1. home and garden

FAIR HOUSING ACT COMPLAINT
U.S. DEPARTMENT OF HOUSING & URBAN DEVELOPMENT
OFFICE OF FAIR HOUSING AND EQUAL OPPORTUNITY
AB APARTMENTS, LP; AB
APARTMENTS LEASING, LP; EAGLE
POINT PARTNERS, LLC; EAGLE POINT
MANAGEMENT LLC; and TRENT
HUDSON,
Complainants,
v.
CITY OF KANSAS CITY, MISSOURI, a
Missouri Municipal Corporation; JAMES
GLOVER III, individually and officially as a
Councilmember of the City of Kansas City,
Missouri; PLANNED INDUSTRIAL
EXPANSION AUTHORITY OF THE CITY
OF KANSAS CITY, MISSOURI, a public
body corporate and politic; AL FIGULY, at
all relevant times herein the Executive
Director of Planned Industrial Expansion
Authority of the City of Kansas City,
Missouri; and Peter Cassel, individually
and as the agent and representative of
Antheus Capital, LLC, MAC Property
Management, LLC, and Silliman Group,
LLC,
Respondents.
PRELIMINARY STATEMENT
1.
Complainants, AB Apartments, LP, AB Apartments Leasing, LP, Eagle
Point Partners, LLC, Eagle Point Management LLC, and Trent Hudson bring this action
against Respondents, City of Kansas City, Missouri, a Missouri Municipal Corporation,
James Glover III, individually and officially as a Councilmember of the City of Kansas
City, Missouri, Planned Industrial Expansion Authority of the City of Kansas City,
Missouri, a public body corporate and politic, Al Figuly, former Executive Director of
Planned Industrial Expansion Authority of the City of Kansas City, Missouri, and Peter
Cassel for their intentional discrimination against African Americans who reside and/or
who seek to reside in Bainbridge Apartments, Georgian Court, and Linda Vista
Apartments located in the Hyde Park neighborhood of Kansas City, Missouri.
2.
Respondents’ conduct as more fully described herein violates Fair
Housing Act, as amended, 42 U.S.C. § 3601 et seq. (“FHA”), 42 U.S.C. § 1982, and
other state and federal statutes that protect individuals from housing discrimination.
Complainants on their own behalf, and as private attorneys general to vindicate a fair
housing policy that Congress considered to be of the highest priority, seek declaratory
and injunctive relief as well as monetary and punitive damages, and attorney’s fees and
costs against Respondents.
3.
As explained in more detail below, Respondents have engaged in overt
and discriminatory conduct with the intent to eliminate affordable housing owned and
managed by Complainants and to evict the residents of Bainbridge Apartments,
Georgian Court, and Linda Vista Apartments, including but not limited to, Trent Hudson,
because of their race. In violation of anti-discrimination laws and their duty to serve all
Kansas City citizens and protect those least able to protect themselves, James Glover
III (“Councilmember Glover”), who is a resident of Hyde Park, the City of Kansas City
(“Kansas City”), Planned Industrial Expansion Authority of the City of Kansas City,
Missouri (“PIEA”), Al Figuly (“Director Figuly”) and others have waged a campaign of
political influence and deception to force the low-income African American residents out
of the Hyde Park neighborhood, by, among other actions, employing a novel and flawed
“social liability” theory to pursue eminent domain to condemn the properties despite the
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well-known and acknowledged fact that the properties are in “excellent condition” and
well-managed.
4.
Councilmember Glover, Director Figuly, the City, and the PIEA, were
joined and assisted by the Hyde Park Neighborhood Association, Peter Cassel, a
representative of Silliman Group, LLC (“Silliman”), Antheus Capital, LLC (“Antheus”),
and MAC Property Management, LLC (“MAC”), and related companies, so that the City,
Antheus, and MAC could take over ownership and management of the Bainbridge
Apartments, Georgian Court, and Linda Vista Apartments after forcing the Complainants
out of their ownership and management of the properties and its related contract with
the United States Department of Housing and Urban Development (“HUD”). To achieve
their discriminatory ends, Respondents manufactured a report that the Subject
Properties constitute “social blight” to use the City’s condemnation powers to condemn
the Subject Properties. Respondents concocted alleged violations of City ordinances
based upon the City’s chronic nuisance laws and took other steps with the intent to
coerce, intimidate, threaten, harass, and interfere with Complainants in an attempt to
force Complainants and the residents of the Subject Properties out of the Hyde Park
neighborhood of the City of Kanas City.
THE PARTIES
5.
Bainbridge Apartments, Georgian Court, and Linda Vista Apartments are
privately owned multifamily apartment complexes located in the Hyde Park
neighborhood of Kansas City, Missouri (the “Subject Properties”), which receive projectbased rental assistance through the Section 8 Housing Assistance Program
administered by HUD.
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6.
AB Apartments, LP is a Missouri limited partnership with its principal place
of business in the state of Missouri.
7.
AB Apartments Leasing, LP is a Missouri limited partnership with its
principal place of business located in the state of Missouri.
8.
