Feds take over management of Parade Park as KC housing co-op is ‘slowly collapsing’

Parade Park Homes, one of the oldest Black-owned housing cooperatives in the nation, is under new management by the federal government.

The U.S. Department of Housing and Urban Development has taken over the management of the property, Rep. Emanuel Cleaver, who previously served as Kansas City’s mayor, told The Star on Tuesday. HUD is not redeveloping the property, nor does it now own the property.

The change went into effect Monday, according to a letter from HUD addressed to Parade Park residents, a copy of which was shared with The Star.

“HUD has taken possession of the property to address health, safety, and welfare concerns of the residents and to protect HUD’s interests in the property,” the letter read.

The decision was made in an attempt to save the largest non-government owned development in Kansas City and possibly the state, as it is “slowly collapsing,” Cleaver said.

“We could not wait any longer to start doing anything because every day we waited was another day we were putting the development at risk,” Cleaver said.

The 510-unit housing co-op stands next to the heart of the 18th and Vine Jazz District. Under the housing co-op model, residents are part owners of a nonprofit corporation that owns the property. A self-governing board oversees the co-op.

The affordable units were first built in the early 1960s as many Black families found the opportunity to build wealth through ownership. For decades Parade Park was recognized as a model of sustainable multifamily housing by its residents, Kansas City’s elected officials and HUD. Among its most esteemed residents was baseball player Reggie Jackson and Tuskegee Airman Bruce R. Watkins.

But the move by HUD to involve themselves more closely in Parade Park won’t ensure the co-op’s future success, Cleaver said.

“The danger in this whole thing is creating inflated expectations,” he said. “I don’t even want to remotely give people the notion that they can just relax and everything’s going to be fine.”

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Addressing immediate problems

Cleaver and HUD Sec. Marcia Fudge for months waded through their options for preserving Parade Park.

“Almost all of them were bad,” Cleaver said.

Among the possibilities was giving occupants a set number of days to move out before demolishing the entire property.

But on Friday, Fudge called Rep. Cleaver with a different idea.

“HUD took this necessary step to ensure resident safety and stabilize the property … HUD is engaging with residents, local government staff, elected leaders, and other stakeholders to plan the future of the property based on the shared goal of a lasting affordable housing asset for the community and ensuring safety for residents,” HUD spokesperson Brian Handshy said in a statement to The Star.

The goal is to make the historic residential area livable again. Unit inspections will soon be scheduled, according to the HUD letter.

As of Tuesday, the HUD management team already had boots on the ground in Kansas City, Cleaver said. Parade Park residents should receive notices at their doors. At least one meeting with government officials is forthcoming.

Residents are still expected to maintain their financial responsibility to the development. Asked if there will be any change in that cost for residents, Cleaver said that’s yet to be determined.

Mayor Quinton Lucas, whose mother lives in Parade Park, broke the news of the change in ownership Monday afternoon on Twitter.

“A lot of people, myself included, have good memories there. I hope steps taken now for stability will help many more generations know a community I and many others have known fondly,” he said.

But the future of Parade Park is still uncertain. Cleaver said he still needed to seek funding from Congress for the expensive rehabilitation.

The property is appraised at $6 million but Parade Park Homes is $10 million in debt, Cleaver previously told The Star.

Ballpark estimates for a full development of the property run between $80 and $100 million under the current costs of construction, which would likely be completed in phases. But Cleaver said that’s a cost HUD can’t eat on its own.

“In spite of what many people might assume, we don’t have millions and millions and millions of dollars sitting around on the secretary’s desk,” he said.

Recent assessments by HUD suggest there may also be a multi-million dollar cost to stabilize the existing properties so they remain habitable.

Cleaver said the priority is to start with the essentials, like addressing pressing environmental hazards such as vacant, crumbling and fire-damaged houses.

Residents face uncertain future

Brian Hullaby, 41, a resident of Parade Park who formed a tenant union there in hopes of helping the community, told The Star on Tuesday that letters hit the mailboxes of residents outlining new management under Leumas Residential, LLC. The company has been contracted by HUD.

Over the past several months, as uncertainty around the future of Parade Park has loomed large, Hullaby said there have been signs of progress under the leadership of the co-op board, such as addressing some of the residents’ longstanding concerns over maintenance. He said the news of HUD’s takeover of the property struck residents by surprise, saying they learned of the change through a post by Mayor Lucas on social media.

“I remain positive but I’m extremely skeptical,” Hullaby said, saying he feels the mayor and other government officials have made decisions about the future of the community without input from its residents.

“If we get pushed out of Parade Park our rent will double,” Hullaby added. “And the people here can’t afford that.”

Financial issues remain

Financial problems for Parade Park go back about 15 years, when residents began moving out in larger numbers, resulting in lower revenue, which impeded the community’s ability to fund maintenance and repairs. The complex has not seen a major rehab in nearly three decades.

In recent years, droves of Parade Park residents, who include the elderly and disabled, have left the 510-unit housing co-op in Kansas City, as many of the townhomes fell into severe disrepair. As of April, about half of the townhomes sat empty. Some were uninhabitable, thanks to leaks and fires.

When a large fire gutted several vacant units on the northern end of the complex in February, they were not torn down.

A February inspection by HUD revealed “serious deficiencies;” Parade Park scored 14 out of 100 points, putting the company in violation of its regulatory agreement and leaving residents at risk of foreclosure.

In 2020, the City Council appropriated $110,000 to put toward the first phase of a redevelopment project between Parade Park Homes, Inc, and the St. Louis firm.

In mid-April, the city committed $2.6 million for Parade Park’s upkeep, with an additional $1.4 million possible from the city if the state agreed to match it.

In May, the Environmental Protection Agency announced $850,000 in in Brownfield grants to go toward cleaning up potentially polluted areas in Parade Park co-op, which sits on the site of an old laundry plant, dry cleaning operations, a paint and varnish manufacturer and a car repair garage.

Some residents have expressed fear that a developer would come in, end the co-op and put up new apartments at market rate, pushing out the lower-income residents who live there now. But remaining a co-op longterm may not be possible, Cleaver said.

After looking at every possible angle, including selling the property to a redeveloper, Cleaver said federal officials landed on the “try-angle.”

The ultimate goal is to maintain the legacy of Parade Park as an affordable housing community.

“We’re going to try to save the project,” he said.