Hollins St. homeowners' dreams destroyed Some abandon failed housing project

March 16, 1996|By Marilyn McCraven | Marilyn McCraven,SUN STAFF

When they bought their $82,000 home near Hollins Market three years ago, Tamara and Nathan Schoffer thought they were getting in on the ground floor of an urban neighborhood renaissance.

Late last month, as they prepared to pack up their belongings into a U-Haul truck bound for New Jersey, Ms. Schoffer lamented that their home purchased through a state-backed program "has been such a disaster."

The Schoffers said fleeing the neighborhood was their only recourse after house prices plummeted when the state foreclosed in July on 80 townhouses and apartments owned by New York developer Howard Loewentheil, a principal of the Hollins Townhouses and Market Mews limited partnerships.

"We had sunk more than $10,000 [in improvements] into the house" in the 1000 block of Hollins St., Mrs. Schoffer said. "We knew we would never get our investment back."

The failed project cost the state $2.5 million and was a blow to the long-running effort to revitalize the historic area, said Susan Gregson, a spokeswoman for the state Department of Housing and Community Development.

Walking around the Hollins Market area in Southwest Baltimore, it's clear the neighbor- hood is not as vibrant as it was just a few years ago. Several once-popular nightspots, restaurants and other businesses now are vacant storefronts.

The smell of food frying still wafts from historic Hollins Market. But there's more trash on the streets, more open drug sales, more vacant houses.

The Hollins Townhouses debacle has its roots in the early 1980s, when Howard Loewentheil's son, Stephan, received state loans and federal tax credits to renovate historic Hollins Market and Union Square area homes for low-income apartments.

It wasn't long before Stephan Loewentheil began missing payments on state loans and the state considered foreclosing, said Ms. Gregson. However, Howard Loewentheil stepped in with the idea of selling the rental properties to first-time homeowners, she said.

State assistance enabled the houses to be sold for little or no down payment and below-market interest rates. The idea was to attract young, middle-class people to the area.

By 1993, Howard Loewentheil had sold 31 of the 80 houses far less than the state expected and fell behind in making payments to the state, according to state records. Later, the state began the foreclosure process, completed in July, Ms. Gregson said.

Of the remaining 49 houses, some were turned into or remained rental units and five were sold at auction, Ms. Gregson said. The state was then left with 13 vacant houses to sell, she said.

Though prices of the $60,000 to $125,000 houses were severely slashed, none has sold, she said.

Howard Loewentheil declined to talk about the project while Stephan Loewentheil blamed the state for problems with the townhouses.

"They [state officials] had absolute control at all stages of construction," said the younger Loewentheil, who owns a 19th-century bookstore at 1047 Hollins St. "The majority of the problems that arose happened after they took control of the maintenance budget. These are maintenance issues, not construction issues."

Plunging property values cannot be blamed on the state alone because real estate values in the Hollins Market and Union Square neighborhoods "have nosedived" in the past two years, said Jacqueline S. Rogers, secretary of the state's housing department from 1987 to 1994.

In interviews, four owners of Loewentheil-renovated houses along Hollins Street said they moved out of their homes in the past eight months. Most concluded they had paid too much for shoddy workmanship and they would never recoup their investments. One former owner said increasing crime was the key reason for his move; the other three owners call it a contributing factor.

Two homeowners who have moved are renting to tenants; two others used a legal maneuver called "deed in lieu of foreclosure," which allows them to pay a fee of several thousand dollars and walk away from their mortgages without ruining their credit ratings.

Eleven other residents say they have considered leaving, but most won't because of the expense involved. All said they think they should be compensated for their financial losses.

After residents' complaints were raised recently with the state by The Sun, the state set up a complaint line for Hollins Townhouses homeowners. The telephone number is (410) 514-7300.

Typical complaints from Hollins Townhouses' owners are: flooded basements, leaky roofs, dysfunctional heating and cooling systems, plumbing problems, uninsulated walls, poorly fitting windows and doors, bricks with no mortar between them and unlevel floors and walls.

"I was robbed," said Chuck Ransdale, a 31-year-old flight attendant who paid $70,000 for his home and invested thousands more before moving to Mount Vernon in September.

"This house has contributed to the break-up of my marriage," said Patricia Sayre, an airline ticket agent who lives in the 1300 block of Hollins St. Her husband Frank Sayre, who now lives in Catonsville, agrees.

The state should have taken a greater management role in the project, including overseeing the renovation and developing a crime-control plan, said Jeff Soule, president of the Union Square Neighborhood Association, and Tim Shoepke, president of a Hollins Street neighborhood association.

"They [state officials] should have recognized that this area should be treated like a war zone. We need specific plans for dealing with urban problems. Instead, they treated it like they were selling houses in Towson," said Mr. Shoepke.

Pub Date: 3/16/96

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