A Denver affordable-housing developer that has helped the elderly and disabled for more than 25 years may dissolve after sputtering through a difficult market.
Low prices for market-rate rentals have made it tough on nearly all of the affordable-housing firms in the area, and Uptown Partnership Inc. is facing a foreclosure filing and a lawsuit resulting from its inability to pay bills.
“I hate to be negative,” Uptown board member Leslie Mitchell said. “But I also have to be very realistic. … Barring something short of a miracle, I don’t see how we can avoid (dissolution).”
No decision has been made on Uptown’s future, and officials with Uptown and its investors said they are working to ensure minimal impact on residents.
Board president Kaye Siemers said she is not as pessimistic as Mitchell.
“We provide affordable housing, and we are going to do that the best way we can,” she said.
Uptown – or TUP, as it is known in the housing community – has managed affordable housing in Denver for more than 25 years. Currently it has 16 properties housing more than 250 people.
But last summer the Colorado Housing and Finance Authority began proceedings to foreclose on one of Uptown’s properties.
Last month Pillar Property Services – a management company formerly employed by Uptown – filed a lawsuit alleging breach of contract when Uptown fired the firm after weeks of nonpayment.
“In a lot of ways, we have been victims of our own success,” Mitchell said, noting the nonprofit’s role in revitalizing the Uptown neighborhood, east of downtown. “That area is pretty darn hot, and we just can’t go in and buy new property. … Dirt has just become very expensive.”
A spokeswoman for Colorado Housing and Finance said it will avoid foreclosing on Uptown by taking over an Uptown-owned property at 1205 Washington St. Officials with Pillar Property declined to comment.
The board is waiting for a report from consultants due at the beginning of April.
“I am here to facilitate a process for (the board) that will help them make the best decision that they can for the residents, the property, the stakeholders and staff,” consultant Cherie Kirschbaum said. She added that preserving the affordable units is the “guiding principle” for the board.
Still, Uptown’s dissolution would be a blow to the affordable-housing community, officials say.
“It would be an incredible loss to the city to have what used to be a very strong nonprofit have to make difficult decisions because of these current market conditions,” said Denver’s director of Housing and Neighborhood Development, Jacky Morales-Ferrand. “Our first priority is to try and maintain the affordability of the units. And if we are not able to do that – to be able to recapture our investment in order to replace the units.”
The past year has been tough on affordable-housing nonprofits such as Uptown in Denver and across the country.
Early last summer, city officials had to bail out an affordable-housing developer at Stapleton when it defaulted on $4.7 million in loans.
Last month, Mile-High Housing Fund foreclosed on Northeast Denver Housing for a $1.2 million parcel of land at the Sable Ridge development.
Currently the Colorado Housing and Finance Authority has $10.7 million invested in seven Uptown properties. Denver has invested about $4.2 million.
Rachel Basye, with Colorado Housing and Finance, said that while times have been tough, there may be reason to believe the state is emerging from a soft market.
“I would say that the end of 2005, we finally started to see an uptick,” she said. “But prior to that … it was very tough on the rental market.”
Staff writer George Merritt can be reached at 303-820-1657 or gmerritt@denverpost.com.
