Shared from the 4/20/2019 Hot Springs Sentinel Record  eEdition

HUD report gives Aristocrat Manor low marks

A report from the U.S. Department of Housing and Urban Development’s January inspection of the Aristocrat Manor Apartments The Sentinel-Record obtained through a Freedom of Information Act request said the building’s owner may not be providing tenants with quality housing.

That’s despite Marshall Coffman of Coffman Investment Co. receiving more than $60,000 a month in HUD rent subsidies, according to rent rolls the newspaper obtained. The Little Rock company charges $886 and $916 a month for the 440-square-foot efficiency apartments. A company representative said the total includes utilities.

The downtown property scored a 45 out of a possible 100 points on its physical inspection in January, putting it in the point range that enables HUD to take enforcement action. The 79 the property scored during a December 2017 inspection subjected it to annual inspections. Properties scoring in the 80-89 range are inspected every other year and those scoring 90 or higher are inspected once every three years.

The Aristocrat scored a 95 on its 2014 inspection.

“The HUD office is currently in the process of sending a notice of violation/ notice of default letter to the owner as a means of addressing the recent physical inspection,” HUD Region 6 Public Affairs Officer Patricia Campbell said. “As part of their response, the owner will have to show that all identified exigent health and safety items found in the report have been mitigated.”

The converted hotel added to the National Register of Historic Places in 2017 is part of a now defunct HUD Section 8 program that exempts it from fair market rent requirements. Tenants contribute 30 percent of their income toward rent, and Housing Assistance Payments Coffman receives cover the balance. The Aristocrat limits tenant eligibility to applicants 62 or older or disabled, according to a letter Coffman’s company sent the Arkansas Fair Housing Commission in 2017.

HUD set fair market rent for an efficiency apartment in Garland County at $551. Housing Assistant Payment vouchers for Aristocrat tenants are project based, meaning they are tied to the property. Tenant based voucher recipients can use their subsidies at the Section 8 property of their choice.

Coffman executive Kayla LaCasse said part of the monthly subsidies tied to the property service debt on the $2.75 million mortgage granted to Arvest Bank in December 2017. Those subsidies helped service the $1.84 million HUD-held, HUD-insured mortgage Coffman paid off that same month.

A lawsuit filed against him earlier this month in Garland County Circuit Court seeks an accounting of the $2.75 million loan the property is securing, as the plaintiff alleges he is the rightful owner as a result of a 1976 agreement forming the partnership that converted the former hotel into apartments.

LaCasse attributed some of the deductions listed in the January inspection to contractors who installed a used chiller unit in the basement last summer. She said an extension cord they left behind caused the 4.87 point deduction for a tripping hazard, and their failure to replace the cover on a breaker box led to a 10.78 point deduction for exposed wires and open panels.

She noted only 9.33 points were deducted from a possible 37.69 on the apartment unit portion of the inspection, but only 21 of 101 units were evaluated. The report projected health and safety deficiencies in 37 units had the inspection covered all units. Deductions were related to plumbing issues, peeling paint, holes in walls and faulty appliances.

“All apartment complexes, including the Aristocrat, have plumbing issues for clogged drains, leaky faucets, etc.,” LaCasse said in an email. “These are normally easy to correct, and we do correct them as they are reported or during inspections.”

The property scored zero out of a possible 16.23 points on the common area part of the inspection. Deductions were assessed for damaged walls and doors and mold and or mildew in a fourth floor closet housing part of the heating and cooling system.

“The mildew/mold finding was in a storage closet that is never used and management was unaware,” LaCasse said. “Aristocrat Manor hired a contractor to remedy the finding.”

Points were deducted for mold and or mildew in several common areas and tenant units during the 2017 inspection.

The January inspection noted reports of bedbugs on the property, a problem prevalent enough to prompt the city’s transportation services department to complain to neighborhood services in November 2017 about Aristocrat residents bringing bedbugs onto city buses.

“Presently Aristocrat Manor has no known bedbug issues,” LaCasse said. “At time of inspection there were two units being treated. The Aristocrat can assure that bedbugs are addressed as soon as they become known. Bedbugs are a constant battle with any apartment complex, hotel or public areas.”

HUD said its 20 year Housing Assistance Payment contract with the Aristocrat expires next April, and that ownership has yet to provide notification of its intent to renew. LaCasse said Coffman plans to renew the agreement. HUD said a 120 day notice is required.

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