City of Adrian, Riverview Terrace management continue talks on payment plan

ADRIAN — Discussion continues about whether the city of Adrian will enter into an alternative property tax plan with the company that manages the condemned Riverview Terrace apartments in order to facilitate rehabilitation work on the building.

Talks began in March when it became clear to Medallion Management, the company that operates the Riverview Terrace apartments near downtown Adrian, that repair work on the 163-unit structure could begin this year.

In February, the Michigan State Housing Development Authority (MSHDA) approved committing $6.6 million for the emergency rehabilitation of Riverview Terrace. The funds for the rehab will support the completion of structural repairs and general maintenance. Additional work will include painting and adding new features such as carpeting.

In late July 2022, Riverview Terrace was evacuated because of structural concerns when a crack was found between the wall and the floor in a third-floor apartment. Tenants were relocated and have not been able to return to the building to live. The same cracking pattern initially found in the third-floor unit was discovered throughout several other floors of the structure when additional inspections were conducted.

Those cracks discovered throughout the building have more than likely been there for some time, according to Scott Beltz, chief executive officer with Medallion Management Inc., who was present with the Adrian City Commission during both its premeeting and regular meeting April 3. Structural engineers have also confirmed the cracking pattern more than likely has been present in the building for some time.

“Have the cracks been there for a long time? Yep, they have been. Probably a lot longer than I’ve been with Medallion (Management), and I’ve been with them for 25 years,” he said. “I would not have felt right not doing something about it. God forbid the building fall on 163 people. We would all be having more problems than we do right now.”

Because the third-floor unit was being turned over in between tenants, the carpet in that unit was being removed and was going to be replaced. As the carpet was removed, Beltz recounted, staff noticed the crack between the floor and the wall. Immediately, Beltz said, staff notified him of the finding and emailed a photo of the crack to him. That was when he contacted engineering firms and the issue quickly escalated into the evacuation.

When questioned about Riverview Terrace’s inspection schedule, Beltz said the building was inspected annually through MSHDA.

“The only way to catch the problem (of the cracking), honestly, was to tear back the carpet in each unit, which wouldn’t really have been feasible to do,” he said. “I was the one, personally, who got an email from staff that took a picture (of the crack) and sent it to me and said they are concerned about it. I sent (the picture) along to a structural engineer and it kind of snowballed from there.”

Beltz said he didn’t do the popular thing, but instead he did the right thing.

“It’s something that happened. We didn’t try to hide it, we didn’t shy away from it,” he said.

The proposal of reworking the PILOT— payment in lieu of taxes — program at a lower cost would mean Medallion pays a percentage of its revenue toward taxes. Receiving the grant money from MSHDA comes with a different income restriction, Beltz said, lowering its area median income (AMI) from 60% to 50%, which means the management company is limited on how much rent it can charge.

Once the building opens back up, Beltz said, the bills need to be paid. That’s why Medallion is asking for assistance from the city, he said.

A service agreement and the PILOT program that have been proposed by Medallion would be revenue neutral for the city, Greg Elliott, Adrian city administrator, said at the April 3 premeeting.

If the commission is in favor of the proposed program and it is OK with the service agreement, those two documents would come back to the commission for approval at an upcoming regular meeting. If the documents are approved and signed by all parties, construction contracts will start to be signed and by then, Beltz said, grant funds from MSHDA should start to flow in.

“They (MSHDA) have committed to us that the funding is coming,” Beltz said.

Beltz described the construction method as securing the walls to the floor planks.

“In construction today, in the way I understand it, the walls and the floor plank would be bound together through a strapping system, and 50 years ago that wasn’t required, and they didn’t do it,” he said. “Over time, Mother Nature pushing and pulling left and right, forward and backward with the wind, has basically separated the wall from the floor. It doesn’t mean it’s necessarily going to fall, but nobody was going to sign on the dotted line that it’s safe.”

The construction work would probably equate to one month of work per floor, he said. Riverview Terrace is 12 stories high, and construction is projected to take at least 10-12 months to complete. Beltz said he and MSHDA representatives are hoping the first bit of work can start in May or June.

“They are going to start on the second floor and work their way up,” he said.

Whenever construction is completed, Beltz said Medallion would welcome people to check out the structure during some sort of open house.

“Everybody can come there and know that the building is safe to move back into, and that is, honestly, 100% our goal,” he said.

This article originally appeared on The Daily Telegram: Talks on Riverview Terrace payment plan continue