Eagle Point Partners, LLC is a Maine limited liability company with its
principal place of business located in South Portland, Maine.
9.
Eagle Point Management, LLC is a Maine limited liability company with its
principal place of business located in South Portland, Maine.
10.
Complainants, AB Apartments, LP and AB Apartments Leasing, LP
(hereinafter collectively referred to as “AB”) own and operate the Subject Properties.
Eagle Point Partners and Eagle Point Management, LLC (hereinafter collectively
referred to as “Eagle Point”) are the General Partners and management arm of AB
which provides on-site management of the Subject Properties.
11.
AB and Eagle Point are nationally recognized developers, owners, and
managers approximately 4,300 affordable housing units in eight states, including
Missouri. AB and Eagle Point invest in their residential property and residents. For
example, they work through the Phoenix Family to offer programs for residents at the
Subject Properties including emergency financial assistance, a clothing and food pantry,
mental health services, job skills development, and employment assistance. AB and
Eagle Point ensure the residents are proud to call their residential developments home
and help residents gain new skills to move their lives forward.
12.
Trent Hudson, is an individual African American citizen who resides in
Bainbridge Apartments.
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13.
Respondent Kansas City is a Missouri municipal corporation organized
and existing pursuant to the laws of the State of Missouri. Kansas City, acting through
its Mayor, City Council, executive agencies and boards, exercises zoning and land use
authority over the land within its boundaries.
14.
Respondent Councilmember Glover is a member of the City Council and
is sued in his individual as well as his official capacity.
15.
Respondent PIEA of the City of Kansas City is a public body corporate
and politic.
16.
Respondent Director Figuly was at all times relevant herein the Executive
Director of the PIEA and is sued in his individual as well as his official capacity.
17.
Respondent Peter Cassel at all relevant times herein was the agent and
representative of Antheus Capital, LLC, MAC Property Management, LLC, and Silliman
Group, LLC.
COMPLAINANTS PURCHASE AND RENOVATE SUBJECT PROPERTIES AND
IMPLEMENT PROACTIVE MANAGEMENT
18.
In 2006, AB purchased the Subject Properties. At that time, the Subject
Properties were in severe distress due to mismanagement and ignoring the physical
deterioration of the buildings. The condition of the Subject Properties was so bad that
HUD initiated foreclosure proceedings.
19.
After purchasing the Subject Properties, AB and its affiliates invested
more than $31.5 million to rehabilitate and renovate the buildings while at the same time
preserving their historic character, all to the benefit of its residents and the renaissance
of Armour Boulevard.
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20.
In order to finance the renovation of the Subject Properties, AB relied on
financing from HUD including a 100% Section 8 contract and interest reduction payment
subsidy (IRP). No City Tax Increment Financing or City funds were sought to renovate
these properties to historical standards.
21.
The Missouri Housing Development Commission (“MHDC”), is an
instrumentality of the State of Missouri and was created in 1969 by the Missouri General
Assembly. MHDC provides administers and distributes federal funding for affordable
housing in the State of Missouri. AB secured financing from MHDC in the form of Tax
Exempt Bonds and federal Low Income Housing Tax Credits to renovate the Subject
Properties. AB secured financing from MHDC in the past and intends to seek funding
from MHDC in the future to develop affordable housing in Missouri.
22.
AB also implemented proactive management measures to improve the
Properties for its tenants and the surrounding community. Soon after renovating the
Subject Properties, AB and its affiliates hired a security company called Missouri Patrol
to provide security services at the Properties.
Missouri Patrol actively uses 122
cameras located at the Property for real-time viewing and provides recordings to the
Kansas City Police Department (“KCPD”) if requested. Missouri Patrol’s “Class A
Officers” are able to detain, arrest, and investigate, and work cooperatively with the
KCPD. Missouri Patrol uses the strategy of checking the identification of selected nonresidents that they encounter, detain persons who have outstanding arrest warrants,
and call KCPD when outstanding arrests are found. This has resulted in a significant
drop in crime at the properties over the past four years.
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23.
According to HUD, AB’s management company, Eagle Point, provides
excellent management. In fact, HUD has concluded, “Eagle Point’s security measures
significantly exceed those of most ownership and management companies of HUDassisted properties,” and the Properties have “strong, effective and proactive
management.”
24.
By any objective measure, the Complainants’ purchase, rehabilitation, and
proactive management has had a positive impact on Hyde Park and the surrounding
community.
THE CITY, COUNCILMEMBER GLOVER, AND OTHER CITY OFFICIALS CONSPIRE
TO SHUT DOWN THE SUBJECT PROPERTIES AND
EVICT AFRICAN AMERICAN RESIDENTS.
25.
Despite AB’s significant achievements and improvements at the Subject
Properties, Councilmember Glover, and others at the City, as well as Peter Cassel and
the Hyde Park Neighborhood Association have been secretly working on a plan since at
least 2011 to “relocate” the residents of the Subject Properties, remove Eagle Point
from management, and take possession and title to the Subject Properties through
condemnation. Unpublicized documents that Complainants obtained from the City and
PIEA through multiple Sunshine Act requests show a concerted and sustained effort by
the Respondents to shut down the Subject Properties because of their perception that
there are too many African Americans living in the Subject Properties in Hyde Park.
