Towers unit sold to firm for $2.65M
by DAVID DAVIS, Managing Editor
Mar 14, 2013 | 2366 views | 0 0 comments | 6 6 recommendations | email to a friend | print
North Cleveland Towers is being sold by North Cleveland Church of God to Knoxville-based Lawler Wood Housing LLC. Banner photo, DAVID DAVIS
North Cleveland Towers is being sold by North Cleveland Church of God to Knoxville-based Lawler Wood Housing LLC. Banner photo, DAVID DAVIS
The sale of North Cleveland Towers to a Knoxville company should close sometime next week.

North Cleveland Church of God senior pastor Mitch Maloney said Wednesday the church has agreed to sell the 38-year-old building to Lawler Wood Housing LLC for $2.65 million.

The eight-story building will continue as low-income housing for senior citizens.

“It’s government-assisted housing,” he said. “The people who are already there, their (rental) rates will not change, but there will be a new scale for people coming in ... the people who are already there, their rates are going to remain the same. We made sure we protected that. During the sale, we have tried to look out for the best interests of the residents.”

He said the company plans to spend an average of $25,000 per unit in renovations. The $2.5 million makeover will progress one floor at a time without displacing residents.

“They do it over a period of time. While the residents are out for the day — they said they would provide a place for the people — a field trip or something like that. At the end of the day, the resident comes back home and their apartment is clean,” he said.

The structure was built by the church and dedicated June 2, 1974, “to the glory of God as a ministry to the elderly” under the leadership of former North Cleveland Church of God Pastor T.L. Lowery. It was designed by architect Frank Gibson.

“I think back then, it was just over $1 million to build it,” he said.

North Cleveland Towers contains 106 efficiency, one-bedroom and two-bedroom units. The occupancy rate has remained high throughout the building’s history. It is well maintained and the operation received the highest rating given by HUD.

“It has been taken care of over the years,” he said.

Maloney said Carr Hagin, vice president of development for Lawler Wood Housing, approached him near the end of 2011 about the potential purchase.

“He called several times. We didn’t pursue them, they pursued us,” he said.

The church considered refinancing approximately $100,000 owed on the building about four years ago, but ran into roadblocks due to HUD regulations and couldn’t get it done. The remaining debt will be paid from the proceeds, but either way, the 40-year mortgage would have been paid off in a couple of years.

“They (HUD) said basically, it wasn’t the right time to do anything,” the pastor said. “About two years later, a window opened up and that’s the reason Mr. Hagin called and requested a meeting.”

Hagin returned about three weeks later with an offer that indicated the company was serious. The church shopped the complex to other companies that own and manage similar facilities. Though several of the companies responded, none of the others made offers. Two companies offered to market the building, but suggested amounts less than the offer from Lawler Wood.

The due diligence period took 15 months, including all of 2012 because the sale had to be approved by the church, HUD and the Office of the Tennessee Attorney General.

“There were things we were concerned about. Number one, we looked at it as a ministry all these years. As part of the negotiating process, we asked for the continued right to do ministry,” he said. “We wanted to make sure if we did sell to someone else that we had the right to maintain the right and privilege to continue to offer ministry services and care ministries.”

Church members H. Bernard Dixon has chaired the board of North Cleveland Towers Inc., since its inception and J. Wayne Walston has been the rental agent the past 25 years. He said the board has paid close attention to the building over the years.

“He (Dixon) and the whole board deserve to be commended for their service and ministry there,” he said.