Dear Mayor Coleman

December 1, 2006

Dear Mayor Coleman,

“Woodland Meadows is cleaner, safer, and better managed in the 10 months since Newbery bought it. There’s been a 38.7% decrease in crime. We think Mr. Newbery has made great improvements.” – Bruce Miller, President of North Harding Road Block Watch in November 2003 Columbus Dispatch article

“Many people did not feel how a low-income neighborhood besieged by drugs and gang violence could turn itself around. But I have seen it with my own eyes: thanks to you, Woodland Meadows is a changed community. The changes occurring at Woodland Meadows are impressive! I commend you for providing employment to over 200 African American men…The renovation efforts represent a community where jobs are created, families have safe, decent, and affordable housing, and lives are better. Woodland Meadows represents hope…winning efforts such as yours are what makes the City Columbus and State of Ohio one of the best places to live…” State Representative Larry Price in February 2004 letter

“There exists a gathering storm that could represent the largest concentration of privately-owned vacant and abandoned buildings in our City’s history. I am speaking of Woodland Meadows, the future of this Eastside complex is in doubt…I am here to say to the current owner and any future owner of the property that we are willing to work with you to turn this property into an asset” – you in February 2006 State of City address

When I read your State of the City address, I was warmed by your words. You see, I have been renovating properties for twelve years, starting with a fourplex in South Central Los Angeles in 1992 and progressively building up to larger and more challenging buildings. By the time I purchased Woodland Meadows on the last day of 2002, I had successfully renovated hundreds of buildings and had amassed an impressive track record. My confidence was strong, as I had taken on problem housing where everyone else had failed and became the one who finally got it right: to wit, in 1998 when I bought the 298-unit Ford Hotel on Los Angeles’ Skid Row, the four prior owners had all gone to jail for slum violations at the property. Of course, no one else wanted to buy it as it represented a sure ticket to jail, so I bought the Ford at a great discount and was able to finally be the one to satisfy the City and clear all the violations.

Thus, when I bought Woodland Meadows, I believed that my formula of being hands-on, employing the community as part of the turnaround, and good old-fashioned hard work would succeed. Remember, I moved into an apartment at Woodland Meadows just above the office and was there to witness the problems first-hand and solve situations first-hand.
This work paid off, as crime plummeted at the complex and in the surrounding neighborhoods, physical conditions improved drastically, and occupancy and collections soared. I even generated some rare positive press for Woodland Meadows in the local media.

Not everything was perfect, though. The costs of the renovations exceeded my projections, and the property was so big that by the time we had renovated all 122-buildings, it seemed unanticipated new problems kept popping up. For instance, the city sewer system on our part of the Eastside had not yet been enlarged, so our basement units (as well as the basements of nearby homeowners) fell victim to backups during heavy rains, which was certainly not something I had expected. Although the property’s financial performance had improved significantly and we had 7-figure reserves, the additional cash needs required that I infuse significant personal cash into the project, as well as borrow heavily. In the end, this kind of felt like when you are at a blackjack table and you end up putting all your chips on one bet, and in this case my bet was on Woodland Meadows.

Nevertheless, income was increasing, we succeeded in obtaining the bond issue to replace our higher-rate construction financing, and we syndicated our tax credits, which were to provide me over a million a year for eight years provided the property was maintained as affordable housing. This million a year was to go towards repaying the money I had borrowed as well as my personal capital, and the property’s cash flow would represent my earnings.

When the ice storm occurred in December 2004, I was confronted with a situation unlike any I had ever faced before. We allowed tenants to break leases and move off the property, but hundreds of families stayed. I gave my credit card out to buy temporary heaters, rent dozens of hotel rooms, and try to accommodate the displaced families. You and the City also came to the aid of the hundreds of families who likewise were confronted with an extraordinary situation. In retrospect, I should have made the decision to close the complex then until the buildings could be restored. Even if I did, though, where would all the hundreds of remaining families go in the middle of winter? Also, my million a year from the tax credit syndicator was to be paid only if I reached and maintained 80% occupancy, and we had just reached that figure shortly before the storm. So, financial reality dictated that Woodland Meadows be restored as promptly as possible. Besides, we were sufficiently insured.