26.
Respondents’ plan to shut down the Subject Properties and relocate
Section 8 residents includes false and misleading portrayals of AB/Eagle Point in the
press, to HUD, and to MHDC, as an ineffective manager or as engaging in
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mismanagement—despite the acknowledgement that there is an acknowledged
absence of “specific, credible claims of mismanagement.”
27.
Respondents’ efforts including, but not limited to, economic and litigation
threats as well as political and media pressure are discriminatory in both purpose and
effect.
OFFICIAL DOCUMENTS UNCOVERED BY COMPLAINANTS SHOW
COUNCILMEMBER GLOVER SOUGHT TO TRUMP UP LITIGATION BECAUSE OF
RACIAL MAKEUP OF AFRICAN AMERICAN RESIDENTS
28.
In or around 2011, Councilmember Glover worked with counsel for MAC
to have a complaint prepared concerning “the Armour Boulevard area” and, more
specifically, HUD’s “recent course of action in the area financing of the Bainbridge
[Apartments], Georgian Court, and Linda Vista . . .”
29.
This draft (“the 2011 Draft”) made it clear that, from the beginning,
Councilmember Glover’s efforts were focused on race of the residents of the Subject
Properties as it asserted that HUD had increased “racial and economic segregation” in
the Armour Boulevard area, “fostered a racial and low income concentration in specific
buildings,” and failed to “promote a mixed income and racial composition” for the
Armour area.
30.
The 2011 Draft also alleged, among other things, that HUD’s actions
caused the Kansas City School District to be “dominated by racial minority students”
and thus “have the effect of segregating school districts and preventing recipients of
federal housing assistance from equal educational opportunities.”
OFFICIAL DOCUMENTS UNCOVERED BY COMPLAINANTS ALSO SHOW
RESPONDENTS’ CONTRIVED A “BLIGHT STUDY” WITHOUT FACTUAL SUPPORT
IN AN EFFORT TO INITIATE CONDEMNATION PROCEEDING
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31.
According to City documents, later in 2011, Councilmember Glover began
to hatch a broader plan to coopt the City’s condemnation powers, using a novel theory
of “social blight” supported by a made-to-order expert report, to dispossess the minority
residents of the Subject Properties. Specifically, in October 2011, Peter Cassel of MAC
sent Councilmember Glover an email titled “Relocation Plan” and attached documents.
Among those documents was a draft “Management Agreement,” “Management Plan,”
and “Relocation Plan.”
32.
The 2011 “Relocation Plan” was actually a game plan for Respondents’
strategy to eliminate African American tenants at the Properties.
Specifically, the
Relocation Plan assumed a condemnation action and, indeed, predetermined – without
any supporting evidence – that the Properties were somehow “blighted” almost two
years before Respondents’ directed their “expert” to prepare a knowingly flawed “social
liability” study. The Relocation Plan stated, among other things, that:
City of Kansas City is preparing for the relocation and de-concentration of
up to 303 resident households of three buildings within a 9-block area
along Armour Boulevard – Georgian Court (90 units at 400 E Armour), the
Bainbridge [Apartments] (165 units at 914 E Armour) and Linda Vista (51
units at 1301 E Armour).
The relocation and de-concentration is the result of a City of Kansas City
condemnation and taking of the properties. . . . .
City of Kansas City is not in the business of managing multifamily
residential housing. As such, a professional manager must be hired for the
operation of the building. . . . .
Contract Segmentation and Portability – there are currently three project
based Section 8 contracts (Georgian Court – 90 units; Bainbridge – 165
units and Linda Vista – 51 units). These contracts could be broken into
smaller sections (ten 30-unit contracts) where the residents can be
integrated into a mixed-income building and avoid the unintended
consequences of over concentration. . . . .
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Residents will then need to qualify for acceptance into the new buildings
and a lottery will assign resident households into over-requested
properties. . . . (emphasis added).
33.
Councilmember Glover continued acting on his predetermination of “social
blight” concerning the Properties. In or about May 2012, Councilmember Glover met
with legal counsel for MAC to begin drafting an Ordinance that cites “blight in the
Armour/Gillham PIEA Planning Area,” notes that “specific properties of concern to the
City include: The Bainbridge Apartments at 908 East Armour Boulevard; the Georgian
Court Apartments at 400 East Armour Boulevard . . .”, and states that “any blight
remediation should be proceeded by preparation of an appropriate relocation plan, if
necessary.”
34.
In September 2012, members of a secret “Bainbridge Strategy Group,”
including but not limited to Councilmember Glover, legal counsel for MAC, Respondent
Al Figuly, former Executive Director of the PIEA, Respondent Peter Cassel of MAC, and
Ted Anderson, City Attorney, met at City Hall to discuss their “Bainbridge strategy.”
Notes from that meeting include the following potential action items:
Press MHDC to remove Eagle Point as manager to protect the property
for the investors, and remove neighborhood problems. . . . .
