DURHAM - The financially struggling nonprofit foundation that announced it was closing Lincoln Apartments in October has sold the complex to the Durham Housing Authority for $300,000, less than 10 percent of the property’s assessed tax value of $4.5 million.

The purchase is part of a possible $110 million economic revitalization and redevelopment plan in an economically distressed area of Southeast Central Durham that the DHA hopes to pay for with grants from the U.S. Department of Housing and Urban Development.

The 150-unit, 16-building low-rent apartment complex spans 10 acres near N.C. Central University and the city’s largest public housing community, McDougald Terrace. Durham’s Crime Mappers website lists more than 100 violent crimes reported within a half-mile of the apartment complex in 2012. If the plan goes into effect, Lincoln will be demolished, which will cost several million dollars.

The DHA plans to board up the complex at the beginning of the year, when any remaining residents will have to leave.

DHA executive director Dallas Parks said the agency paid $10 for the purchase price and the rest to pay off the nonprofit Lincoln Hospital Foundation’s outstanding bills, including utilities owed to the city of Durham and fees owed to its former management company.

“The corporation didn’t have any money, and they wanted to be able to walk away clean,” Parks said.

Planning stages

Future redevelopment of the area around Lincoln and McDougald is in the early planning stages, but last summer Durham won a $300,000 HUD planning grant it can leverage for $1.2 million in further investment, Parks said. The hope is to then apply in 2014 for a $30 million implementation grant the DHA could then leverage for additional investment that could be worth more than $110 million.

Owning additional property in the area targeted for redevelopment will help DHA’s quest for federal funds, Parks said.

“That would be a feather in our cap,” he said. “Site control is very important – we can’t develop an entire area and then right next to it, have Lincoln.”

Lincoln Apartments was built in the 1960s with a federal grant, Assistant City Manager Keith Chadwell said. The foundation split off long ago from the hospital from which it gets its name. One of the original grant’s provisions was that when the Lincoln Foundation paid off its mortgage, the property had to be transferred to a public agency related to affordable and public housing. Last year, the Lincoln Foundation offered the property to a subsidiary of the DHA for $10, but after an engineering study the DHA concluded it would cost $5 million just to bring the apartment complex up to code.

Once the DHA had a planning grant and Lincoln Apartments began to evict the tenants, however, the property became a more attractive acquisition for the housing authority to land bank for future redevelopment.

Door-to-door

An official count of the residents left is impossible because some people living there were not paying rent and had no leases for Lincoln. Hundreds were told Oct. 1 they had to be out by Oct. 31, but were given extensions until the end of the year when many had trouble finding apartments for the same price they had paid at Lincoln.

The DHA went door-to-door Thursday informing those still at the complex they would have to be out by Jan. 2.

“We’re not going to put anybody out before the holidays,” Parks said. “We also are trying to help them find a place to live.”

Housing for New Hope development director Melissa Hartzell said the organization has moved 14 people into new housing so far, with at least 35 more people waiting, including seven moves scheduled for this week. The nonprofit, which has a goal of preventing homelessness, is working to move as many Lincoln residents as possible before the deadline to prevent anyone from going homeless.

“We’re not going to give up on the residents, and we’re going to try to help them,” Hartzell said. “But unfortunately, we can’t create rental units in Durham that don’t exist.”