We contracted with Belfor, an international disaster remediation contractor, and truckloads of equipment and armies of workers soon arrived at Woodland Meadows. Rows of generators, temporary heaters, and drying equipment hummed 24/7 as we tried to make the conditions as good as possible. We pulled out all the damaged drywall to prevent the spread of mold, and started a conversion to electric heat to replace the cracked boilers, amongst hundreds of other restoration improvements. I think even Belfor underestimated the magnitude of the damage, and the insurer certainly had great challenges assessing all the wounds that had been inflicted on Woodland Meadows. Finally, the claim well exceeded the insurer’s $5,000,000 threshold, resulting in reinsurance kicking in. This represented great delays in paying the claim, which spooked Belfor and our bondholders Allstate, who got skittish and held back the insurance funds. When Allstate held the funds, Belfor abandoned the project and I scrambled to try to keep all the pieces together. About the same time, your building inspectors increased their inspections, and discovered some structural shortcuts done by former owners PM Group, which only became evident because we had removed all the drywall in the basement units. Soon, even though I was meeting weekly with Trudy Bartley, Dana Rose and others on your team, the 3-day evacuation orders were issued.

By this time, my head is spinning, income is shrinking, my reserves are drained. and everyone is looking to me to solve what was spiraling into an impossible predicament. I am always one to try to work things out amicably, but I had to go to court to get those Temporary Restraining Orders if I had any hope of salvaging what by this point had become everything I had earned over the prior twelve years. I apologize if you felt that this action was disharmonious, but I could not let Woodland Meadows be vacated and be financially wiped out. When we reached the Settlement Agreement, our investors felt somewhat reassured, and we were able to fund and make significant progress towards addressing the City’s concerns. However, then HUD terminated our contract, and the impossible predicament became even more unimaginable. My investors started cutting me off, all the money I had borrowed on my other properties for the benefit of Woodland Meadows came due, and 2006 has sunk into a crushing year.

Nevertheless, I have kept my head up and somehow have managed to stay operational as a developer, although I have almost no staff anymore. I tried to take you up on your State of the City offer, and retained Matt Kallner and John Kennedy, both well-credentialed attorneys with good City track records, to help facilitate a redevelopment plan. We had several meetings with Mark Barbash, Trudy Bartley. Boyce Safford, representatives of Ohio Housing Finance Agency, and others in a quest to find the ideal redevelopment plan. Your team advised me to be cooperative with the relocation, and I did so, going as far as moving the relocation office into the Woodland Meadows Leasing Office. Your team wanted rent rolls and reports on existing tenants, and we provided these. Your team suggested that support would be easier if I obtained partners and other participants in the project, and I brought in Columbus Housing Partners, Gorsuch Management, Rockford Homes, Beacon Management, Kimco Development, Atlantic Coast Developers, Eddie George’s EDGE Group, and Meacham & Appel Architects. Your team recommended that a mixed use project would be received most favorably, and we crafted a plan with single family homes, both rental and for sale, elderly housing and commercial. Your team suggested possible financing tools from the City and others, and we incorporated these into our proformas. Your team suggested that I get community support, so we met with community leaders and our neighbors, and received their input and generated a number of calls to your offices in support of our redevelopment plans. Your team wanted me to meet with your Planning Department, and we did this. Your team wanted detailed financial projections, and these were provided. By June, we had furnished everything your team had requested, including copies of signed purchase offers from a bevy of top-quality partners and participants. In addition, I had regular meetings with your Code Enforcement, Building, and City Attorney staff, and responded to all of their requests, and maintained the property as best I could. We allowed your Fire Department and Police Department, as well as all Central Ohio law enforcement and fire agencies, to use the vacant Woodland Meadows for training.

Thus, I believe that I have demonstrated a willingness to work with the City to craft the best possible redevelopment of Woodland Meadows. Likewise, true to the words in your State of the City address, the City demonstrated your willingness to work with me. However, sometime after the last meeting in late June, your team stopped responding and I heard feedback that the City would not support a redevelopment plan in which I was involved. This was abit shocking, as I had expended precious resources on architects and land use planners as we all appeared to have been making great progress. Oddly, all the momentum we were collectively generating seemed to terminate about the same time the last tenant moved out of Woodland Meadows.

This brings us to the present. I have written this letter to give you some background and answer the question many people ask of me: why don’t you just walk away from Woodland Meadows? I hope you see now that I can’t, as this represents everything I have: my personal future is tied to the fate of Woodland Meadows. Thus, I will continue to fight if I have to. However, I believe that we both have the same goal, which is to “turn this property into an asset”.