[T]ake the property through condemnation and sell it to a company who’s
(sic) going to properly manage it (and properly relocating Sec. 8
residents). . . . .
[S]ue HUD with a Fair Housing complaint. (emphasis added).
35.
In November 2012, the “Bainbridge Strategy Group”, including but not
limited to Councilmember Glover, legal counsel for MAC, Respondent Al Figuly,
Respondent Peter Cassel of MAC, and Ted Anderson, City Attorney, met again at City
Hall. Notes from that meeting include the following:
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Explore possible developer default on MHDC bond issue, and legal action
against developer, including condemnation;
Work with MHDC to remove developer as property manager through
presentation of detailed arguments;
Pursue a Fair Housing complaint, through the City or other party, as
necessary;
Use new data for a new declaration of blight on the property, if necessary .
...
Actions moving forward:
Jim [Glover] and Claude [Page] will meet with MHDC staff to develop a
framework for strategies to more formally approach the Commissioners;
Jim and Claude are getting a City attorney to examine the MHDC bond
docs for possible default or other action;
Claude will talk to KCPD officers about possible Sec. 8 tenant violations
not acted upon by Eagle Point; . . . .
Allan and Dave will contact Dona Boley, re: compilation of statistics for
Bainbridge or a larger area; and Peter has volunteered to cover the costs
of Dona Boley’s work, and has sent suggestions for Dona . . . .
36.
On December 4, 2012, the “Bainbridge Strategy Group”, including Claude
Page (“head of Urban Redevelopment for the City Planning and Development
Department”), Councilmember Glover, legal counsel for MAC, Respondent Al Figuly of
the PIEA, Peter Cassel of MAC, and Ted Anderson, City Attorney met again at City Hall.
Claude Page’s emailed notes from that meeting include the following:
Al began a discussion of a modification to the PIEA plan: a modified blight
study showing (social and/or other) blight on the Bainbridge [Apartments]
property . . . passage of the blight study by PIEA; and finding of blight by
the City Council . . . . The goal of this course of action would be
condemnation of some of the owner’s interests, cancellation of the Sec. 8
contracts for this property and relocation of current tenants . . . .
Claude agreed to see if the City could fund the new blight study and other
costs necessary for the PIEA to file a new development plan/activate a
project . . . .
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As a follow-up to the meeting, I have an approval from the City Manager to
spend the necessary funds to get the PIEA process going, and I will make
a presentation at the PIEA’s December meeting to get it going.
Also, Peter [Cassel] will be back in town January 16, 2013. Can all make
that date for our next meeting?
37.
The City, through Claude Page, as well as Respondent Figuly, issued a
confidential Request for Proposal (RFP) for a blight study, with the confidential RFP to
close on January 31, 2013. The confidential RFP stated, among other things, that:
The property for the proposed Blight Study is located at 400 East Armour
Boulevard . . . .
The purpose of this RFP is to request that a blight study be done
documenting the existing conditions of a specific property . . . .
If the property is found to be blighted, the Blight Study may be used to
support a petition in eminent domain under the authority of Mo. Const. Art.
VI, § 21. . . . .
The Blight Study must document the existing economic and social
conditions for the property and make a determination as to whether or not
the property meets the criteria for designation as “blighted” as set forth
within §10.310(2) RSMo. An additional consultant has been engaged to
provide statistics and background relative to social conditions for the
property; this information will be available for use for the selected Blight
Study consultant.
38.
Shortly thereafter, the City, through Claude Page and Respondent Figuly,
issued another confidential RFP, with the amended confidential RFP to close on
February 18, 2013, titled “Amendment to December 2010 Blight Study.” The confidential
RFP stated, among other things, that:
The purpose of this RFP is to solicit proposals to undertake a
supplemental blight study (“Supplemental Study”) that is focused on
identifying social conditions in the neighborhoods between Gillham and
Paseo along East Armour Boulevard and determining to what extent, if
any, those conditions contribute to or create social blight that, in
conjunction with or independent of the findings in the 2010 Study, can
serve as a basis for filing a condemnation action (Eminent Domain action)
under the authority of MO. Const. Art VI, § 21.
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The focus of the RFP is 400 East Armour Boulevard, in Kansas City,
Jackson County, Missouri and the neighborhood(s) in and around that
location that may be impacted if blighting conditions are found to be
emanating from that property (“Property”).
The selected consultant’s contract may be amended to include additional
properties if empirical information indicating that other properties nearby
contribute to or create social blight that, in conjunction with or independent
of the findings in the 2010 Study, serve as a basis for supporting an
argument that conditions creating neighborhood social blight exist and on
a cumulative basis create cause for filing a condemnation action (Eminent
Domain action) under the authority of Mo. Const. Art VI, § 21.
39.
On February 12, 2013, Dona Boley, a resident of Hyde Park and a vocal
advocate against Section 8 housing near Hyde Park, sent an email to Claude Page
attaching a draft report, and stating, among other things, that she “spent a little more
than 10 hours on” the report, commenting that “Peter [Cassel] is probably expecting
more for the time,” and concluding that “[t]he street and block analysis seemed to be the
best way to go first since so many of the nuisance crimes are not address specific.”
