Leaking pipes and other hazards at Birchwood Apartments in Grand Marais stir concern

It was Christmas Eve when Suzy Eklin noticed water leaking from the ceiling in her apartment.

Just one day before, a severe winter storm wreaked havoc on nearly every property in Cook County. Many, from the end of the Gunflint Trail to Schroeder, lost power during the record-setting storm.

Water dripping from the ceiling was a familiar sight and sound to Eklin, a longtime resident of the Birchwood Apartments in Grand Marais. Six months before she’d been forced to move from her primary residence at Birchwood due to excessive water damage from leaking pipes. This time, in her temporary apartment, the timing couldn’t have been worse. Following the wind and snow storms that ripped across the region Dec. 22 and 23, a bulk of the Birchwood Apartments were without heat. On top of that, a new leak popped in the ceiling above her kitchen.

“Christmas Eve I came out here in the morning to get water and everything was wet,” she said. “Everything I had, like baked goods that were sitting here, they were all swollen up and filled with gross celling water.”

The conditions at the Birchwood Apartments are a growing area of community concern. In recent weeks, officials from the Cook County Public Health Department, Cook County Sheriff’s Department, local elected officials, and representatives from ARC Northland in Duluth, a regional nonprofit that protects the rights of people with disabilities, have all visited Birchwood in hopes of learning where things went wrong and what can be done to help. Among the current and persistent issues at Birchwood are leaking pipes, mold on the walls, rotten sheetrock, failing appliances, a lack of responsiveness to the needs of the tenants, walkways not properly shoveled in the winter, and more.

Becky Lambert is the Arrowhead Regional Quality Council Program director at ARC Northland. She told WTIP that the conditions at Birchwood “are not okay,” and that living conditions in federally-subsidized housing simply need to be better.

“Their apartment building is falling apart around them,” she said, “and no one is doing anything about it.”

Lambert and her organization first became aware of the issues at Birchwood following a series of interviews they were doing with people in the region who have disabilities. The purpose of the interviews was to see what types of services people with disabilities are receiving in the far reaches of northeastern Minnesota. During the course of these interviews, the team at ARC were shocked to find the circumstances people were living in at some of the apartment complexes in Grand Marais, most notably Birchwood.

“No matter how many times people point out the problems and follow the procedures as they’re supposed to be followed, submitting claims and requests for maintenance, things still just are not being addressed,” she said.

The Birchwood Apartments were built in 1992 as federally-subsidized housing in Grand Marais. There are 24 units in two separate buildings that make up the apartment complex. The apartments are either two or three bedroom units, about 770 sq. ft. and 930 sq. ft., respectively. The tenants range widely in age, including families with young children. When it was being built, the developers received funding in part through the Section 515 Rural Rental Housing program. This means tenants in Birchwood can qualify for various rental assistance programs, and many of them do.

Connecting the dots on what led to the abundant and ongoing issues at Birchwood creates a map of bad communication and lack of accountability. WTIP interviewed more than a dozen people for this story.  Among the reasons people noted for why Birchwood is in such bad condition are policy changes with the United States Department of Agriculture’s (USDA) Rural Development program due to the COVID-19 pandemic, and issues with two rental companies: Minnesota based DW Jones Management, Inc., and NETA Property Management out of Fargo, N.D.

In spring 2020, during the early days of the pandemic, federal inspectors from the USDA stopped doing inspections on federally-subsidized housing, according to Danielle Logan, the public affairs specialist for the USDA’s Rural Development office in Washington D.C. She told WTIP “inspections were on a pause from March 2020 to summer 2022 in-line with COVID-19 restrictions that were in place.” However, according to an email Logan sent to WTIP late in the afternoon Friday, Jan. 20, there will be a federal inspection happening soon at Birchwood.

“The next inspection of Birchwood Apartments will be on Tuesday, Jan. 24,” she said, while offering little in the way of details regarding the extent of the inspection, or what it could mean for the future of Birchwood.

In terms of local oversight, the city of Grand Marais has neither an inspection standard that occupied dwelling units must adhere to, nor does it have a team to do inspections even if such a code were in place, according to Jason Hale, the director of the Cook County Housing Redevelopment Authority (HRA).

This lack of oversight appeared to have a trickle-down effect at Birchwood, as maintenance issues started to surface from the lack of attention. DW Jones Management was in charge of keeping operations afloat at Birchwood for many years until they ended their contract in September. Following that, NETA signed on for just a few months before the company broke their contract, which now expires Jan. 31. Repeated phone calls and emails for this story to staff at DW Jones and NETA went unanswered.

