Fox 8 Defenders: Nonprofit that owns Willows received millions in state financing

Published: Nov. 14, 2022 at 10:07 PM CST
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NEW ORLEANS (WVUE) - A religious nonprofit that owns local apartment complexes and pays no property tax is making millions of dollars in revenue every year.

Through our Fox 8 Defenders reports, we’ve shown the substandard living conditions residents face at The Willows and Parc Fontaine apartments. Now, one lawmaker says he’s working to strip Global Ministries Foundation of its tax-exempt status, and he has other lawmakers willing to help.

When it applied for state financing to purchase the properties, Global Ministries Foundation promised to provide tenants at The Willows and Parc Fontaine with after-school tutoring for kids, computer training sessions and pregnancy counseling.

“This bill of goods that they sold, they clearly have not delivered on,” state Rep. Jason Hughes of New Orleans said.

During our visits, we found deteriorating buildings and residents desperate for help. Our series of stories over several months on the Tennessee-based nonprofit exposed several problems within the apartment complexes that Global Ministries owns.

“I was heartbroken,” Hughes said after seeing the reports. “I was livid.”

Hughes said Fox 8′s reports, which resulted in some repairs to tenants’ units, inspired him to help the people we interviewed.

“No human being on Earth should be living with that, certainly not in the United States of America,” Hughes said.

Scouring through financial documents we received from the Louisiana state treasurer’s office, we found that in 2012, the state bond commission approved $35 million in financing for Global Ministries to purchase Parc Fontaine in Algiers. Richard Hamlet, an international evangelist, runs the nonprofit.

“I don’t think anyone was aware of their track record at that time,” Hughes said.

In 2014, the Finance Authority of New Orleans approved $12 million in bonds for The Willows in New Orleans East. Because it’s a nonprofit, Global Ministries pays no property tax.

“At the end of the day, they’re slumlords,” Hughes said. “They’re not doing right by residents and they do not deserve public money.”

It’s a sentiment City Council president Helena Moreno shares.

“When you issue fines and things like that, it really doesn’t matter, because there’s really no tax bill,” Moreno said. “So that’s how (Hamlet) can skate around these different things.”

So Hughes and Morena said they’re collaborating to change the law.

“I’m currently working with House staff, they are drafting legislation as we speak,” Hughes said. “That would give the City Council the authority to force The Willows to pay property tax.”

Related coverage

FOX 8 Defenders: City Council President calls for actions at The Willows

FOX 8 Defenders: CEO vows to clean up The Willows apartments

Fox 8 Defenders: Residents describe deplorable conditions at Parc Fontaine apartments

FOX 8 Defenders: Willows management attempts to end lease of family who spoke to FOX 8

A state law change would mean any local municipality across Louisiana could pull the tax-exempt status of a nonprofit that owns a housing complex, if it is deemed to be providing substandard living conditions.

“I’m confident I can make a compelling case, given the track record of this organization, to my colleagues in the legislature,” Hughes said.

The 990 tax forms filed by the nonprofit in 2019 show Hamlet paid himself roughly $500,000. Also on the payroll were his wife, his two sons and a daughter.

They’re all listed on a website for the Ministry Outreach Foundation. Ginger Hamlet is listed as the women’s outreach director, earning $43,000 in 2019. The 990 says it’s compensation for services rendered.

Richard Hamlet Jr. -- also known as Lucian Hamlet -- is listed as the director of asset management services, and made $102,000. So did his brother Hunter Hamlet, listed on the website as the director of investment oversight. Their sister Natalie Metcalf made $28,000, her role described as a corporate secretary.

“I suspect that he’s taking home, along with his wife who is a part of the entity, far more money than that,” Hughes said.

Global Ministries and its housing nonprofit -- GMF Preservation of Affordability Corporation -- brought in more than $42 million in revenue in 2019 from its housing complexes across the country. The tax documents show The Willows made a little more than $2 million before expenses, and the value of the property is more than $10 million. In May, we spoke to Richard Hamlet over the phone. He told us he’s invested $1.5 million into The Willows just since Hurricane Ida, to clean it up and repair storm damage. He also pledged to do right by the community.

“This is a situation where I’m reaching out to the local government folks to help me to collaborate,” Hamlet said. “I’ve got pastor friends of large churches there calling me, saying, ‘We want to help you, Rev. Hamlet.’ ... We’re going to take this thing up to the next level, because that’s what I want to do.”

But tenants we’ve spoken with say that promise, much like the services that Global Ministries told the bond commission it would provide, appear to be a far cry from what life at the complexes is really like.

When we requested comment for this story, Hamlet responded by sending a statement that said:

“First of all, the LA state statute which provides for property tax exemption for qualifying IRS approved 501c3 Affordable Housing owner/operators is based without prejudice on the nonprofit legal ownership structure, limits on household renters’ income levels (lower income), as well as restrictions on rental prices when applicable. The exemption our organization has had on the Orleans Parish-located properties has been duly in place since we purchased these properties several years ago. The exemption rightfully has no correlation to the property’s physical or operating condition, as the 501c3 housing sponsors are encouraged to invest in existing challenging properties, which many times are laden with crime history, physical maintenance/age challenges, as well as lower-income resident profiles with financial distress.

“We have complied with all requirements to maintain the statutory exemption, and will continue to do so. Any amount of taxes which would ordinarily be paid by a commercial owner on our parcels is far less than the much incremental higher $$ amounts our organization has invested/funded in the properties within our mission to provide quality affordable housing to our residents.

“The Covid lockdowns in 2020 and 2021 resulted in our organization not being able to collect lease rentals from large percentages of the residents with leases for several months, causing significant financial hardship to our property operations and the lack of available funds to maintain the properties. Also, we have funded multimillions of dollars the past 14 months since the catastrophic Ida storm damage, working to restore the properties to a stabilized posture. The Covid-induced shortage of supplies and available qualified construction workers resulted in the renovation work progressing at a slower pace than needed. This contributed to the delays in roof/mechanical component replacement, which caused the water issues within many units.

“The true definition of a slumlord is an owner of a property who drains any available property operations cash flow for their own personal use, instead of needed upkeep to maintain a quality housing property. Our situation on these Orleans properties is the opposite. A slumlord does not fund as the owner millions of dollars into the improvement and operation of the housing communities for the direct benefit of our residents, without receiving any funds of course back from any property cash flow.

“During these past challenging years in NOLA, the properties have experienced substantial operating deficits, which have necessitated our stepping up with infusions of additional cash investment for the benefit of our resident community. Our desire is to continue to improve the properties under our ownership and enhance our management of the day-to-day operations.”

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