(emphasis added).
40.
Patrick
Sterrett
submitted
a
proposal
in
response
to
the
confidential/amended RFP and was ultimately hired to do his first ever “social liability”
blight study.
41.
In an email to Claude Page and others concerning Mr. Sterrett’s RFP
submission, Al Figuly wrote that “I think his approach is on target. When he discussed it
with me before he submitted, , (sic) he was familiar with the issue, related case law,
…even mentioned Fair Housing issues . . . Also, while I think Pat’s pricing is fine, I’d
budget a little more ($5kor so) (sic) and encourage him to connect with social blight
experts who could be helpful if something gets to court (although I understand that is
not the goal).”
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42.
Assistant City Attorney Ted Anderson, condemnation counsel for the City,
who was copied on Respondent Figuly’s email to Claude Page, responded to
Respondent Figuly’s email and included Claude Page in his response, stating:
Al and Claude:
I think its (sic) apparent that Mr Sterrett knows what we are after. It’s a
nice touch that he will study the impact of concentrated poverty on this
property. That won’t hurt me as social blight is a pretty squishy
concept anyway. That will help with the feds and state, probably.
(emphasis added).
43.
In a February 25, 2013 email from Al Figuly to Claude Page, Mr. Figuly
wrote that “PIEA refined the RFP to get a defendable work product. PIEA will be in
court.”
44.
Mr. Sterrett prepared a "blight analysis" under the “Confidential RFP” and
submitted a draft to the secret “Bainbridge Strategy Group” in September, 2013. This
report concluded that the Properties posed a risk of “social blight” but was based on
false and inaccurate data and was never submitted to AB or Eagle Point for review or
comment.
45.
The secret “Bainbridge Strategy Group” met at City Hall again on October
2, 2013, to discuss Mr. Sterrett’s blight analysis report. Handwritten notes from that
meeting recorded the attendance of Peter Cassel of Antheus/MAC and his legal
counsel, as well as Claude Page, Ted Anderson, Councilmember Glover, “Girl in Red
Dress,” Pat Sterrett, Hyde Park representatives and Respondent Figuly. The notes also
state: “Seek Change in General Mgr., Not Just Manager, Staff, Company, etc.”, and
record four changes to be made to Mr. Sterrett’s blight analysis, including: (1) the
addition of the significance of z-scores [a form of crime statistics], as discussed in the
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analysis; (2) add discussion of “societal crimes,” including “prostitution, drugs, carrying
gun”; (3) add a chart for “2010-12 same as 2006-09; and (4) “[d]emonstrate a
preponderance of social blight is within Redevelopment Area.”
46.
Missouri statutes have been interpreted to provide for condemnation of
properties within a specified area in which a “preponderance” of properties are found to
be blighted, even if the specific properties sought to be condemned are not themselves
considered blighted.
47.
After the October 2013 secret meeting, Mr. Sterrett’s original draft of his
“social liability” blight report was revised to include changes recommended by the
“Bainbridge Strategy Group.”
48.
Mr. Sterrett’s Blight Study Addendum makes a recommendation of blight
for the area surrounding the Properties on the sole basis of crime (Z scores), yet
ignores that the level of crime at the Properties has steadily declined since they were
redeveloped in 2008. The Blight Study Addendum also fails to separate out police calls
made outside of the Properties, i.e., on or near the street, or account for the fact that
Missouri Patrol’s careful monitoring activities have increased the number of calls to the
police at the Properties but decreased the overall level of crime. Notably, Mr. Sterrett’s
Blight Study Addendum does not find that the Properties themselves are blighted.
49.
Nevertheless, Councilmember Glover forwarded the original 2011
“Relocation Plan” email and its attachments to his executive aide Erica Torres on
October 28, 2013 with directions for her to forward the documents to Claude Page. Ms.
Torres forwarded the materials, by email, to Claude Page.
50.
The very next day, Claude Page emailed Councilmember Glover, writing:
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Councilman Glover—
I spoke to Peter Cassel at length yesterday, and here is what he had to
say about displacement of 150 Sec. 8 residents:
He has direct experience, through renovation of the Kenwood and
Homestead properties, where more than 150 Sec. 8 residents lived, and
all moved out with no problems. . . .
He . . . supplied a judicious use of relocation funds in special cases—say,
if a resident wanted to move but owed KCPL $700, he might pay the utility
bil (sic) if the resident agreed to go. And if a resident had documented
criminal behavior or anything else that would make them ineligible
for Sec. 8 in HUD’s eyes, he would wouldn’t (sic) report it to HUD if
they would vacate.
I received the relo plan you forwarded me from Peter; thanks. I think it
conforms with what he spoke to me about.
(emphasis added).
51.
During October 2013, the same month that Councilmember Glover was
proceeding with his plans based on the notion of a “preponderance of blight” in the
Armour Boulevard area, Councilmember Glover made a very different statement to the
press. In an October 20, 2013 Kansas City Star article by Kevin Collison,
Councilmember Glover is quoted, as saying, “Armour, for a long time, had been a
dangerous place. When you go down (there) now at night now (sic), you see young 20somethings jogging and walking dogs.”
