With foreclosure looming for two Little Rock apartment complexes that are home to more than 170 residents who receive federal housing assistance, Mayor Frank Scott Jr. called on the Little Rock Board of Directors to step in and assist the troubled public housing authority in charge of them during a meeting Tuesday.
Madison Heights I and II are located within the larger Madison Heights apartment complex on 12th Street between Cedar Street and Fair Park Boulevard. A number of residents now face the possibility of being kicked out, with a foreclosure set for August 1. More than 70% of residents receive federal assistance, meaning they would likely have a hard time affording market rate rent.
The board made no decisions Tuesday but thoroughly discussed a proposal to provide a $7.5 million loan to the Metropolitan Housing Alliance, which is responsible for the properties, to avoid foreclosure
The MHA is a local housing authority in charge of administering and managing federal housing assistance programs from the U.S. Department of Housing and Urban Development, or HUD.
The agency has been embroiled in controversy over the last few years. In September 2023, the Little Rock Board of Directors voted to oust several members of the MHA board of commissioners after a scathing report from HUD.
The Central Arkansas Housing Corporation, a nonprofit entity affiliated with the MHA to “facilitate the development, financing and construction” of housing in Little Rock, has also come under scrutiny. In October 2023, the reconstituted MHA board ousted the Central Arkansas Housing Corporation’s board. In January 2024, FBI and other law enforcement agencies conducted a search of the nonprofit’s office after money the MHA provided to it went missing.
Members of both boards, which have since been reconstituted, attended the city board meeting Tuesday. They said they’ve been trying to get the housing authority back on track.
Nadine Jarmon, executive director of the MHA, said the agency needs a loan of $7.5 million from the city to pay off $5.4 million of debt incurred on the Madison Heights properties, as well as make repairs to several units and buildings.
The complexes have 52 vacant units between them that need repairs before they can be safely occupied, Jarmon said.
Jarmon previously served as interim executive director of the MHA starting in July 2020 and was hired to the permanent position in April 2021. The MHA board fired her later that year. Two months before she was fired, Jarmon wrote a whistleblower letter alleging that MHA commissioners had wasted federal funds. She sued the agency after she was fired, claiming her termination was in retaliation. Jarmon was rehired on a three-year contract in July 2024, after the board was reconstituted
If everything goes according to plan, the loan will give the MHA enough breathing room to finish getting its affairs in order and bring online the vacant units, after which the complexes would start generating revenue.
If the MHA defaults on the loan, the city of Little Rock would take ownership of the complexes and could sell them to make its money back. The properties have been appraised at $18.7 million, and are expected to be valued at $20 million after repairs are complete. That means the city would make its money back from a loan even if it sold for half of its appraised value, Scott said.
Ward 1 Director Virgil Miller asked Jarmon if the MHA knew how many Madison Heights residents were behind on rent. Jarmon said they would have that data starting June 1.
“There has been a process in the past that … fed into the mismanagement. No, you’re not supposed to get 30, 60, 90 days behind. Did it occur? Yes it did,” Jarmon said. The MHA is in the process of making sure all tenants are paying rent, which might cause pushback from residents, she said.
The board discussed the possibility of holding a special-called meeting next week to decide how to proceed.
“I hope you will all vote yes,” Scott said.
The board also funded a slate of improvements and projects at its meeting Tuesday, including scientific research at the University of Arkansas at Little Rock and new playground equipment in downtown’s Riverfront Park.
Using grant money from the federal Environmental Protection Agency, the city will award $38,984 to UALR’s geology program to conduct water and soil sampling of Fourche Creek, which collects the majority of Little Rock’s runoff.
In September, the EPA awarded Little Rock a grant of more than $270,000 to create a wetlands management plan for Fourche Creek, according to the agenda.
The plan will “promote integration of wetland protection and restoration into watershed
planning with an emphasis of flood mitigation, water quality and climate
change mitigation,” according to the agenda.
Riverfront Park will receive a new, accessible piece of playground equipment to replace equipment the city has removed after deeming it irreparable and unsafe. City directors approved a $110,000 contract with commercial playground equipment manufacturer Landscape Structures Inc.
The downtown park is the latest of several city parks to be upgraded since last fall. Kiwanis Park, Pankey Park, Boyle Park and Kanis Park have also received improvements since October. In April, city directors approved the construction of a new playground in Reservoir Park, which was damaged by the March 31, 2023, tornado that devastated parts of Central Arkansas.
City directors approved a $4 million renovation of the Centre at University Park, a city building with rentable multi-purpose spaces. The city will remodel the current facility and build a 4,500-square-foot addition that will include an indoor therapy pool, exercise room, four pickleball courts with associated locker rooms and additional accessible parking, according to the agenda.
The board also passed a resolution accepting a $78,800 grant from the Arkansas Historic Preservation Program to fund the final phase of a resurvey of the Hillcrest National Historic District, as well as provide training members of the city’s Historic District Commission. The Little Rock Historic District Commission was established to preserve “sites and structures of historic and architectural interest” and encourage private efforts to restore them, according to the city’s website.
At a May 6 board meeting, city directors approved an ordinance by a 6-3 vote to rezone property in the Hillcrest neighborhood owned by Our Lady of the Holy Souls Catholic Church to allow the demolition of the two homes to make way for a 58-spot parking lot.
Cafe Africa, the Little Rock Zoo’s restaurant housed inside a historic building built in 1934, will receive a new roof due to storm damage. City directors approved an $82,000 contract with HD Roofing and Construction, of Conway, on Tuesday.