Lambert said DW Jones and NETA are “the ones that are letting these issues go without being fixed.” However, she added, it is subsidized housing, so others need to be held accountable, not just the property management companies.

“So in the end, it’s the government that is lacking oversight here,” Lambert said. “The money is going somewhere and issues are not being fixed. So there’s a whole mess of people who should be held accountable here.”

Lilean Sedlacek is an owner and one of the original investors in Birchwood Apartments. Sedlacek told WTIP,  “The Birchwood Apartments have provided over 30 years of family housing to possibly thousands of people.”

When the apartment complex was built, Sedlacek said, there was “hardly any community support” to build affordable housing in Grand Marais.

“There actually was more of a ‘not in my back yard’ movement,” she said, “except for the people that needed the housing.”

Sedlacek is a former Cook County resident and realtor, though she moved out of the area years ago. Her primary residence these days is in Traverse City, Michigan. Sedlacek said she was interested in creating the Birchwood Apartments to address what continues to be a critical issue facing the community 30 years later: a lack of housing for local and potential residents.

In order to build the apartment complex, Sedlacek and her business partners took out a 50-year federal loan for more than $928,000. The loan, with a federal subsidy, had an interest rate of 1 percent. A second loan for nearly $50,000 was added a year later due to project cost overruns. According to the most recent data available, as of early 2022, more than $774,000 remained on the loan. When WTIP asked Sedlacek why so much debt remained on the loan after three decades, she said: “The loan has been paid per the terms of the mortgage, with the exception of a deferral of payments during the COVID epidemic, which, in turn, extended the term of the mortgage. The second mortgage was taken out because the cost of construction ran over budget. Rock outcroppings caused cost run overs. The money collected has been spent on the apartments.  The maintenance, upkeep, repairs, utilities, snow removal, staffing are all part of the budget. There is a small reserve account that is in place for capital expenditures, which is not enough.”

Once built, it did not take long for issues to surface at Birchwood. Community complaints about the structural integrity of the building swirled early and often. During an October 1992 meeting of the Grand Marais City Council, Sedlacek “responded to the rumors and charges of shoddy workmanship that have been circulating through the community” about Birchwood, according to a report that year in the Cook County News Herald.

During the meeting, Sedlacek told the city council, “You are charged with a community responsibility, and you haven’t discharged that responsibility. You’ve allowed rumor and innuendo and accusations to flourish.”

At the same meeting in 1992, former co-owner of Birchwood David Reitter reported his experience in hundreds of similar moderate-cost apartment projects in many communities, and said not one of them has had problems of this kind, according to the News-Herald.

“They are quality housing units, and we intend this one to be the same. It’s a million-dollar project,” he said. “We as owners, the citizens, the FHA and the residents all should be proud of it.”

Reitter died in 2013. As he was more closely involved with operations at Birchwood in comparison to other members of the ownership team, Reitter’s death, Hale told WTIP, may have contributed to the general feeling of “who needs to keep tabs on these apartments at Birchwood” sentiment that seem to be a central piece of the ongoing issues.

No matter who is to blame for what led to the current conditions at Birchwood, one group that should not be held accountable, Lambert said, are the people who live in the apartment complex.

“That’s the big issue here, is that the tenants are the ones that are paying for it,” Lambert said. “But no one else is doing anything about it.”

***

Inside her “temporary” apartment at Birchwood, Eklin appears to be mostly comfortable. A large flat-screen TV adorns the southeast corner of the apartment. An electric fireplace adds a feeling of coziness to an otherwise gray afternoon in January along the North Shore. Despite the fact her ceiling is missing from the kitchen following the leaking pipe incident during the holidays, Eklin’s general approach to living at Birchwood is that she’s glad to have a roof over her head in the winter, albeit one wrapped in plastic.

“I do wish I was across the hall, in my home, but it’s okay in here,” she said.

Eklin has been living at Birchwood for the past 16 years. She’s experienced a variety of problems specific to the apartment complex during that time, but she still maintains that she enjoys living at Birchwood. She does not want to move away from her home, she said.

However, since late July, Eklin has been living in an apartment across the hall from her primary residence. On the night of July 20, she explained, a pipe started to leak in the hallway outside her door and eventually in the roof above her apartment. The leak was so extreme it set the building’s fire alarm off. It wasn’t until later in the night, after the fire department had already left, that Eklin and her neighbor discovered the extent of the damage and how much water was coming in. As it was now late at night, Eklin set buckets out to catch the dripping water from the ceiling. She was hopeful a plumber would come the next day, but she couldn’t just watch the water pour in all night, she said. After carrying out bucket after bucket full of water, Eklin said that at “about 5:30 in the morning, my arms just stopped working. I don’t even know how many gallons it was. There was so much water.”