52.
The same article describes MAC’s activities and investments in the
Armour Boulevard corridor and celebrates their self-reported successes, but then goes
on to falsely accuse Eagle Point of mismanagement:
Not that all challenges have disappeared on Armour. There are still a
couple of buildings being used for Section 8 housing that have proven to
be a problem, notably the Bainbridge [Apartments] at 900 E. Armour Blvd.
The city is trying to push the owner of the Bainbridge [Apartments], Eagle
Point Enterprises of Maine, to do a better job managing the building.
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“Midtown should be a diverse neighborhood, but to concentrate lowincome people in one building doesn’t work,” Councilman Glover said.
Eagle Point officials could not be reached for comment.
53.
The Collison article concludes with another quotation by Councilmember
Glover concerning MAC:
They’ve shown to the investment community there’s a market for marketrate apartments in the core of the city and the best strategy is not to do
just a little but concentrate their investment and do the whole area
What Councilmember Glover failed to say was that he was
responsible for funneling millions of dollars in taxpayer-funded tax incentives to
Antheus/MAC to help Antheus acquire properties later renovated along Armour
Boulevard.
54.
By November 23, 2013, Councilmember Glover’s draft Fair Housing Act
complaint had been revised from its 2011 approach to focus even more on racial
concentration. The 2013 Draft opens by claiming that “[i]n violation of the Fair Housing
Act, HUD, MHDC, and the management companies overseeing the properties of The
Bainbridge Apartments, Georgian Court, and Linda Vista have allowed an unfair racial
concentration to form that has created a blighted area and infringed upon the civil
liberties of those residing in the area.” The 2013 Draft goes on to allege that “the
increased crime and generally blighted area of The Bainbridge [Apartments] serves to
further the negative stereotypes of minorities in the minds of white residents in
the area, perpetuating their desire to relocate and move to predominately white
neighborhoods to avoid these areas.” (emphasis added).
55.
Councilmember Glover also prepared to file an MHDC complaint against
Eagle Point. On December 17, 2013, Councilmember Glover’s assistant Tracy Barnes
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emailed him, attaching a rough draft and expressing concerns about this continued
unfounded assault. The email noted:
I have drafted a rough draft, however, I am not completely happy with it as
I don’t think it is currently detailed enough. Pat’s [Pat Sterett’s] interview
section of the blight study addendum was vague as to the residents and
outlying neighbors’ specific instances of mismanagement at Bainbridge
[Apartments].
Do you know of any way to get more specifics into the complaint? When
you read my draft, you will see what I mean; it is lacking in specific
credible claims of mismanagement.
(emphasis added).
56.
Despite this lack of “specific credible claims of mismanagement,”
Councilmember Glover’s draft MHDC complaint falsely alleges:
The management company of the Bainbridge Apartment Complex (located
at 900 E. Armor (sic) Boulevard, in Kansas City, Missouri) is woefully
ignoring their duty to residents with regard to safety. The following are the
issues:
Property Management freely allows reported criminal activity (Assault,
Vandalism, Theft, Breaking and Entering, Drug sales, crimes involving
weapons, prostitution etc.) to occur in and around this property by
residents and visitors. Residents fear for their own safety and the safety of
their property. Complaints regarding these criminal violations have been
ignored by management. . . . .
Interviews conducted as part of the blight study with the Crime Free Multi
Housing police officers of the Kansas City Police Department believe the
causes behind the high level of crimes are attributable to poor
management of the facility, the long history of crime problems associated
with the property, and the close proximity to mass transit stops. . . .
This complaint seeks to ask the MHDC to provide written request to the
Owner of the Bainbridge Development to terminate the current
management company and to appoint new management that will create a
safer environment for those residents living at the Bainbridge
[Apartments].
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57.
Not only are Councilmember Glover’s draft HUD and MHDC claims
patently false, but AB/Eagle Point has received no credible complaints from residents of
the Properties concerning any alleged mismanagement or residents’ fears for their
safety relating to their housing that were not responded to. In fact, most residents fear
that if Respondents’ scheme to “relocate” them is successful, they will never find
housing, let alone the high level of safe, quality housing provided by AB/Eagle Point.
58.
On December 26, 2013, Claude Page advised the secret “Bainbridge
Working Group,” which included Respondents and legal counsel for Antheus/MAC, that
the flawed Amended Blight Study prepared by Mr. Sterrett had been accepted by the
PIEA board.
59.
On December 28, 2013, the City Manager advised the Mayor of Kansas
City that “PIEA is moving against bainbridge glover pushing it, but he’s right, until we
deal with that entire section 108 building, we will not stabilize east part of armour and
midtown troost (sic).”
60.
On January 7, 2014, the PIEA presented the City Plan Commission with
the flawed Blight Study Addendum prepared by Mr. Sterrett.
