The lingering legal battle between the city of Atlanta and Millennia Housing Management over the long-condemned Forest Cove Apartments has complicated the Ohio-based mega-landlord’s plan to sell the complex, a company attorney said Wednesday at a hearing over a settlement agreement with the city that’s in limbo.

Millennia bought Forest Cove from Global Ministries Foundation in April 2021—after the U.S. Department of Housing and Urban Development (HUD) ordered the latter to offload its national Section 8 portfolio due to mismanagement. The new owner promised to spend upwards of $56 million to renovate the complex’s 396 dilapidated and dangerous units.

But in December 2021, an Atlanta judge deemed the complex a public nuisance and ordered it demolished by the following fall. Millennia appealed the ruling in Fulton County Superior Court, and subsequently drafted a settlement agreement with the city—but the condemnation ultimately cost the property its HUD subsidies and any chance of securing tax credits to help finance the rehabilitation. 

Millennia’s lawyer, Kurt Lentz of Baker Hostetler, told Fulton Superior Judge Eric Dunaway during a Sept. 27 hearing over the settlement agreement that losing the HUD Section 8 rent subsidies for Forest Cove and being knocked out of contention for the Georgia Department of Community Affairs’ competitive Low Income Housing Tax Credit program “affects the saleability of the property.” 

That also makes refurbishing the property—or even maintaining it—a financial challenge, he added.

“The client is working toward the sale of the property but is currently looking at a multi-million-dollar loss,” Lentz said at the hearing.

As part of Millennia’s proposed settlement with the city to avoid razing Forest Cove, it owes $9.7 million to cover the costs the city incurred to relocate the complex’s nearly 200 Section 8 renters. But Millennia doesn’t have to pay that off until…