Thus, I propose that we meet and try to take steps towards this common goal. I am available at your convenience – please contact me at (213) 494-2471.


Jorge Newbery
Managing Member, Woodland Meadows Partners LLC

Solve Woodland Meadows Initial Posting

Woodland Meadows is a puzzle which needs to be solved. I have tried for most of 2006 to find a solution, I have met with a myriad of potential partners, received guidance and input from City of Columbus and City of Bexlay officials and community leaders, and formulated financing strategies. Nevertheless, the City of Columbus seems to insist that I am a bad guy and that I cannot be an ingredient to any solution. Trouble is that I own the place, so somehow I do need to play a role here. If the City thinks that they will go to Court and somehow declare Woodland Meadows a public nuisance in order to generate a lien and then foreclose on the property, then that is a poor strategy. First of all, the property is not a nuisance. It may be ugly in its present state, but it is not a nuisance. In order to get a judge to declare Woodland Meadows a nuisance, there will need to be ample evidence of the supposed nuisance. I keep hearing of all the police calls and fire calls to the complex, but the sad reality is that these emergency calls have plummeted since the last tenant moved out. In the last few months, I have demonstrated considerable efforts to address the City’s concerns: all the first floors have been boarded, and are reboarded regularly as people break in. I have cut the grass and removed the trash, although dumping on the site is a recurring problem. The second and third floors, as well as the holes in the roof which are a result of Fire Department training exercises – I allowed all the Central Ohio Fire and Police Departments to use Woodland Meadows as a training site this summer, as a public service – are all under appeal and will be decided in court sometime in 2007. Anyway, all the posturing by the Mayor and his team will simply end with us all back in court, with both sides expending precious resources on a fight in which no one will win, and will stray the focus from where it should be: redevelopment of the site. This is a HUGE piece of land, and can really be rebuilt into an asset for Columbus’ Eastside.

Eddie George’s EDGE Group completed several versions of potential land use plans for the site, and these were shared with the City. As a result of a series of what our team thought were productive meetings with the City, Ohio Housing Finance Agency, and community leaders, we crafted a mixed-use redevelopment plan with partners and participants including Rockford Homes, Methodist Eldercare, Atlantic Coast Development, Kimco Development and Gorsuch Management. This was a dynamite plan, and when we presented in early summer to City of Columbus’ Development Director Mark Barbash, he appeared enthusiastic. If this plan had received the blessing of the City, then the existing 122 buildings would already have been demolished. We indicated at the time that we could have the funds ready to pay for the demolition within a week, provided a plan was agreed to by the City. Be aware that at that point, none of my investors were willing to put another dime into Woodland Meadows until the City was on board, as these investors had all felt burned by the City’s past actions in which we spent millions to restore the property after the ice storm, only to have the City turn on us and try to shut us down. After we went to court and got that Temporary Restraining Order, the City sat down with HUD and directed them to pull our HUD contract. I remember getting a call from Lynn Zapp at HUD, who indicated that the City told her that they wanted HUD to pull the contract and convert to vouchers, but that she had indicated that this was not that something that could be done, that we had not done anything wrong. To wit, we had a greatly improved REAC HUD inspection score in November 2004, prior to the storm. Even after the storm, HUD performed a routine inspection in June 2005 and found the physical condition satisfactory.

Anyway, the City said something to Lynn at that meeting the first Monday of December, because we had always had a friendly relationship before then, and all of a sudden she was on board with the City to bust our contract, and refused to meet with us and was generally not very nice to us thereafter. I am unsure what slanderous lie the City spread – there have been quite a few this year, and I would like to share them here, but my attorneys want to wait and make these part of the court case. Anyway, our relationship with HUD was never the same from there and the City got what they wanted: a vacant Woodland Meadows.

Funny thing is people tend to believe what comes out of the mouths of high-ranking City officials. However, when the few people who still watch out for me have pushed for the genesis of this slander, thay are simply told that “we heard this somewhere”. I know that there are some City staffers who are appalled at the conspiracy which has transpired here. I am sure the Mayor is thinking, better to make Jorge Newbery Public Enemy #1 rather than having his administration take the heat for Woodland Meadows.