Despite public notice
ordinances, no employee or official of Kansas City provided Complainants with notice of
the proposed study, the results of the study, or that the study would be presented to the
City Plan Commission. Respondents simply made a veiled attempt to have the City
Plan Commission rubber stamp the flawed conclusions that the Subject Properties were
a “social liability” to begin eminent domain proceedings by the City Council.
61.
AB and Eagle Point learned that the Blight Study Addendum would be
presented to the City Plan Commission by chance shortly before the hearing. AB and
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Eagle Point immediately contacted their legal counsel and counsel requested a copy of
the Blight Study Addendum. A cursory review of this Blight Study Addendum disclosed
the ridiculousness of the findings. Respondent Figuly and the PIEA nevertheless
attempted to have the City Plan Commission approve the flawed Blight Study
Addendum at the meeting over objection by counsel for AB and Eagle Point. The Plan
Commission, however, granted a thirty day continuance of the hearing since “with the
tool of eminent domain. . .that tool caused many court cases” and she believed an
equitable continuance was appropriate.
62.
On that same day, January 7, 2014, Respondent Al Figuly wrote
Councilmember Glover, Claude Page, legal counsel for MAC/Antheus, legal counsel for
the City and PIEA, and Pat Sterrett saying “Now that there is a public record on this
matter (today’s Plan Commission Hearing), it might not be a bad idea to pick up the
pressure of (sic) the owners, management, and MHDc (sic) as issuers of the bonds on
the Bainbridge [Apartments], Loma Vista (sic) and Georgian (sic)…that should the Blight
Addendum be approved, it could affect some of the bond covenants (be specific) and
trigger an dotice (sic) of an event of default….”
63.
After obtaining documents from the City and discovering documentation of
this misconduct, Eagle Point advised legal counsel for the City of what had been
disclosed in documents obtained from Sunshine Law requests, the flawed Amended
Blight Study has not been presented again to the City Plan Commission. However, the
PIEA has refused to withdraw the PIEA’s flawed Amended Blight Study (paid for by the
City), and it can be presented to the City Plan Commission again for approval and
referral to the City Council for the escalation of condemnation proceedings (or whatever
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additional creative attempts Respondents may have to remove low income housing
residents from the Properties).
RESPONDENTS’ HAVE INTIMIDATED, THREATENED, AND HARASSED
COMPLAINANTS IN AN ATTEMPT TO SHUT DOWN THE SUBJECT PROPERTIES
64.
Respondents also used other means over the years to coerce, intimidate,
threaten, and harass Complainants in an attempt to close the Subject Properties and
evict the predominantly African American residents.
65.
On or about March 11, 2009, the City filed a nuisance complaint against
the Subject Properties alleging several incidents which the City was attempting to
attribute to the residents of the Subject Properties.
66.
AB and Eagle Point responded to the nuisance complaint stating that most
of the incidents cited in the complaint did not involve residents of the Subject Properties,
did not take place at the Subject Properties, and, in fact, the City was provided notice of
the incidents by AB and Eagle Point’s pro-active policing of areas outside of its
properties. Indeed, of the eight incidents cited in the complaint, two were arrests of
persons trespassing on the Subject Properties, three involved non-residents and were
not on the Subject Properties, and the remaining three that involved residents were
cited accordingly by management.
The remainder of the response explained the
multiple efforts made by AB and Eagle Point that helped drastically reduce the crime
rate in the area surrounding the Subject Properties.
67.
The KCPD also drafted a letter in response to the March 2009 nuisance
complaint noting property management was taking reasonable steps to abate criminal
activity and increase safety. They also stated that the presence of security hired by
Eagle Point and the increased amount of policing activity, including providing
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information to the KCPD which has had a “verifiable quantitative and qualitative results”
in decreasing crime in the area, may have caused “perceived negative events.”
68.
The City subsequently withdrew the nuisance complaint because it had no
69.
Antheus also worked hand in glove with the City in trying to take Eagle
merit.
Point's properties through improper means. In early 2011, Eli Unger, the founder and
principal of Antheus, asked Eagle Point what it would it would take to get rid of Eagle
Point's Section 8 housing. Eagle Point replied that it intended to continue providing this
Section 8 housing and would not abandon its mission to provide affordable housing.
70.
In early 2011, Mr. Ungar, in response to Eagle Point's stated intent to
continue to providing Section 8 housing consistent with its mission, sent a threatening
email to AB and Eagle Point in which Ungar stated, “These properties continue to be, in
every sense of the word, a nuisance to the community. It is my sincere hope that you
will take seriously your responsibility to clean up the mess you have made. Absent that,
we will be left with no choice but to take steps that will cause all involved in your
partnership to focus on this matter.”
71.
The City efforts to harass Complainants continued as highlighted by an
email from Claude Page, Manager of Urban Redevelopment for the Kansas City
Planning and Development Department, to Mike Schumacher of the Kansas City
Neighborhood & Community Services Department, in which Page stated that he was
working with Councilmember Glover and it appeared “that the ‘chronic nuisance’ ord
[sic] might be used here to hassle [AB and Eagle Point] here. . .”
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72.
