included in the portfolio.

“Ideally, all the low-income housing would be spread out across all the apartments along Armour,” Frisch tells The Pitch. “I think it takes leadership to build the moral imperative to do that.”

Jonathan Cohn, CEO of the Yarco Companies — which, among other things, finances and manages low-income and affordable housing — is familiar with the Armour apartments. Yarco was brought in as the manager for the Eagle Point properties shortly after that company’s 2006 acquisition. After about a year, Eagle Point decided to manage the properties itself.

Yarco also spun off Phoenix Family Housing, a Kansas City–based social-service provider, which has a contract with Eagle Point to provide job assistance, counseling and other programs.

Cohn says concentrated Section 8 housing isn’t necessarily bad. Such projects, he says, can succeed if the housing is complemented by social services grouped close by.

“The idea of blowing it up and spreading it out is an unnecessarily damaging exercise just to satisfy concerns, legitimate or not, of those who live in nearby real estate,” Cohn tells The Pitch. “That’s an incredible waste of public resources, and it’s incredibly damaging to the limited number of people who are willing to invest in the acquisition and renovation of affordable housing.”

City Manager Schulte says the Bainbridge situation might serve as an impetus for the city to re-examine some of its housing policies, with an emphasis on mixed-income housing.

“You could require any project that receives public assistance, whether it be TIF [tax-increment financing], tax abatement or cash advances from the city, would have to provide low-income housing,” Schulte tells The Pitch. “That’s how other cities have wrestled with it: If you’re going to get public financing assistance for housing units, some number of those have to be affordable or low- income. I think Bainbridge is a way to have the conversation.”

Schulte now seems less eager to apply social blight to the Eagle Point properties — a move that could result in a prolonged legal entanglement between the city and the company.

Schulte also admits that the designation would not have done much to solve the city’s issues with the buildings. The intricate way that Eagle Point financed the project — through Missouri Housing Development Commission bonds, HUD financing and various tax-credit programs — means that the buildings will probably have to remain Section 8 housing until at least 2029.

“I don’t think the city wants to pursue the social-blight recourse, but in this particular instance, it was a context to start the conversation,” he says. “I don’t see broad-based social-blight designations going forward. We have too much physical blight.”

Eagle Point may not be convinced. Burns says the city has been largely incommunicado since last month’s proposed resolution disappeared from the City Council’s docket. And the no-parking signs in front of the Bainbridge building have vanished, she says.

Those signs, KCPD officers say, played a part in reducing crime along the Armour Boulevard corridor by making it harder to park cars and loiter in the area.

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Beck, the KCPD officer who patrols the area, says crime hadn’t been much of a problem around the Bainbridge until the no-­parking signs suddenly went away in August.

“Bainbridge used to be the highest crime area [for the department’s Central Patrol Division],” Beck tells The Pitch. “When they took over with new managers, Bainbridge didn’t even register on the radar until the last month or so.”

Hyde Park Neighborhood Association presi­dent Gene Morgan, husband of teacher union president and Missouri state Rep. Judy Morgan, played a role in the signs coming down.

Gene Morgan, who did not respond to several messages left by The Pitch, asked that the signs come down under the pretext of increasing parking in Hyde Park.

The HPNA had agitated about the crime problem at the Bainbridge for years. Now it wanted to take a step likely to result in more crime.

“What I didn’t like was when they took the signs down,” says Trent Hudson, the Bainbridge resident who returned to Kansas City earlier this year. “You’re trying to clean up the area, so you say, but you take the signs down?”

Marcason, whose district includes Hyde Park, says the sign removal was part of a larger study funded by the Public Improvements Advisory Committee looking for ways to increase parking in Hyde Park. No one at City Hall seems certain whether Eagle Point was contacted beforehand about the signs.

“I don’t know,” Marcason tells The Pitch.

Burns, the Eagle Point CEO, says she was never notified.

The Numbers

Neighborhood activists say crime along Armour Boulevard is higher than average, a claim supported by the social-blight study. But that study, according to HUD, the federal agency that manages Section 8 housing, lumped in police calls made from outside the Eagle Point buildings, including reports from nearby businesses.

In fact, police statistics show that crime at Eagle Point’s properties has fallen off since 2009.

The Kansas City Police Department supplied The Pitch with numbers that show how often calls were made to request service at the three Eagle Point locations.

At Georgian Court, the brick apartment building at the corner of Armour Boulevard and Gillham Road, there were 201 calls for police service at the building in 2010. Of those, 88 reported a disturbance.

In 2013, calls for service totaled 93.

According to John Beck, a Kansas City police officer who has patrolled Armour Boulevard for eight years, crime was a problem at the Bainbridge in 2009. He says around 2012, he started to see improvement.

“They [Eagle Point] have also been proactive in making changes around the property that officers stated needed to be made,” Beck tells The Pitch.

Beck adds that much of the crime he has noted along Armour has had more to do with visitors to the Bainbridge than with the residents themselves.

Data collected by Eagle Point’s private security show 28 cases of disorderly conduct at the properties in 2010, but just one case in 2013. There were seven burglaries in 2010 and one in 2013. The numbers for 2010 show 81 reports of narcotics; that dropped to 21 narcotics reports in 2013. — S.V.