Bad management of Bethany Towers in South Pasadena leaves residents in limbo

click to enlarge HOME SWEET HOME?: Bethany Towers, located in South Pasadena, is undergoing uncertain change. - Alex Pickett
Alex Pickett
HOME SWEET HOME?: Bethany Towers, located in South Pasadena, is undergoing uncertain change.

By all accounts, the elderly residents of Bethany Towers are suffering.

For months, the 17-story building in South Pasadena has lacked a functioning air-conditioning system. In most of the building's 210 units, residents cannot open their double-paned windows. When the midday sun comes through, residents use fans they purchased themselves. But without any breeze, the fans just blow hot air.

Some of the folks at Bethany Towers live without a working stove or refrigerator. Others have leaky faucets and broken showerheads. This year at Bethany Towers is the first in years without a major infestation of roaches and bedbugs, though mold continues to be a problem.

Bethany Towers' troubles are not limited to individual units. The entire building needs a new paint job. The common areas are frequently filthy. Hallways and lobby have stained carpets. The furniture is old and soiled. The laundry room has only two working dryers and washers. Occasionally, one of the building's two elevators breaks down.

"I'm ashamed to invite any friends here," says one 70-year-old woman, who moved here four years ago so she'd be near her daughter in Gulfport. "The only place I'm comfortable is my own apartment."

"Sometimes I feel like I'm walking into a skid row motel," says another senior in his 60s.

That's why, earlier this year, residents found hope in the proposed sale of the property to an Orlando-based developer, Elevation Properties.

In May, the company promised a complete makeover of Bethany Towers, starting with a $1 million renovation in their first year of ownership that would fix the most pressing problems while still keeping rent affordable. A few years ago, Elevation completed a similar rehabilitation of a senior facility in Orlando.

This summer, Elevation Properties secured financing and submitted a project outline to local Housing and Urban Development officials, who supported the sale.

But the national HUD office has yet to sign off on the deal, and the developer says time is running out.

"We have spent considerable time, money and energy throughout the last nine months to bring this sale to fruition," says Elevation Properties president Michael King.

If HUD does not approve the sale, Bethany Towers risks foreclosure, which could put the elderly residents out on the street.

But HUD officials say there is one outstanding issue with the sale: An investigation into Bethany Housing Inc., the building's nonprofit owners, who HUD says broke several regulations and mismanaged the building.

And Bethany Towers' residents are caught in the middle.

In Bethany Towers' small common library, Earl Suri and Steffan Hicks of the Bethany Towers Resident Association plead their case to a visiting reporter. It's the same case they've pleaded dozens of times to HUD officials, South Pasadena Mayor Dick Holmes, U.S. Congressman Bill Young and U.S. senators Bill Nelson and Mel Martinez.

"There should be no reason why [HUD] would hold this up except for red tape," says Hicks, the association president.

Adds Suri, the association secretary, "I wish there was someway we could light a fire under their butts."

Hicks, 53, moved here seven years ago while awaiting a heart transplant. Suri, 66, moved in two years ago to be near his sick father. They've both witnessed Bethany Towers' downward spiral.

Bethany Towers is an old building. In 1970, Bethany Housing Inc. — a nonprofit formed by the New Hope Church in South Pasadena — bought the apartment complex with the help of HUD. Not unlike many other HUD buildings from the '60s and '70s, Bethany Towers now needs costly repairs, and with rents ranging from $400-$545, that can be difficult.

But according to residents and HUD officials, Bethany Towers' problems escalated in 2005 when Bethany Housing Inc.'s board members hired Belmont Management Inc. as property managers. They claim Belmont neglected repairs and ignored bug and safety concerns.

(Belmont Management's St. Petersburg office directed questions to a Texas branch, which did not return calls.)

But according to a recent HUD audit obtained by Creative Loafing, Bethany Towers' troubles went much deeper than negligence.

In 2004, board members of Bethany Housing Inc., led by president Gary Hofmeyer, signed a contract with a company interested in buying the building. But, in violation of HUD regulations, the Bethany Housing Inc. board did not disclose the sale agreement to HUD officials. It was because of this buyer that board members hired Belmont Management Inc. a year later; the buyer had financial ties to Belmont and insisted the company's services be used.

[HUD officials will not disclose the name of the buyer.]

During this period, unaware of the board's dealings, HUD officials met with Pinellas County's Community Development office to secure $1 million in forgivable loans to renovate Bethany Towers' aging infrastructure. But board members refused the funding.

"The board basically contacted us and told us they weren't interested," says Frank Bowman, director of the county's community development office, adding additional money was to follow the first $1 million.

The HUD grant was contingent on the building remaining an affordable senior high-rise for 30 years. According to HUD officials, the would-be buyer balked at this condition, and convinced the board to refuse the money.

Deprived of the funding, Bethany Towers' conditions worsened, causing many seniors to move out of the complex, further hurting the building's financial situation. (HUD officials charge this led to the Bethany Towers' mortgage default this year.)

HUD officials did not discover the unauthorized sale agreement until 2007. Per HUD's request, Bethany's board members voided the sale, but not before taking $90,000 in payments from the would-be buyer.

That $90,000 never reached Bethany Towers.

Instead, board members handed the money to the New Hope Church. Who was pastor of New Hope Church? Board president Gary Hofmeyer.

"I did not personally profit from [the sale]," says Hofmeyer from his home in St. Petersburg's west side. He refuses to comment on what happened to the $90,000.

"We as a board are really sad about what happened," he continues. "I believe we as a board acted nobly and the best we could under the circumstances."

(New Hope Church "died" last year, says Hofmeyer.)

In a response letter to HUD's audit, Bethany Housing Inc. maintains board members did not knowingly do anything wrong: "The board of directors as it currently exists is not the same board that authorized the sale and allowed the management company to create the situation that was the subject of your audit."

Last year, HUD forced the board to replace Belmont Management with a new company, Taylor Made Services,which residents say is doing the best it can under the circumstances.

Though no longer president, Hofmeyer continues to serve on Bethany Housing Inc.'s board.

As part of its audit, HUD is recommending that the state's top HUD official make a decision on whether to initiate foreclosure proceedings against Bethany Towers. If that happens, King of Elevation Properties says they will "walk away" from the project.

HUD may also seek fines and damages associated with the missing $90,000, which the agency says should have been used to maintain the towers, plus another $16,000 in unaccounted spending by Bethany's board. In their response letter to HUD, board members warned HUD that any fines could prevent the sale of the building to Elevation.

"HUD would not benefit in any way by doing that," adds Hofmeyer. "You can't chase the past. All we can do is just find the best solution for the future."

(When contacted at his home, current Bethany board president Jon Culp declined comment.)

Currently, the process is at a standstill.

Meanwhile, the elderly folks living at 880 Oleander Way continue to suffer through hot days and cold nights, dirty hallways and moldy apartments, and they hold on to diminishing hope.

"The older people here are worried from day to day whether they are going to keep their apartments," says Suri of the resident association.

"Everyone is worried," adds Hicks. "We're all on pins and needles."