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After less than a year, St. Paul-based CommonBond has unexpectedly terminated its contract with South St. Paul to manage the city’s two public housing high-rises, leaving city officials scrambling to find new management.

And though the city has put out a request for proposals to replace CommonBond, officials said that having another entity manage the publicly owned buildings on its own is unsustainable in the long run.

“I think that [CommonBond] had a hard time staffing at the level the contract required,” said Ryan Garcia, the city’s economic-development manager. “Maybe the details of the contract, our expectations, were remarkably high ... but that’s the contract that we wrote.”

CommonBond officials said they opted out of the contract because their reporting systems and software, designed to report directly to the U.S. Department of Housing and Urban Development (HUD), didn’t align with the city’s.

“It really comes down to the unique reporting requirements of public housing and how it placed significant stress on our systems,” said Michele Myers, CommonBond’s director of property management.

CommonBond rarely exits a contract during the first year, she said. It isn’t currently managing any other public-housing apartment buildings, though it has done so in the past.

The two city-owned public housing high-rises were run by the South St. Paul Housing and Redevelopment Authority for decades before CommonBond took over management in January of this year.

But the transition was bumpy from the start, Garcia said. In March, city officials told CommonBond that it was in default of its contract because it had failed to perform “basic yet vital management activities,” such as paying invoices and preventive maintenance.

Garcia said things had improved since. Then last week CommonBond gave notice that it would exit its management contract effective the end of February.

City officials decided Monday to put out a request for proposals in search of possible replacements. But Garcia said the city can’t keep up the current situation forever.

“Long term, it’s not sustainable,” he said. “Funding is uncertain, finding good people is hard.”

Garcia said that the city either could go back to running the buildings in-house, enlist a company to manage them with a city staffer hired to “maintain the city’s interest,” or look into other options with HUD.

The first two ideas could be challenging because of money, Garcia said. Federal funding for the city’s public housing program has been in decline for at least a decade, he said, adding that the proposed 2020 federal budget allots no capital funding for public housing.

City officials will talk with HUD officials and learn about their options soon. There are several possibilities for “repositioning,” a HUD term for the process of taking public housing buildings out of the federal program, Garcia said.

A HUD spokeswoman said public-housing authorities have at least four choices, including opting for Rental Assistance Demonstration (RAD), which would convert the units to Section 8 housing.

“We can’t just hang up a ‘for sale’ sign — that’s not an option, period,” Garcia said.

Affordable but challenging

Public housing typically is managed by a local housing authority and funded through HUD, offering affordable housing to low-income individuals and families.

The South St. Paul high-rises, called the John Carroll and Nan McKay buildings, are open to people with limited incomes who are at least 50; some residents also have disabilities. About 300 people call them home.

On a recent sunny afternoon, the Carroll building was full of life, with residents greeting each other by name in the halls. The building has a towering open space in the center, allowing residents to survey all 13 floors at once.

One resident, who asked not to be named, talked about the challenges when CommonBond took over as management. No one was tracking who was in line to get the next parking space, she said, and the front office couldn’t seem to figure out what each resident’s rent should be. But she added she was “eternally grateful” for her apartment, which she said she wouldn’t be able to afford in a market-rate building.

Another resident, Tom Barger, recently brought a laundry list of complaints about the Carroll building to a South St. Paul City Council meeting, ranging from broken elevators that caused him to miss his chiropractor appointment to unsecured doors that he said let “all kinds of people” inside. “I have to give them two thumbs up because they finally got some hot water in the building,” said Barger.

In CommonBond’s defense, Myers said the nonprofit inherited maintenance issues from the city. “A system in a building ... that large doesn’t just fail,” she said.

Garcia said that whatever the city decides to do down the road, officials will consider residents’ needs.

“How do we maintain affordable, safe, sanitary, quality housing for older residents that may have disabilities that have found this as one of their only options?” he said. “That needs to be our first consideration in whatever we choose.”

Erin Adler • 612-673-1781