TAMPA — The New Jersey developer under fire for not helping families stuck in homes blighted with toxic drywall has agreed to provide free accommodations for up to nine months while their houses are rehabbed.
Michaels Development Co. on Wednesday offered the assistance to four families who bought and lived for nine years in government-subsidized homes in Belmont Heights that were made with Chinese drywall. The families were temporarily moved into extended stay hotels in November as part of a rescue plan put together by Hillsborough County and Tampa.
Michaels, the master developer of Belmont Heights Estates, did not build the homes but did hire the now-bankrupt subcontractor that did.
"It's not something that we created, but we think we have some obligation to help families in our community," Milton Pratt, Michaels senior vice president, told the families at a meeting Wednesday.
The families will likely be housed at apartments in Belmont Heights Estates, which Michaels leases and manages. The gesture will cost the company at least $18,000, it estimates. The company also spent at least $120,000 boarding up vacant homes and maintaining the landscaping after other families left several years ago.
Michaels' latest involvement comes after the Tampa City Council and Tampa Housing Authority officials publicly criticized the company for not doing more to help. Council members in December asked city attorneys to look into possible legal action against the firm and discussed asking lawmakers to lobby for Michaels to be barred from competing for federal contracts.
That prompted Michaels to write to Florida leaders, including U.S. Sens. Marco Rubio and Bill Nelson, and U.S. Rep. Kathy Castor, D-Tampa, complaining that its reputation is being unfairly damaged.
The Housing Authority late last year also reached out to the U.S. Department of Housing and Urban Development and asked it to pressure the firm to provide more help, said Leroy Moore, chief operating officer of the Housing Authority.
"Michaels had not come to the table the way we wanted them to," Moore said. "They are clearly at the table now, so you can read into that what you will."
The families are expected to move into the apartments by the end of this month. Housing Authority officials said they will provide help with relocation expenses and provide furniture where needed. Because residents are still paying utility bills on the homes they own, the agency has also agreed to pay the utility bills on their apartments.
Still, the homeowners have concerns about the cost of replacing appliances that were damaged by drywall fumes. They worry that couches and other furniture from their homes may contain toxins.
"I know you guys are trying to help but please don't make me feel like I am begging," said Magareth Morisett, who owns a four-bedroom house on E 31st Avenue."
In all, 12 families, most living in public housing, unknowingly bought the blighted homes in 2008 through a Housing Authority homeownership program that included down payment assistance from Tampa.
Fumes from the drywall corroded copper and electrical wiring, damaging air-conditioning units and appliances. Residents complained of nosebleeds, headaches and breathing difficulties.
Eight of the 12 families walked away from their homes, which went into foreclosure. The remaining families are still making hefty mortgage payments on virtually worthless dwellings.
After a Tampa Bay Times article highlighted the residents' plight, Hillsborough County commissioners approved spending $205,000, mostly from affordable housing funds, to pay for renovation of the homes and short-term accommodation for the four families.
The plan requires the city to roughly match that amount through a federal grant intended for low-income families to make home repairs. Tampa officials are seeking a contractor to rehab the homes.
City Council Chairman Mike Suarez attended Pratt's meeting with residents Wednesday and also met with him beforehand.
Suarez wants the development company to use its leverage to persuade mortgage companies to reduce loan balances and to suspend payments while residents are not living in the homes. The families bought before the real estate crash of the last decade.
"These are not folks who are in any way trying to cheat the system," Suarez said. "What happened is that the system was cheating them out of their one chance of owning a good home and that's what bothers me about this."
Contact Christopher O'Donnell at [email protected] or (813) 226-3446. Follow @codonnell_Times.