Some residents of troubled properties once owned by investment group Vision & Beyond will get a new temporary landlord soon.
Hamilton County Common Pleas Judge Christian Jenkins granted a motion Wednesday from investors allegedly defrauded by Vision & Beyond. The decision replaces court-appointed receiver Prodigy Properties with property manager John Rickert at some properties.
Vision & Beyond co-founders Stas Grinberg and Peter Gizunterman are accused in lawsuits of attracting investors to buy into the properties, then taking out roughly $36 million in mortgages from multiple lenders on the properties without the investors knowing. They’re also accused of using documents falsified by a notary and fleeing the country with the money. Authorities arrested Grinberg in Houston in May. He's currently held in Butler County Jail on federal fraud charges.
Now multiple groups of investors and lenders are battling over control of the properties — and who will take care of them until that's figured out.
Residents react
In the meantime, residents have complained of severe issues at many of the properties. A WVXU reporter has witnessed massive sewage backups, collapsing ceilings, lack of heat and water, and other issues at several of those buildings.
Valerie Mackey lives at a rental home in Price Hill Vision & Beyond once owned. She said she'd been there for more than two decades and that conditions went downhill after the company purchased it. Mackey said she's looking forward to more maintenance on the property under the new receiver.
"As long as they can repair stuff, I'm cool with it," she said, noting her basement had flooded so badly she doesn't go into it anymore. "They just took the money and ran," she said of Vision & Beyond.
Tenants from several buildings gathered outside the Hamilton County Courthouse before Wednesday's hearing to ask the court to appoint a new receiver to replace Prodigy. They're part of a tenant's union advocating for better conditions at the former Vision & Beyond properties.
Heated words in court
The court appointed Prodigy five months ago to manage much of the portfolio of 70 properties abandoned by Vision & Beyond late last year. The company will continue to manage dozens not covered by Wednesday's motion.
That motion covers roughly two dozen properties owned by several groups of investors allegedly defrauded by Vision & Beyond. They're represented by attorney James Papakirk, who filed the motion to replace Prodigy at those properties. Those investors say they've secured their own funding to pay new receiver Rickert.
Debate between Papakirk and Prodigy attorney Zack Prendergast got testy at times. Papakirk argued that Prodigy hadn't lived up to its responsibilities, citing issues large and small at several properties, as well as the fact Prodigy hadn't sought to rent out vacant units in the former Vision & Beyond portfolio.
A tenant at one of those properties in CUF who didn't want to be identified said his lights didn't work and only one outlet in his bedroom was functioning. Papakirk pointed out the property had broken windows and other issues.
"Things have gotten worse," Papakirk said. "This receiver has failed."
But Prendergast said Prodigy has been hamstrung by inability to secure funding to make needed repairs and pay utilities. The company told the court it had financing in May, but the lender backed out. Prodigy says the ongoing battle over who controls the buildings makes borrowing money to repair them very challenging. He said "bizarre animosity" toward the receiver by investors hasn't helped.
"To come in here and say we're terrible at our jobs, it's obnoxious," Prendergast said. "This is not a receiver issue, it's a funding issue."
Prendergast pointed out Prodigy has served as receiver in more than 350 cases, including 100 in Hamilton County.
Emillion Capital, which issued some of the mortgages to Grinberg and Gizunterman and claims interest in the buildings, has been supportive of Prodigy. Attorneys for Emillion argue they have as much right as investors to decide who the receiver for those buildings should be and say changing receivers now would be confusing and expensive.
A new receiver
Residents have been impatient for improvements as the court proceedings continue. Marcy Frazier lives at an apartment building in Price Hill that will be under new receiver Rickert. She was one of about a dozen residents who have formed a tenant's union and marched into Prodigy's offices in April demanding better maintenance and repairs.
Frazier has lived for months with her large living room window broken and boarded up. She had sewage back up into her bathroom sink and her ceilings collapse due to leaks.
"Vision & Beyond had been there eight years, and all they did was patch it up," she said. "Then it would start leaking again from the neighbors upstairs. They never really fixed the problems."
Conditions haven't improved under Prodigy, Frazier said, noting the building got a water shutoff notice in April due to unpaid bills. That bill has since been paid, but repairs haven't been made to her window and other issues have gone unaddressed.
Following Wednesday's hearing, Frazier expressed some optimism about the new receiver — and with potential help from the city. She was one of several former V&B tenants who met with Mayor Aftab Pureval about conditions at their units recently.
Remaining properties under Prodigy
Prendergast told the court Wednesday Prodigy had talked to other lenders and was very close to securing funding for repairs at the rest of the former Vision & Beyond portfolio.
Prendergast outlined roughly $2.2 million Prodigy would like to borrow to improve the Kirby Avenue Apartments, for example, an especially troubled former V&B complex the city has declared a public nuisance. A sewage backup there was so severe Cincinnati City Council approved $400,000 for emergency repairs to avoid having to vacate the complex. Kirby isn't covered by Wednesday's motion.
Jenkins said the decision to hand off management of the properties wasn't a judgment against Prodigy, but simply a practical solution.
"No one is being thrown under the bus," he said. "There's no suggestion here that Prodigy did anything wrong," he said. "It's simply we have competing interests for the properties. This process will drag on interminably if we don't move."
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