Troubleshooters: Concerns about Eastbrook apartments
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In tonight's Troubleshooters Report, we're looking into viewer concerns about Eastbrook apartments. The Wilmington Housing Authority purchased the Eastbrook apartment complex on Princess Place drive back in 2005, to provide affordable housing. Instead, the apartments sit empty, because environmental experts say they aren't safe to live in. High levels of mold at Eastbrook prompted the authority to move residents out. City Councilman Ron Sparks inspected the property for the housing authority, and recommended they buy it. The authority is suing his engineering firm for negligence, but we've now learned that even if the housing authority wins its case, Sparks does not have enough insurance to cover the damages. "It's a lot of money that the housing authority has lost,” Gary Shipman said. Gary Shipman is the attorney representing the housing authority. He says the losses are well over a million dollars and that includes the money the authority borrowed to buy Eastbrook, as well as the loss of rental income. "Certainly the revenue losses, those losses have had to be sustained or absorbed through other ways. So look, the taxpayers have a legitimate concern about the closure of Eastbrook," Shipman said. So how did this happen? The WHA paid Ronald Sparks engineering firm about $10,000 to inspect the apartments. In his inspection report, Sparks noted moisture problems at Eastbrook, but said his overall opinion was that the property was in good condition, and even went on to recommend the purchase. The housing authority relied on Sparks’s recommendation when they signed off on the purchase, but it didn't take long before Eastbrook tenants started complaining about moisture problems. "On the basis of the inspection that he conducted, he shouldn't have recommended the purchase." Shipman added. Sparks' contract with the housing authority required that he carry a million dollars worth of liability insurance just in case he missed something, but News Channel 3 has learned that Sparks did not hold up his end of the bargain. He only has $500,000 worth of coverage, no where near the amount necessary to cover the authority's losses.

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When all the facts are shown to the public who will be held accountable then. I know what the facts are in this matter. I'm the one who blow the whistle on the Authority for buying this property in the first place. It as taken me three years to get HUD to look at this documentation and when their report comes out there are going to be a lot of red faces and many question will have to be answered about this purchase and what has followed in the past three years I tried to stop the Authority from buying these units in the first place. I have over five years of documentation that shows this property should have never been purchase and was not shared with those hired by the during due diligent process. That the action of this present Board since is wrong. When I blew the whistle on this matter I had three goals 1.To get those folks out of those mold infested units. 2. To get the resident in those unit aware of what they have been living in so they could have their children check. This present Board are the one that approved the letter that when out to resident not tell them they were exposed to this hazard when they were told to move out. Please see the following news story from this station on this subject. http://www.wwaytv3.com/node/12215 that backs this statement up.
When the facts are known who will be held accountable then.

Ed Lamica

So this property was purchased in 2005 and we are now in 2010 and it is now being addressed. There is no doubt that Sparks did not do his job but who has been dropping the ball ever since? The minute the residents were moved out, suit should have been filed against Sparks to recover the 500,000 in insurance he does have and work begun to remediate these units. Like everything else in life, this service costs more five years later and the mold has been allowed to spread unchecked for that time.

Sounds like the plan all along was maybe to raze them and build the senior apartments and thought if they waited this long they could claim over a million in losses and sue Sparks to get the start up money for their project. I say sue Sparks, but add on whatever moron's idea it was to sit on this housing project for almost five years, when the problem could have been corrected then, even in phases, and the apartments be in use.

Better questions: who owned these apartments before they were purchased by WHA? (And I don't mean some "LLC" - who REALLY owned them?) What price was paid for them and was the probable remediation figured into the appraised price? Any link between Sparks and the seller other than a professional one? Between Sparks and WHA? All arms-length transactions?

From the story: "Gary Shipman is the attorney representing the housing authority. He says the losses are well over a million dollars and that includes the money the authority borrowed to buy Eastbrook, as well as the loss of rental income." Weren't these bought to be section 8 housing? If so, the residents don't pay much if any rent since the federal government is footing the bill. And then the taxpayers have to pay that bill. Again.
Mold can cause serious health problems. For accurate information about the health effects of mold, go to http://truthaboutmold.info.
Mr. Sparks has a problem known as breach of contract. Either he knew he did not have adequate liability insurance, in which case he has the problem; or he pleads he did not know in which case the monkey may fall onto his insurance agent's back. In either case, how can he represent himself as qualified to serve on the Council? The Council oversees a budget of many millions of dollars. It would appear he either ignored his contractual obligation or did not have the business know how to determine his coverage limit. On another note, one must question why the Housing Authority did not require him to provide a Certificate of Insurance prior to commencing his inspection. That's pretty common business practice. IN all candor, it probably costs no more than $50 annually to increase the Liability Coverage limit from his reported $500,000 to $1,000,000. Pretty Cheap if he knew and did not do the right thing. One wonders how he can sit on City Council with this sword of Damacles hanging over his head. What happens if the Court rules in favor of the HOusing Authority? His business is probably incorporated in which case he personally has no liability. In that case, should he be allowed to continue on the Council? Of course, on another note, Mr. Shipman gets paid first from any settlment or judgement. The Housing Authority should not count on the half million dollars in the event the court rules in their favor.
Why would the moisture and mold issues not be remediated? I am a general contractor and run into this mold issue on a lot of repair requests. This should be completed and the property either be used or sold instead of sitting there sponging up our tax dollars.

between the lines correctly, the issue is funding for the remediation.

That and perhaps a campaign to lay blame where blame is due before the next election.