After landlord fails to pay $1.3M water bill, nearly 900 apartments have water turned off

Correction: A previous version of this story incorrectly stated the name of the president of Genesis Housing Foundation.

For more than 21 hours last week, residents at the Capital Place apartments and the Berkley Commons apartments had their water shut off.

In the 10 years that Citizens Energy Group has provided water services to the city of Indianapolis, it had never shut off the water to a large apartment complex, Citizens spokesperson Dan Considine said.

Until now.

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The cause of this unprecedented calamity for the 324 units at Capital Place and the 544 at Berkley Commons on the South side?  A $1.3 million unpaid bill by the landlord.

“This is really a last resort,” said Considine. “It’s not something we wanted to do, we certainly recognized it created a hardship for the tenants of those apartment complexes who were paying their utility bills through their rent.”

Through an examination of tax filings and property records, IndyStar discovered both apartments are ultimately owned by JPC Charities, a landlord notorious for their severe neglect and mismanagement of the Lakeside Pointe apartments in the Nora neighborhood and others across the country, from Akron, Ohio to Chicago.

Lakeside Pointe has attracted a lawsuit from the state attorney general, a potential lawsuit from the city of Indianapolis, and numerous civil enforcement actions from the Marion County Health Department. It's failed to pay water bills in the past, but this is the first time that's resulted in water being turned off. 

In this case, the city of Indianapolis was forced to step in to get the water back on. 

The city agreed to pay more than half of the water bill for Berkley Commons and Capital Place owed to Citizens Energy Group by JPC Charities, and officials said they hope to recoup the debt from the landlord.

“This is not a debt that is going to go away,” said Matt Giffin, deputy corporation counsel for the city. “The city or Citizens is going to do everything we can to recover the amount that’s owed.”

The city is quite familiar with JPC Charities. City officials are leveraging a lawsuit as the owner considers a sale at the Lakeside Pointe apartments.

Advocates for tenant rights say the whole saga raises the question of whether providing low-income, affordable housing should be considered a charity or if it is a basic human right. The properties owned by JPC Charities have all enjoyed tax-exempt charitable status. 

More than 500 housing code violations racked up

The property magnate that is JPC Charities operates under many names, making it difficult to track which apartments they own.

By analyzing the tax forms of the apartments and Marion County tax assessors’ property cards, IndyStar found that Berkley Commons apartments, listed as being owned by ‘Berkley Commons LLC’ on property cards, is registered to the same address as JPC Charities. Meanwhile, Capital Place apartments is listed as a property belonging to JPC Affordable Housing Inc, another name for the group, on their 2019 non-profit tax form.

But one thing is clear: every apartment JPC Charities are known to own in Indianapolis has racked up more than 500 housing code violations in the past seven years, and tenants report abject conditions.

From January 2015 to Aug. 19, 2021, a total of 8,379 violations were reported at seven of the Indianapolis complexes the group owned at the time, according to an IndyStar public record request of Health Department data.

Two fire-damaged buildings at Lakeside Pointe still sit, an eyesore, unrepaired and undemolished, months after a blaze destroyed them. They failed to show for a January Marion County demolition hearing, causing the hearing to be postponed to March.

Indianapolis:Tenants at Lakeside Pointe suffered years of neglect. Then, their homes caught fire.

The president of the organization, Oron Zarum, did not respond to email requests for comment.

Mayor Joe Hogsett said the city will use every available resource to hold the property owner accountable for putting tenants at risk. 

“By working with the Marion County Public Health Department, partners, and the community," he said, "we will ensure residents have access to basic services and stable housing moving forward."

But, for the first time, some tenants might have a glimmer of hope.

Two of JPC’s apartments, Crystal Bay and Woodhaven apartment complexes, were acquired by a new owner, Genesis Housing Foundation in August last year.

Marion County health department spokesperson Curt Brantingham told IndyStar Thursday that property conditions have greatly improved since then. The volume and severity of open housing code violations at Crystal Bay have dropped from 47, including six emergencies, in the week before the property was sold to 22 on Feb. 17, none of which were emergencies. The grounds have been cleaned and the road conditions improved.

Is providing safe and habitable housing ‘a charity’ or a right?

While residents at these properties endured housing violations for years, the owner, JPC Charities, profited from massive tax breaks as the properties enjoyed tax-exempt status. They claimed in their tax forms that they served a ‘charitable’ purpose by providing affordable housing.

Genesis Housing Foundation is the new owner of Crystal Bay apartments and Woodhaven apartments. It acquired Crystal Bay for $21.6 million and Woodhaven for $15.2 million on Aug. 20 last year.

Their lawyer, Michael Red, said at a property tax assessment board of appeals hearing meeting on Feb. 18 that they took over the property when they heard about the situation out of a “moral obligation.”

All officers on Genesis’ board are based out of New York.

Red said they repaired all the emergency housing violations at Crystal Bay since they took over and plan to make significant improvements to the beleaguered property.

However, one thing remains the same: Genesis, like JPC Charities, is requesting to be granted charitable tax-exempt status on the basis of providing ‘safe, habitable, affordable’ housing.

The property tax assessment board of appeals questioned whether providing safe and habitable housing should be considered charitable or if it is a right, at the Feb 18 meeting.

Advocate for low-income tenants, Elizabeth Essink, said the state needs operational definitions of what qualifies a group for a charitable exemption.

“Safe and habitable housing is a required provision of a landlord entering into a landlord-tenant contract, not an extension of kindness, charity, or going above and beyond,” Essink told IndyStar.

The board of appeals decided that Genesis may remain exempt for 2021 but has to reapply for tax-exempt status in 2022 and 2023 to show proof they are providing charitable services.

A lawyer representing Genesis, Michael Red testified at a Property Tax Board of Appeals meeting on Feb. 18 that Genesis is not affiliated with JPC Charities.

City lawsuit against owners stalled

Advocates have questioned why it is so difficult to hold the owners of these beleaguered properties accountable.

Claire Holba, executive director of Indianapolis-based non-profit Patchwork Indy, questioned at a Jan. 25 press conference why city, county, and state officials have continued to scrap for a solution to the problem landlord.

“Why has it been so hard to achieve a solution for Lakeside Pointe?” she said.

Despite announcing on Jan. 25 that they plan to sue to owners, the city backpedaled a week later, saying they will hold off on the lawsuit until the end of February as Lakeside Pointe is being sold.

City officials on Tuesday said they do not have an update on that progress, but said the mortgage lender and buyer think additional litigation prior to the sale would complicate matters.

“Based on the track record of the prospective buyer and the lack of attention to the tenants’ needs being demonstrated by the current owner, we believe a change in ownership would benefit the residents,” city spokesperson Mark Bode told IndyStar.

Bode said that the new owner needs to be given a fair chance to remedy the conditions.

Until then, residents said they can only hope the new owner will bring them the change in fate for which they have been waiting.

Contact IndyStar reporter Ko Lyn Cheang at kcheang@indystar.com or 317-903-7071. Follow her on Twitter: @kolyn_cheang.