I have generated interest from many partners and potential buyers in the redevelopment, but they seem to get as far as the City and then the interest wanes. I am told that they are “discomforted” and “discouraged” by the City.

It’s 3:28AM, and I just came up with the idea for the blog an hour or so – it seems like a healthy outlet for all my ideas to redevelop this site. So, I have done my rambling for the evening, and will try to post daily(nightly) – the problem with me keeping thoughts in my brain is that I tend to agree with myself. I always seem to have a rush of thoughts, especially on the sore subject of WOodland Meadows. My thinking is that if I can post them all on line, then maybe others can comment, correct, guide, give input, disagree or agree, create, envision.

There is a solution to Woodland Meadows – maybe some students at OSU would have the freshest perspective. I know that a professor there had a student project in 2005 which was to redevelop Woodland Meadows – I guess that should have been an omen.

To trigger some thoughts: I met with Bexley City officials and community leaders last week and they really want a park here. This sounds like an easy to support reuse, but they do not have the money to buy or build the park. There needs to be a component which generates revenue, but also incorporates some aspects of the athletic fields and park they(and probably Columbus) need. The VA Hospital is being built right across the street, so a medical office building on the corner of James and Allegheny seems appropriate. Furthermore, a hotel could support the guest nights generated by the VA, as well as business generated by the airport. Other ideas have been the new training facility for the Crew(although apparently our site is too small). Also, there must be other services/needs generated by the new VA Hospital – any ideas?

Some affordable housing could be a component, although I think all the Eastside market needs is more 3- and 4-bedrooms: there are plenty of 1- and 2-bedroom vacancies in this submarket. We also still have millions of dollars in Low Income Housing Tax Credits which could possibly be preserved/transferred/tolled as part of a global resolution.

For sale housing is tough right now throughout the country, and I do not believe that we could interest a builder in this until the market improves, which will probably be a few years.

Anyway, these are some ingredients to start your minds wandering – please post other ideas and let’s try to solve this for everybody’s good.

Woodland Meadows Blog Day #2 had 459 views on its first day, so I am glad to see that our message is spreading! I am also pleased that we received a few comments, all supportive, as well as quite a few emails advising that the blog is a productive way to get the truth out, and I even had subscriptions to the blog!a

Traditional media tends to edit quotes and meanings get sensationally twisted. For example, on Monday I told Mark Ferenchik of the Columbus Dispatch something to the effect of “The unfortunate byproduct of the City taking an aggressive rather than a cooperative approach is that the City will continue to see 122 vacant buildings for a year or more while this winds through the courts”. However, when this made the paper Tuesday, the quote read “The City will continue to see 122 vacant buildings for a year or more while this winds through the courts”. This read like a defiant statement and I sounded like abit of a jerk, which probably makes for better news. I still like Mark – I think he is genuine, but he has a job to do.

I would wager that all 122 buildings will come down eventually. My investors will even pay for it – they have offered to do so before, but only in the context of a global resolution to Woodland Meadows which the City is a party to. Otherwise, they spend the 2Mil to demolish and never get it back, let alone the monies already invested. If there is an agreed-upon redevelopment in which the cost of demolition is one of the uses of new project funds, then that makes for a viable solution and we could be pulling demolition permits as fast as the City can print them. However, what is not going to happen is that the City demolishes the 122 buildings and then files a lien for the cost. This further dilutes our equity position and is an unacceptable outcome. Thus, we will be in court protecting our interests. It really is a shame that the City has such a beef with me, because you would think that if we all sat down in a room, we could probably resolve this rather quickly – I think all sides feature some sharp and creative minds.

It’s Not A Wonderful Life After All

So if you have been following the real estate news, you would have found out that Ocwen,
has foreclosed on a Policeman in Akron, OH. My question is what has the world come to, where banks don’t have hearts anymore. Personally the world would be a lot better place if we were to go back to a time where everything was like the Jimmy Stewart’s classic movie “It’s A Wonderful Life”. He worked for a bank that actually cared about the customers and tried everything in his power to let them stay in their homes, he even almost went broke trying to help.

Now on the other end of the spectrum, most banks today are exactly like Potter; stubborn, greedy, and don’t care about anyone else. However, we all know how the story ends. Eventually good overcomes evil. So a message to all of the banks that lack human emotion, “Your day is coming, and once people realize what you are doing to them, watch out.”