Harrisburg asks court to intervene in dilapidated Governor’s Square housing complex

Harrisburg officials have asked the Dauphin County Court to intervene after nearly two years of court proceedings have left residents of a beleaguered affordable housing development in dilapidated conditions.

The city filed a petition Friday asking the court to appoint a receiver. In October, City officials indicated they wanted a receiver. to take control of the complex, which has been deteriorating since May 2023, when the owners filed for bankruptcy.

Since then, the case has languished in federal court with two failed auctions and other delays.

The trustee’s role, if appointed, would be to bring the Governor’s Square units, owned by bankrupt Uptown Partners, into compliance with the Department of Housing and Urban Development’s regulations and city codes and ordinances.

Harrisburg’s mayor criticized court delays that have prevented significant repairs at the housing complex, which, as of October of last year, had about 1,500 active code violation citations against it languishing in magistrate courts.

The complex consists of 221 units, half of which are condemned or vacant.

“I am committed to caring for the people currently residing in Governor Square, as well as many other potential Harrisburg citizens seeking low-income housing,” Williams said in a news release issued Friday evening.

A trustee acts as a custodian of a property so that it can continue to operate if the owner becomes sidelined, such as during a bankruptcy case.

In this case, after the owner filed for bankruptcy, repairs stopped, making many units uninhabitable, according to court documents. This has caused residents to pack up and leave, rather than stay in unsustainable homes. But some residents can’t afford to move or refuse to leave their homes.

A recipient would not be liable to Harrisburg or Uptown Partners. They would answer to the Dauphin County judge appointed to oversee the case and provide a “recipient statement” detailing income and expenses.

According to court documents, the trustee:

• Assess the physical and financial obligations necessary to repair, restore, rehabilitate, demolish, or replace rental units.
• Secure property financial, operational and maintenance records and share them with the Department of Housing and Urban Development and a HUD-approved operator.
• Negotiate and hire suppliers to service the facilities.
• Temporarily or permanently relocate tenants
• Do whatever is necessary to ensure the continued availability of low- and moderate-income housing.
• Hire a qualified, HUD-approved property manager
• Pay necessary expenses for city code violations
• Receive all income from the properties.
• Provide access to city inspectors and contractors hired by the recipient.

The court filing comes after two auctions for the property failed because none of the potential buyers met Uptown Partners’ requirements. One of the bidders was WODA Cooper, a company affiliated with a former political ally of Mayor Wanda Williams.

Uptown Partners previously sued Harrisburg in a competing lawsuit, alleging that Harrisburg was intentionally scaring away potential buyers while showing favor to WODA Cooper. But in October, Harrisburg and Uptown Partners agreed to dismiss the lawsuit to appoint a trustee to help convert Uptown Partners’ bankruptcy case from Chapter 11 to Chapter 7.

Once the bankruptcy case is converted, the trustee could be replaced by a trustee.