The city of Albany announced a settlement in lieu of foreclosure on the Albany Heights assisted-living facility on Pine Avenue after the Albany City Commission’s work session Tuesday morning.
ALBANY, Ga. — Albany City Attorney Nathan Davis announced just after noon Tuesday that the city has settled its lawsuit over more than $2.1 million in unpaid federal loans it said was owed by the owners of the Albany Heights assisted-living facility.
After a lengthy executive session that followed Tuesday's Albany City Commission work session, Davis announced that the city had accepted a deed and $110,000 in cash in lieu of foreclosure on the 249 Pine Ave. property.
"The property owners (Connecticut-based Albany Ventures LLC) had filed Chapter 11 bankruptcy proceedings, and this settlement dismisses that action," Davis said after making the announcement. "This is probably the best the city could hope for under the circumstances."
The city's action against the Albany Heights owners, which was filed in October 2012, dates to 1997, when Albany Ventures received $2.1 million in Community and Economic Development-approved Community Development Block Grant funding. Court documents show that the owners claimed to have made periodic interest payments required under their agreement with the city, which they said made the city's foreclosure action unjust.
But Albany attorney Sam Engram, who contracted with the city to handle the foreclosure proceedings against Albany Ventures, said the company had not kept its part of an agreement, failing to repay the Housing and Urban Development-generated CDBG funds and to file required reports and financial statements.
The city announced its intention to sell the property on the courthouse steps last year, but Albany Ventures received a temporary restraining order halting the sale.
City Manager James Taylor said Tuesday the city was not "anxious to own more real estate," but he expressed optimism that the Albany Heights property could become a key component of ongoing downtown redevelopment efforts.
"Based on the conversations I've had with developers who've expressed interest in that property, it could have a positive impact on our development efforts," Taylor said. "We've been looking to add the residential element to downtown, and there seems to be a great deal of interest in the potential that the Albany Heights property offers."
Mayor Dorothy Hubbard said she is concerned about the mostly elderly residents currently living in the apartments, but she said the city would work with them to make sure they have suitable accommodations.
"Those tenants are my main concern right now," Hubbard said. "We could possibly help move them if that's what they want or find a way to incorporate their (living) arrangements into the repurposing of the apartments. Right now, we're staying optimistic and looking at this as a potential good opportunity for the city. But like so often happens, this is something else that was dumped on us, so we're going to make the best of the situation."
Taylor later said that the city has, by law, an obligation to provide adequate housing for the residents.
"We're obligated to take care of those folks, and we want to," the city manager said. "It may be that some will want to relocate, in which we'll help them. There's a lot of work that needs to be done to that place, and it may not be the most comfortable place to live while the work is going on.
"But whatever we need to do, we're going to make sure the citizens living there are taken care of."