Eventually a plumber did arrive from Silver Bay to address the situation, Eklin said. The plumber was brought in by the property management company, DW Jones Management, Inc., headquartered in Grand Rapids, Minn. DW Jones is no longer affiliated with Birchwood. At the time, the property management company told Eklin she would need to take shelter in a motel for a few days so the leaking pipe could be addressed and the apartment could be dried out. Eklin didn’t want to leave the apartment complex, so she suggested staying in the unit across the hall. That apartment was empty at the time, as the previous occupant had moved out a month or so before. The parties involved agreed it was a reasonable solution, albeit temporary. The understanding was that Eklin would be displaced from her home for three days. That was six months ago. Her previous apartment continues to have serious issues with leaking pipes. The ceiling has been ripped out, as has the carpet in the living room. When staff from the WTIP News Department visited the Birchwood Apartments Jan. 17, standing water was visible on the floor in at least two rooms in the apartment. A large hole in the ceiling above the bathtub is a reminder of previous leaks. Mold was visible on the baseboard near the kitchen. Based on even the most optimistic of outlooks, the unit is unlivable.

Eklin, who was not hesitant to tell WTIP that she deals with a number of mental-health conditions, said the abrupt move from her home and continually dealing with leaking pipes is taking a toll on her well-being.

“It’s like oppression. What is going on? Why are poor people being so brutalized by our government? I don’t get it,” she said. “And I’m saying our government because this is federally subsidized. And where does the buck stop? You know, it’s unacceptable for anybody to be living like this. This is a good town. It’s an amazing town. People come here from all over the world. And we’re living right up the road, living like it was a third-world country some days. It’s not okay.”

***

Sedlacek is planning to visit the Birchwood property in February. She said at least three former tenants are planning to accompany her when she visits the property and that they plan to work as a team to “clean up” the apartment complex. However, multiple people WTIP interviewed for this story believe it will take more than good intentions and a mop or a broom to restore the Birchwood Apartments.

“It’s going to take a team,” said Cheyenne Mcentee, a local resident and the current caretaker at Birchwood.

Mcentee owns her own company based in Cook County, Handy Babe Services, and started working as the caretaker in mid-December. She said it will take organized and professional work from “a contractor and electrician, a plumber, and just a general handyman” to restore the apartments. For example, Birchwood needs new all new plumbing, Mcentee said.

“The pipes, they just keep busting, busting, busting,” she said. “A crew just has to come in full-time and overhaul the whole thing. And that’s going to be the only way to fix it. Because we just can’t keep putting band aids on broken things.”

Sedlacek said that aging infrastructure at Birchwood “is truly what we are up against.” Her goal, she said, “is to not put a band aid on the problems, hoping they will go away, but to rehab the property with updated plumbing, to start with. My visit up north will help to point us in the right direction.”

Mcentee recently submitted her letter of resignation and will no longer be the caretaker at Birchwood as of Jan. 31. During her short tenure at Birchwood, she had to deal with a variety of issues from leaking pipes to broken heaters, and the amount of work to get the apartment back on track is simply too much for one person, she said.

Aging infrastructure is a chronic problem at Birchwood, according to multiple people WTIP spoke with for this story. Compounding that issue, however, a tenant who vacated the complex near the start of this winter left the windows open on their ground-level apartment when they moved out. Nobody from or hired by NETA bothered to inspect the apartment once it was vacated, Mcentee said, which led to broken pipes and a fried boiler pump. For her part, Mcentee said her list of things to accomplish was so lengthy when she started in mid-December she never went in the vacated apartment. Regardless, that damage resulted in no heat for a number of residents following the severe winter storm in late December. This is the same storm that ruined Eklin’s baked goods on Christmas Eve. Following the outage, Mcentee went door-to-door offering space heaters to Birchwood tenants as frigid temperatures gripped the North Shore in the final days of 2022.

“The day after Christmas, those pipes busted and water got everywhere,” Mcentee said.

A plumber was able to shut the water off eventually, but the damage was done.

“Now that apartment is empty and wet,” Mcentee said. “It smells in there and is moldy from the water damage.”

Cook County Sheriff Pat Eliasen said tenants in any type of home in Cook County deserve a safe place to live.

“In Cook County, we have an obvious need for housing,” he told WTIP, “and the housing that is available must be habitable and properly maintained.”

