By Heather Warlick, Oklahoma Watch
Margie Burleson knew it was time to start packing up her home the second week of December, but the idea is still sinking in that she’ll be moving into a new apartment the first of the new year.
Burleson will spend one last Christmas at Elm Terrace Apartments in Duncan. This will be her fourth holiday season in the cozy one-bedroom apartment she shares with her dog, Piper, where pathos ivies flourish and Margie enjoys frequent visits from a close relative and friend who live nearby. She said she’ll miss the little apartment but hopes her new complex will be better in many ways.
The 79-year-old Southern California transplant is one of about 40 tenants still living at Elm Terrace. The residents recently received a letter from the U.S. Department of Housing and Urban Development, or HUD, notifying them the agency has stripped federal funding to Millennia Housing Management for Elm Terrace Apartments, terminating the complex’ Housing Assistance Payments contract and requiring all residents to move out.
The extreme disrepair at Elm Terrace leads back to mismanagement by an Ohio-based landlord under legal security for a litany of possible violations. Last month, Millennia owner and CEO Frank Sinito’s Lake County, Ohio estate was raided by HUD and the U.S. Department of Agriculture but both agencies have remained mum about their findings.
Burleson and her neighbors at Elm Terrace had been living in limbo for months, wondering if Arnold Grounds, the new management company contracted by Millennia to manage the complex, would be able to save their home. After Oklahoma Watch reported on the complex’s failing inspection scores in September, the new managers had a long list of repairs to attend to.
These are project-based apartments for some of the state’s poorest and most vulnerable residents. Tenants generally pay about 30% of their incomes for rent; the federal government pays the rest through HUD.Burleson acted quickly after she received the letter of abatement from HUD. She was approved for a one-bedroom at Duncan Plaza, the city’s other project-based complex, which is nearly full and caters to disabled and senior residents. She will move in at the beginning of 2025.
Burleson’s apartment is tidy inside save for tiny bugs that scurry the floors and the usual wear-and-tear of a minimally-maintained unit, but outside, the dire conditions at Elm Terrace are evident. Tenants reside in largely abandoned buildings throughout the large complex. Many windows are boarded up; in others, broken, jagged panes are still embedded within the window frames. Doors to empty units stand open, revealing uninhabitable interiors. At least one unit is burned out. One building is condemned.
A few children played on the rusty monkey bars in common areas of the apartment center weeks after the decision was made to cancel Elm Terrace’s financing.
The complex is in such bad shape it’s beyond repair, at least repair that makes financial sense in its current capacity as project-based housing, said Jimmy Arnold, partner at Arnold Grounds Apartment Management.
“I was well aware of the circumstances; I was hoping we could come in in time to save it,” Arnold said. “But unfortunately, that was not the case.”
Arnold Grounds has been retained by Millennia to oversee management at several of its project-based multifamily complexes, Arnold said.
Failing the Public’s Trust
The federal Project-Based Rental Assistance program provides subsidized housing to 1.2 million low-income American families. The money is administered by HUD. Oklahoma has 168 project-based apartment propertiesthat house about 13,000 Oklahomans.
Elm Terrace is one of at least three Oklahoma properties owned or managed by Millennia Housing Management.
Sinito started the company in 1995, buying up HUD-subsidized apartment complexes like Elm Terrace. Millennia owns or operates more than 280 complexes in 26 states. The firm’s portfolio also includes market-rate apartments, restaurants, and some of Cleveland, Ohio’s most iconic skyscrapers, including Key Towers, which is the Millennia headquarters.
Millennia is the management or ownership behind more than 30,000 apartment units nationally, though the company announced in April it would sell off its inventory of low-income complexes. Millennia was ranked 38th largest apartment owner for 2023 in a list compiled by the National Multifamily Housing Council.
An ongoing drama involving HUD, Millennia and owner Frank Sinito began with years of problematic management practices that, this year, peaked with HUD freezing out any new contracts with Millennia for five years.
The debarment was a punitive action by HUD based on an assertion that Sinito, via his ownership interest in Millennia, has violated his public agreement with the federal agency by mismanaging his low income apartment complexes. Additionally, HUD alleges Sinito is responsible for unauthorized financial transfers totalling more than $405,000, and underfunded security deposit accounts amounting to nearly $4.9 million.
