Why Portsmouth’s senior housing will take years to rehabilitate
PORTSMOUTH – Senior citizens living at Quaker Manor and Quaker Estates on East Main Road have been waiting for new boilers, necessary building upgrades and even everyday maintenance tasks to get done for years. From the sound of things at the Portsmouth Housing Authority board meeting, most of them are going to have to keep waiting for years to come.
Michael Packard, the principal of Phoenix Housing (the new property manager and soon the new owner of the Quaker housing complexes), told the residents in attendance at that Friday meeting that unfortunately, it would take several more years to dig out of the financial mess the properties were left in when Phoenix decided to acquire them.
Packard told the residents, “There were a lot of issues (when we took over the property management). There were bills that hadn’t been paid; vendors that wouldn’t come out to the property anymore because they weren’t getting paid…there has been a lot of staff turnover…the biggest problem we have on those properties from a physical standpoint is the heating systems.”
He explained while the previous property managers did install new boilers in the Quaker Manor units, they didn’t change any of the other infrastructure including the pumps, switching and controls. He said when the Quaker Estates properties were built, they came with “cheap, garbage furnaces” which are no longer in commission and are difficult to find parts for. He also said the properties have “negative money” in their operating accounts, and his company regularly puts money into the operating accounts to pay monthly bills.
PHA board member Sharlene Patton read a letter written by a Quaker Estates resident explaining her boiler used to be completely broken, leaving her apartment cold in the winter. After a contractor was brought in to “fix” the boiler, it constantly runs at maximum blast, with both her and her downstairs neighbor’s thermostats consistently reading 85 degrees and no way to adjust that temperature.
Packard said he was aware of this particular tenant’s boiler problem and other issues which residents have consistently brought to his attention since Phoenix took over management of the properties, such as heating and boiler problems, mold behind the walls of some units and a general lack of regular maintenance.
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He pointed out, however, that replacing this one tenant’s boiler – which he promised he would replace – is going to cost about $10,000. That’s half of the existing budget available to service all of the units in that building. He acknowledged he is aware of two boilers in that particular building that currently have problems, but explained, “If we replace both of them, we would have zero dollars at the end of the day…so if the roof starts leaking, we’ve got problems. If another boiler starts acting up, we’ve got problems…There’s no real easy answers here. What there is here, is a tremendous amount of work.”
“Simply put, Quaker Manor was rehabilitated but it wasn’t done right,” he continued. “They didn’t do enough, and they didn’t do the right stuff…and then, if you look at the Quaker Estates…if we don’t do something now, five to ten years from now it’s going to be a disaster. So the plan is to completely rehabilitate all of the Quaker Estates.”
New owner finds costly future
Packard said the financial and regulatory processes required for him to consolidate the Quaker Estates and Quaker Manor units into one cohesive entity are so complicated that his lawyers are entering “uncharted legal territory” with HUD, and the deal he is working on would be one of the first of its kind in the country. “So we’re going to be setting policy a little bit as we blaze the trail,” said Packard, “but at the end of the day we’re looking for is one property that is well-capitalized, completely repaired and operates as one cohesive unit.”
He guaranteed results, stating every property he has ever been involved with, no matter how disastrous a state he found it in, has come out “completely renovated, in great shape, with people happy to live there.”
He also made it clear to everybody present that his personal style and preference are just to pay for what needs to be done and get it done.
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“To be honest with you, I’m tapped out when it comes to Portsmouth. I can’t park any more money here," Packard said. "We covered legal fees; we’re covering the fine (the $20,000 HUD settlement). I agreed to do that – I didn’t have any idea how much it was going to cost me, but I’m a man of my word so when I say I’m going to do it, I do it…(but) I’m tapped out…I just can’t do it anymore.”
He continued, “We had to loan money to the jobs to pay water and sewer bills; it’s just disastrous…we had to hire somebody special just to put together all the numbers and paperwork from prior management and administrators just so it could make sense (for the auditors); and even then I think it was an additional $10,000 bill from the auditors. Just to give you an idea of how bad it was.”
HUD required the PHA-owned Quaker Manor LLC to terminate its relationship with Coastal Housing and find a new property manager, approving Packard’s company Phoenix to take over property management starting on Jan. 1, 2021.
Digging out from past mismanagement
It’s not clear where the Portsmouth Housing Authority’s money went – at least not to the general public. That PHA board – at the time chaired by James E. Dilley – neglected to notify anybody that the Housing Authority and the financial instruments it used to manage the Quaker properties had been so negligent regarding required financial reporting to HUD (not to mention the filing of meeting minutes required by Rhode Island’s open records law) that the federal agency’s enforcement division was coming after them to the tune of $50,000 per missing annual audit.
It is not yet clear whether Dilley and his fellow board members ran afoul of HUD due to intentional obfuscation of their financial practices, sheer incompetence, or some potent combination of both, but former state Sen. Jim Seveney and current state Rep. Terri Cortvriend discovered in 2018 that Dilley and the rest of the PHA board had all quietly resigned in the face of aggressive enforcement tactics by the federal Department of Housing and Urban Development (HUD) and left the senior citizens living at Quaker Manor and Quaker Estates up the proverbial creek without a paddle.
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Seveney reconstituted the PHA board and made himself the chair, with Cortvriend serving as vice-chair. Along with Gary Gump, Ronald Arnois and Sharlene Patton, they voluntarily waded into the quagmire left to them by their predecessors. One of their chief accomplishments was hiring a private auditing firm to perform the missing audits required by HUD en route to negotiating a settlement in coordination with Packard and Phoenix Housing.
Both the town of Portsmouth and Packard’s company have taken on costs to get the Quaker properties back to compliance, and the audits, which the town of Portsmouth paid $30,000 for because the PHA is destitute, found a number of financial irregularities and instances of noncompliance with HUD reporting guidelines in the way the PHA-owned Quaker Manor LLC and its management agent Coastal Housing Corporation were conducting business.
Quaker Manor LLC is a sole member LLC of which the PHA is the only member. State records show Dilley was the authorized person on file for Quaker Manor LLC from 2017 – 2018. From 2019-2021, the authorized person on file was a woman named Rachel Kelly. Quaker Manor LLC in turn had a contract with a property management company called Coastal Housing Corporation to manage the Quaker Manor and Quaker Estates properties.
Dilley served as the secretary of Coastal Housing up until 2019, when he no longer appears on the corporation’s board of directors in any capacity. Coastal Housing’s 2022 annual report lists Rachel Kelley as the secretary and Allison Serina as the authorized signer. Serina has also served as a director since 2015 and as treasurer since 2018. Kelley has served as secretary since 2019. Both Quaker Manor LLC and Coastal Housing Corporation list 2368 East Main Road as their official address. Both entities have functionally ceased to exist, and the PHA is currently working with HUD and Phoenix to finalize a purchase and sales agreement transferring ownership of the Quaker Manor and Quaker Estates properties to a nonprofit entity ultimately controlled by Packard.
This article originally appeared on Newport Daily News: Portsmouth senior housing: Quaker Estates, Manor face costly repairs
