Zappala request puts Mon View Heights sale in jeopardy

He wants funds from the sale to be diverted to pay for a video surveillance system, sewer repairs & demolition of 4 buildings.

By PAULA REED WARD TribLive

The beleaguered Mon View Heights Apartment complex has a potential buyer, but the sale may be in jeopardy after District Attorney Stephen A. Zappala Jr. has asked the court to direct $1 million from the proceeds of the sale to install a video surveillance system there, demolish four buildings and repair the sewer system.

That request is at the center of pending criminal and civil court motions involving the West Mifflin low-income housing complex, which has long drawn complaints over its deteriorating conditions, safety concerns and criminal activity.

A hearing on the potential sale, which includes four properties for a total price of $11 million, is scheduled for Thursday before Common Pleas Judge Chelsa Wagner in the court’s civil division.

However, attorneys for the bank that owns them said that Zappala’s request to divert money from the sale is endangering the deal.

“The only thing this will do is jeopardize the sale of this property and getting it back up to code where it needs to be,” said attorney Steve Townsend, who represents the bank. “The buyer will walk away, and the bank will walk away.”

The DA’s office did not immediately respond to a request for comment on Monday afternoon.

In September 2024, the DA’s office filed criminal charges against Mon View’s owners for creating a public nuisance — including allowing raw sewage to run in the streets.

The owners, Mon View Apts. LLC, bought the property in December 2022 for $17 million.

However, the DA’s office said they allowed the property to devolve into “despicable” and “dangerous” conditions.

During inspections in the summer of 2024, the DA said, 96 of 129 units failed. Among the allegations: missing windows, no hot water, leaking pipes, collapsed ceilings, insects and open sewage.

In November 2024, Merchants Bank of Indiana, the lender to Mon View Apts. LLC, filed a mortgage foreclosure action in Allegheny County Common Pleas Court.

The next month, the court placed the property in receivership, appointing an expert to manage the property.

In July 2025, the court entered a default judgment against Mon View Apts. LLC for $17 million.

Since then, according to a motion filed in May, the receiver has found a buyer for Mon View, as well as other properties owned by the same company: Gallatin Apartments in Uniontown, Palisades Manor in Rankin and Valley Royal Court in New Kensington.

The total purchase price is $11 million, including $7.5 million for Mon View.

The buyers, the motion said, intend to keep the property as low-income housing, and the only steps necessary to close the sale include receiving approval by the court, and approval by federal Housing and Urban Development.

But in April, Zappala was still complaining about the condition of the property, including threatening to file criminal charges against the bank. Because Merchants had the property in foreclosure proceedings, Zappala said, the bank was responsible for maintaining the property.

“You’re going to become defendants in a criminal action — unless you start making sense in how we collect this money and how we use this money — because, obviously, none of it has gone to (address) public safety,” Zappala said at the time.

Townsend said the DA’s office sent a grand jury subpoena to Merchants Bank requesting financial information on the property and its management. He replied by sending the requested documentation, and Townsend said he’s heard nothing on the matter since.

Then, on June 8, the DA’s office filed a petition for a temporary restraining order asking Common Pleas Judge Jill E. Rangos, who oversees the criminal matter, to divert proceeds from the sale to “remedy the public nuisance.”

The petition described the dilapidated condition of Mon View Apartments and noted that between March and September 2024 — prior to the criminal charges being filed — West Mifflin borough police responded to 502 service calls there, including 31 for domestic disputes and 12 for shots fired, and made 62 arrests.

The motion calls for “any proceeds” of a sale to be diverted to the sheriff to add security cameras, demolish four buildings and repair sewer lines.

According to quotes attached to the request, the security cameras will cost $570,000, demolition of four buildings will cost $267,500 and sewer repair is at least $300,000.

Attorneys representing the bank and mortgage holder for the property said in a court filing on Thursday that the DA’s office acted improperly in filing its restraining order request in criminal court, knowing there is a pending civil matter through the receivership.

In addition, the request for the temporary restraining order listed outdated inspections and violations prior to the appointment of the receiver, the bank’s attorneys said. Further, if granted, the order would put a lien against the property that’s not permitted.

“Zappala’s not asking for remediation costs,” Townsend said. “He’s asking for the entire amount to use as he sees fit — a blank check.”

The motion by the bank also suggested that the DA’s request is counterproductive to keeping Mon View Heights as affordable housing.

Since the property went into receivership, the motion said that Merchants Bank has advanced more than $2.5 million into Mon View to keep it operational, including paying insurance, taxes and making critical repairs.

“Critically, if the district attorney’s conduct is permitted to go unchecked, Merchants Bank of Indiana will have no incentive to continue funding and supporting the receivership property,” the bank’s attorneys wrote. “The result would be a complete loss of funding for the property, jeopardizing the safety of current residents, the preservation of the (HUD contract), and any prospect of a successful sale to a qualified purchaser who can maintain affordable housing at Mon View Heights.”

On Monday, Townsend filed a separate motion seeking to dismiss the criminal matters, writing that the DA’s office failed to prosecute the case until they learned the property was being sold.

The criminal charges were filed on Oct. 1, 2024, and remain pending.

No action was taken in the case until the restraining order was filed last month.

“(T)he commonwealth waited until a sale was imminent and then tried to use the criminal dockets as a vehicle to restrain sale proceeds and impose abatement funding obligations,” Townsend wrote.

He accused the prosecution of a lack of due diligence.

“They sat on their hands,” Townsend said. “They had two years to prosecute this case and did nothing with it.”