“Your misconduct affects the integrity of HUD’s multifamily programs because it jeopardizes the financial viability of the projects,” HUD stated in the December, 2023 Notice of Suspension and Proposed Debarment sent to Sinito. “The mismanagement of your properties risks the housing stability, and housing quality, of those tenant families.”
Sinito was given time to contest the actions but failed to do so, resulting in the March debarment.
In October, Elm Terrace tenants received a letter from HUD notifying them Millennia had lost its Section 8 payment contract, effective Dec. 1, due to Millennia’s failure to repair major threats to health and safety found during HUD inspections of Elm Terrace, and failure to maintain the property in decent, safe, and sanitary condition.
Profits Over People, Resistance Claims
The poor maintenance records at some Millennia-managed properties likely contributed to disasters, including gas explosions and fires in Millennia-managed complexes that resulted in at least eight people dead and seven people hospitalized.
Another Millennia property, Forest Cove, in southeast Atlanta, was torn down in 2023 as a result of unlivable conditions there. Tenants reported snakes and rats infesting kitchen cabinets and deadly black mold. Residents witnessed killings and even the floors of their apartments were collapsing beneath them.
Millennia is so renowned as a slumlord, a national coalition of Millennia tenants, community organizers, legal advocates and housing justice advocates have formed a Millennia Resistance Campaign. According to its website, the group is “committed to exposing Millennia’s pattern of bad behavior, amplifying Millennia tenant stories, and calling on HUD to hold Millennia accountable.”
“HUD must set terms on the sale of the Millennia portfolio so Frank Sinito does not profit off of tenant suffering,” Community Organizer Foluke Nunn said in a written statement regarding the Sinito raid.
“In the immediate term, Millennia tenants want a seat at the negotiating table while their homes are being sold and a written and enforceable agreement with any new property owner that protects them and ensures that they will live in safe and habitable housing going forward,” the statement read.
The Millennia Resistance Campaign says federal inquiries into Millennia and Frank Sinito are opportunities for HUD to recognize the need for tenant protections against bad landlords like Sinito and better oversight of Section 8 payment contract holders like Millennia.
Elm Terrace is owned by True Freedom Enterprises, the investment arm of True Freedom Ministries, which provides services to prisoners, the homeless and addicted, according to its website.
Frank Sinito is a financial donor to True Freedom Enterprises. Mike Swiger of True Freedom Enterprises said he is aware of the problems facing Sinito and Millennia and referred Oklahoma Watch to a lawyer who did not respond to requests for information.
Millennia filed a lawsuit against HUD in the first week of December, claiming the agency is seeking to impose $7 million in penalties. In the suit, MIllennia argues HUD’s process of issuing civil penalties has been invalidated by a recent precedent. Millennia also asked U.S. District Judge Bridget Brennan to stop HUD’s administrative proceedings against Millennia and to pay legal costs incurred thus far by Millennia.
In Tulsa, Paths Management has replaced Millennia as the building manager at James M. Inhofe Plaza, a project-based apartment complex that received the state’s lowest inspection score of 7 in August.
A Paths spokesperson told Oklahoma Watch in an email that its first set of repairs and upgrades planned for Inhofe Plaza are focused on major outstanding safety issues, including those related to fire doors, sprinklers, alarms and emergency call systems.
Millennia still manages project-based Savanna Landing in Tulsa.
Residents at Elm Terrace were given emergency housing vouchers at a meeting last week. A HUD spokesperson confirmed that Elm Terrace residents would be offered financial assistance for moving costs and said that HUD expects moving residents to take about four months.
True Freedom Enterprises has not commented on its plans for the dilapidated apartment complex, but Arnold said there is still an investment opportunity at Elm Terrace if a developer wants to renovate the grounds into workforce housing to accommodate an echelon of Duncan residents earning around 80% of the area median income.
Before that can happen, residents living at Elm Terrace face a season of displacement as they seek new homes and new landlords that will honor their Section 8 vouchers.
Oklahoma Watch, at oklahomawatch.org, is a nonprofit, nonpartisan news organization that covers public-policy issues facing the state.
