A Massachusetts-based real estate firm invested about $400K into a Miami-area affordable housing project in 2014 and was gunning for a multimillion-dollar payout on the exit last year, but its nonprofit partner foiled the plan.
An affiliate of HallKeen Management had lined up a deal to sell the project, called Aswan Village, for $21M, and split profits with its nonprofit partner, the Opa-Locka Community Development Corp. Instead, a court ruled the nonprofit can buy the property by assuming its debt and paying the cost of taxes owed: $110K.
Willie Logan, the founder, president and CEO of the OLCDC, claimed a victory in the 11th Judicial Circuit in Miami-Dade County. He warned of investors taking stakes in affordable housing projects and cashing out when the property appreciates, leaving nonprofit partners with crumbs from the deals or tied up in expensive litigation. More importantly, he said, such profit-motivated investors are exacerbating the challenge of providing affordable housing to low-income people.
“Their tactics are unethical, immoral and should be criminal,” said Logan, who served as mayor of Opa-Locka in the early 1980s. “It’s outrageous. It really is.”
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