The bank that holds the mortgage on the controversial apartment complex on Second Street has sued the City of Natchitoches hoping to halt demolition of the buildings in question. Tenth Judicial District Judge Desiree Duhon Dyess has ordered the City not to enforce a condemnation ordinance adopted Nov.25 and has set a hearing for Jan. 31. The conflict appears to be about two condemnation ordinances passed by the City.
Sterling Bank, headquartered in Poplar Bluff, Mo., holds the mortgage on the Hopeville Apartments at 312 Second St., that includes four apartment buildings and one accessory building. Hopeville Partners obtained a construction loan from the bank to renovate the existing buildings with the intent of providing low-income housing.
The project was approved for Low Income Housing Tax Credits by the Louisiana Housing Commission. The City issued a building permit Sept. 20, 2016. According to the suit, the owners received correspondence from the City May 23, 2018 requesting an update on status of the property.
In June of 2019, the bank received a notice of proposed condemnation “commanding Sterling Bank to appear before the Natchitoches City Council July 22 and Aug. 26 concerning alleged violation of the Code of Ordinances of the property.”
The suit says that the proposed condemnation was based on an inspection report by City officials with the recommendation that the “buildings be demolished or put in repair with a specific performance deadline.” The bank hired a contractor to board up openings and post no trespassing signs. It provided an affidavit of a contractor who said the property was not dilapidated or dangerous but in was a construction site in progress.
The bank also hired a company to build a chain link fence with a locked gate Sept. 10. Despite those actions, the City passed the first condemnation ordinance in August that stated the buildings unsafe were unsafe and recommended that they “be demolished or put into repair to comply with the building code…”
Then, in September, the City repealed the first condemnation ordinance. Because of a new report, the council passed a second condemnation ordinance and recommended that the building be condemned and demolished. According to the suit, there were no material changes in the property during the time between the first ordinance in August and the second one in September except for numerous repairs and actions to secure the property.
The owners also submitted new construction plans that were approved by the State Fire Marshal and applied for a new building permit. The suit says that the second condemnation ordinance was erroneous and contrary to its own inspector’s opinion that the deficiencies could be cured through repairing the structure.
It also states that the City is required to review and issue the building permit. As of Nov. 25, Sterling Bank has disbursed $2.3 million toward the project. Also $3.3 million to $3.5 million in tax credits will be lost to investors if the project is not completed by Dec. 31, 2020.
The suit asks the court for an appeal of the second condemnation ordinance and declare that the property is not in a dilapidated and dangerous condition that endangers the welfare of the public. It also asks for a bond to cover damage that might be caused by delays resulting from the second condemnation ordinance.