The City’s harassment has continued through 2014. For example, the City
recently removed no parking signs on the street in front of the Bainbridge Apartments
without notice in an attempt to trump up nuisance complaints. The City has refused to
replace the no parking signs despite the protests by the Complainants, KCPD, and even
Hyde Park residents’ complaints that removing the parking signs would create
problems. The removal of these signs has required Eagle Point and the KCPD to
expend additional resources to prevent loitering by nonresidents in front of the
Bainbridge Apartments.
ABSENCE OF ALTERNATIVE HOUSING FOR AFRICAN AMERICAN RESIDENTS
73.
Although the Respondents’ conduct unequivocally shows an attempt to
evict the African American residents of the Subject Properties because of their race,
even if the Respondents had a legitimate, non-discriminatory reason for its actions, the
result would be hundreds of families facing homelessness.
74.
There is currently no reasonable alternative properties in or around Hyde
Park to which the residents of the Subject Properties are able to move.
75.
Because of the absence of decent, safe, and affordable housing in Hyde
Park or anywhere in Kansas City for that matter, closing down the Subject Properties
would result in most, if not all of the residents, being removed from Hyde Park, Kansas
City, and Jackson County with no assurance of ever finding a home.
INJURY TO COMPLAINANTS
76.
Through the action of AB and Eagle Point, the Subject Properties assure
their residents have safe and affordable housing that is not otherwise available in Hyde
Park or the midtown area of Kansas City.
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77.
Respondents have engaged in the acts described above and herein to
attempt to condemn or otherwise shut down the Properties and to cease renting to
persons because of their race, familial status, and disability.
78.
Respondents
are
intentionally
discriminating
against
the
Subject
Properties’ residents and are engaged in a concerted effort to drive them out of the
Hyde Park neighborhood of midtown Kansas City.
79.
Respondents’ discriminatory efforts to destroy low and moderate-income
housing opportunities in midtown Kansas City have a disparate impact on AfricanAmericans and others within protected classes.
80.
AB/Eagle Point and the residents of the Subject Properties have also been
subjected to a campaign of harassment and intimidation, including, as discussed above,
the filing of unsubstantiated nuisance complaints against the Subject Properties,
removing no parking signs in front of the Subject Properties in an effort to harass Eagle
Point in violation of 42 U.S.C. §3617.
81.
As a result of Respondents’ misconduct, AB has sustained serious injury.
Since AB first learned of Respondents’ activities, it has been forced to expend
substantial funds, even now totaling more than $300,000.00, to expose Respondents’
false claims, to counteract Respondents’ illegal activities, to protect its residents, and to
protect
its
legitimate
economic
interests
in
the
Properties.
Respondents’
misrepresentations to neighboring homeowners, to the media and to Kansas City
governing authorities in an attempt to find “social liability” to condemn the Properties
have created uncertainty about the intent of Respondents to “relocate” low-income
tenants of the Property.
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82.
The Respondents conduct as described herein made housing unavailable
on the basis of race, familial status, and disability in violation of 42 U.S.C. §§ 3604(a)
and 3604(f). The Respondent’s actions had, and were intended to have, a disparate
impact upon African-American residents of the Subject Properties and to perpetuate
existing patterns of racial segregation.
83.
Complainants are “aggrieved persons” pursuant to 42 U.S.C. § 3602(i) in
that they have been injured by a discriminatory housing practice and/or will be injured
by a discriminatory housing practice that is about to occur.
84.
Respondent’s conduct also constitutes coercion, intimidation, threatening,
and interference with Complainant’s exercise or enjoyment of rights granted and
protected by the Fair Housing Act in violation of 42 U.S.C. § 3617.
85.
Respondents’ conduct was intentional, willful, and taken in disregard of
the rights of others.
PRAYER FOR RELIEF
WHEREFORE, Complainants respectfully request the U.S Department of
Housing and Urban Development find cause that Respondents have violated the Fair
Housing Act, as amended, 42 U.S.C. § 3601 et seq. and that Complainants are entitled
to the following relief in a subsequent administrative proceeding or lawsuit:
A.
A declaration that the conduct of Respondents is in violation of the Fair
Housing Act, as amended, 42 U.S.C. § 3601 et seq.;
B.
To enjoin Respondents from further wrongful efforts to shut down the
Subject Properties and displace the residents of the Subject Properties;
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C.
An award of damages to fully compensate Complainants for the injuries
they have suffered as a result of Respondents’ discriminatory conduct, pursuant to 42
U.S.C. § 3613(c);
D.
An award of punitive damages against the individual Respondents for their
intentional misconduct; and
E.
An award for Complainants attorney’s fees and costs pursuant to 42
U.S.C. § 3613(c)(2).
Dated this 15th day of October, 2014
AB APARTMENTS, LP; AB APARTMENTS
LEASING, LP; EAGLE POINT PARTNERS, LLC;
and EAGLE POINT MANAGEMENT
LLC, Complainants,
By: s/Scott P. Moore
Scott Parrish Moore
Sara McCue
of
BAIRD HOLM LLP
1700 Farnam Street
Suite 1500
Omaha, NE 68102-2068
Phone: 402-344-0500
DOCS/1308288.1
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