St. Petersburg tenants want the city to buy their troubled apartment complex

Some residents of a St. Petersburg apartment complex owned by a struggling real estate firm are calling on the city to buy the property, which is currently facing foreclosure.

Jennifer Bishop, 53, has lived at The Morgan apartments at 2680 54th Ave S for 10 years. It was never luxurious, “but it was decent. People looked out for each other,” she said.

That started to change when Dallas-based landlord Lurin Real Estate Holdings took over in 2022, she said. Property maintenance fell to the wayside. Now Bishop said it seems like every weekend more tenants move out.

“It’s starting to look like a ghost town,” she said.

Bishopand other tenants say Lurin has been asleep at the wheel for months now.

First, Lurin fell behind on its water bills, prompting the city to threaten a water shutoff. Then, more than a dozen tenants faced eviction after the landlord failed to correct fire safety violations.

The city is now suing Lurin to try and recoup over $65,000 in unpaid water bills.

BDS V Mortgage Capital G LLC, a lender on the property, filed to foreclose on The Morgan in May. It claims Lurin owes $43 million on a $46.3 million mortgage loan and hasn’t made a payment since August, according to Pinellas County court filings.

A representative from Lurin did not immediately respond to a request for comment.

It could take months before a foreclosure auction is scheduled.

If no one is appointed to manage the property in the meantime, “it could get really bad,” Casey Babb, an executive vice president with the commercial real estate firm Collier’s, said. “People are ultimately going to leave … bad elements could come in. Things are going to break.”

Residents could benefit from a foreclosure sale since a new owner would likely have more resources to make improvements, Babb said.

But William Kilgore, an organizer with the St. Pete Tenants Union, said the only way to ensure the property won’t end up in the hands of another negligent owner is for the city to step in. His organization is planning a protest in support of the tenants following Thursday night’s City Council meeting.

“It will be another corporate landlord,” he said. “They’re all on a spectrum from crappy to downright evil. There’s going to be the same problems.”

Kilgore said many tenants at The Morgan are paying less than the citywide median rent, which is around $1,721 for a one-bedroom, according to data from CoStar. He said the city has a duty to preserve this much-needed source of affordable housing.

City spokesperson Samantha Bequer saidthe city does not have plans to acquire The Morgan at this time.

“Right now, our focus is on collecting the remainder of the outstanding water services balance and providing assistance and information to residents wanting to relocate from the property,”she wrote in an email.

Though it is rare for municipalities to acquire apartments, it’s not unprecedented, Kody Glazer,the chief legal and policy officer for the Florida Housing Coalition,wrote in an email.

He cited examples in Largo and Gainseville where county governments purchased an existing complex and partnered with an affordable housing developer to rehab and manage the property.

In St. Petersburg, the city already owns another affordable housing complex, the Jamestown Apartments and Townhomes at 1035 Burlington Ave. N.

“I hope they do take over and do what they’re supposed to do,” Bishop said. “I also want them to come up with a plan to hold these companies accountable. You’re playing with people’s livelihoods.”

Though the situation at The Morgan is an extreme example, Babb said foreclosures are on the rise across the Tampa Bay area.

Lurin is one of several real estate firms that made risky investments during the peak of the pandemic, when interest rates were historically low. Now, faced with slowing rent growth and increased expenses for things like insurance and maintenance, many of these companies are struggling to pay back their loans.

Lurin is currently embroiled in at least 15lawsuits in Pinellas and Hillsborough counties from tenants, vendors, lenders and municipalities who claim the company owes them money.

The citiesof Tampa and Huntsville, Alabamahave also accused Lurin of failing to pay water bills.

Twelve apartments Lurin owns in Florida, includingtwoin the Tampa Bay area, were nearly foreclosed on last year, but those auctions never took place.

“Lurin is kind of a poster child for how it would look if you’re a troubled company,” Babb said. “But there are others. Lurin is not alone.”