Pair of lawsuits filed against Springfield real estate companies

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A pair of lawsuits filed yesterday in Greene County Circuit Court name several Springfield real estate companies in alleging rights afforded through the use of the federal Low-Income Housing Tax Credit have been infringed upon.

Members of the Cedarwood and Rosewood Tenants’ Union have filed both a class-action lawsuit and individual claims alleging the defendant companies engaged in breaches of contract, negligence and violations of the Missouri Merchandising Practices Act. Kansas City-based nonprofit Heartland Center for Jobs and Freedom Inc., which is representing the tenants in the litigation, announced the litigation in a news release this morning following a gathering outside the Greene County Historic Courthouse.

The individual lawsuit filed by plaintiffs Shawn Koch, Heather McClarnon, Reannan Miller and Teresa Myers names the defendants as follows: Zimmerman Properties LLC, Wilhoit Properties Inc., Cedarwood Terrace Apartments LP, Rosewood Estates LP, Cedarwood Terrace LLC, 604-1120 Sunset LLC and Bryan Properties. The class-action suit from plaintiffs Ramona Teeter, Jami Johnson, Shellastine Williams and Emily Hester names those companies as defendants, as well as GPS Property Management LLC and the Missouri Housing Development Commission.

Developers that used the LIHTC incentive were generally required to maintain properties at an affordable rate for 30 years, according to past Springfield Business Journal reporting. The lawsuits allege the owners of the Springfield properties are attempting to force them out early and in violation of state and federal law. 

The lawsuits allege Zimmerman Properties, the previous owner of LIHTC housing Rosewood Estates and Cedarwood Terrace, and its affiliates opted out of the program in 2022, 10 years before the compliance period ended. The tenants allegedly were not informed of the opt-out until two years later, allege the lawsuits, which seek court approval to keep them in the LIHTC program.

Both Rosewood Estates and Cedarwood Terrace were purchased by Elevation Enterprises LLC from Wilhoit Properties, part of the Zimmerman family of companies, according to past SBJ reporting. The lawsuits allege the properties have been set up for transition to luxury housing, which the defendants say is in violation of the LIHTC program. According to the release, LLCs operated by Mitchell and Amanda Jenkins of Elevation Enterprises bought the properties. 

“When these companies accepted millions of dollars in taxpayer dollars, they took on legal duties to ensure long-term, affordable housing,” said Gina Chiala, Heartland Center for Jobs and Freedom executive director and attorney, in the release. “Zimmerman Properties, Bryan Properties and the current owners of Rosewood and Cedarwood have broken the law in an attempt to boost profits. By standing up and taking action, we believe the tenants will win, and that would be a victory for everyone.”

SBJ reached out this morning to the defendants named in the lawsuits. A spokesperson with Bryan Properties, which manages Rosewood and Cedarwood, declined to comment, and officials from other defendant companies could not be reached by deadline.