***

Sedlacek maintains that she spearheaded the creation of the Birchwood Apartments 30 years to address a need that still remains: more affordable housing. She has personal experience with the struggles that come with trying to find a place to live in Cook County, she explained. Many years before Birchwood was built, Sedlacek said, she and her former husband started living in a “shack” with an outside pit toilet. Following that, they lived in a mobile home “out in the country that froze up all winter.”

“I’ve lived in some very substandard housing,” she said. “I wanted to help the community so that wouldn’t happen to others.”

There’s a certain sense of pride many Cook County residents take in establishing a homestead in the community. Young couples, sometimes with children in tow, are known to live off-grid in yurts or rustic cabins. It’s a way of life in Cook County, the sentiment goes. This is a tough place to live. That’s just how things are up here, community members are quick to point out. However, apartments with leaking pipes and units that should be heated but aren’t for an extended period during the winter are not part of this romantic narrative.

During a recent January evening at her home in Duluth, Becky Lambert said she started reading a new book and immediately thought of Grand Marais and the situation at Birchwood. The book Lambert was reading is “The Need to Be Whole: Patriotism and the History of Prejudice,” by Wendell Berry. To sum it up, the book is built around a theme of treating people better. As she read the pages, Lambert was struck by the similarities she could draw to what was once dubbed “The Coolest Small Town in America.”

“Berry is talking about the decay of small towns and I had to put it down because I was just thinking about Grand Marais and how people want to live there. The people who live there want to live there,” she said. “But it’s so much harder and harder because there’s so many tourists. How many homes are up there that are second homes? Or are Air B&Bs? So it’s like, is tourism forcing out the people who actually want to be there year round?”

There was a time when Lambert dreamed of living in Grand Marais. Those sentiments, she said, are fading through time as she learns more about the challenges that small communities face as tourism overtakes the region.

“So when I go up there, I used to think, ‘Oh, my God, I would love to live in Grand Marais.’ Like if there was a job for me, I would live in Grand Marais,” she said. “But now that that makes me hesitant, the thought of who would be forced out so that I can like live a halftime lifestyle up in Grand Marais?”

An informal meeting about the condition of the Birchwood Apartments took place in Eklin’s apartment Friday, Jan. 13. During the meeting, tenants and community members could discuss the situation at Birchwood. A sheriff’s deputy was present, as were numerous community members and two representatives from ARC, including Lambert. Another person present at the meeting was Cook County Commissioner Dave Mills. The Birchwood Apartments, on the edge of Grand Marais along County Road 7, are in District 3, which is the part of the county Mills represents.

“I was really hopeful and really impressed,” Mills said. “I was really alarmed as well. I was grateful that I was invited to the meeting and could see firsthand some of the issues and how serious they are. And I think it was really powerful to have everyone in that room talking about it, and what they see as the issues and where, where we might be able to go, what paths, what options we have.”

Eklin and Lambert agreed that having tenants come together to voice their concerns about the condition of Birchwood was a significant step forward. For too long, they said, tenants have been afraid to voice their concern over fears of retaliation, including eviction. Eklin, for example, was sent an eviction letter Dec. 12 from NETA that appears to be a legally-binding document. It was not. The eviction notice was not only unofficial, it contained inaccurate information, Eklin explained. The notice claimed Eklin was behind on rent, though her bank statements proved she made the payments. Nonetheless, receiving an eviction notice just a few days before Christmas had serious consequences to her mental health.

“My life is turned upside down and these guys send out their letters and go home and do whatever,” she said, fighting back tears. “We’re here. We’re still here dealing with this stuff every day.”

With NETA abandoning its role as the property manager at the end of the month, there was concern among the residents at Birchwood that the situation might only get worse as the depths of winter arrive. However, Sedlacek said she has a new property management company coming on board in February. The company is based in Minnesota, she said, not wanting to publicly share any more details until the tenants hear from the company first. The residents at Birchwood could find that information out as soon as Jan. 23, she said. There is also the inspection coming from the USDA on Jan. 24 that could reshape the current situation at Birchwood.

Moving forward, Sedlacek said she would be willing to sell the property to someone who lives in the community. The local HRA is working on a number of options to renovate the property, Hale said. Among the options is a situation where the HRA partners with a developer and eventually takes over the property. At this point, there are options on the table that could improve the conditions at Birchwood, Hale said.

“I sympathize and share feelings of frustration, like how was it allowed you to get to this level? Who is to… not to blame, but how do we make things right?” Hale said. “But I think, practically, that doesn’t get us anywhere. I would choose to look at how do we fix it and improve the lives of the people living there and future tenants there. So I think the only way to realistically do that is to find parties who are interested and able to help rehab this thing and go through that process.”

Joe Friedrichs January 22, 2023