Atlantic County Court Tosses Landlord’s Latest Effort to Force Tenants to Move

A New Jersey judge this week threw out an eviction complaint filed against an Atlantic City woman who told journalists that her landlord had failed to address unsafe conditions in the home. The property owner, Michael Scanlon Sr., began eviction proceedings against the woman shortly after a reporter for The Press of Atlantic City and ProPublica visited the property in August.

The news organizations were looking at Scanlon’s properties as part of an investigation into a New Jersey agency that paid him more than $1.1 million for three Atlantic City rooming houses, forcing out the residents who lived in them.

Tenants said they had just six weeks’ notice to vacate the rooming houses, including 108 Albion Place. With few affordable options, two residents at that address took the landlord up on an offer to relocate to another of his rental properties, a Westside rowhome, in June 2021.

But the women, Nada Gilbert and Nikki Knight, said conditions in their new home were bad: A persistent leak caused Knight’s bedroom ceiling to bulge overhead and damaged her mattress, and a sagging porch roof was being held up by makeshift pillars. The women, in response, began withholding rent earlier this year, leading the landlord to try to remove them.

Atlantic City Superior Court Judge James P. McGee on Wednesday dismissed the case against Gilbert, citing the landlord’s failure to appear at the hearing that morning.

The women had ended up living there after being forced to move from Albion Place as part of the Vacant Rooming House Conversion Project, which the Casino Reinvestment Development Authority launched in winter 2020. Officials said the initiative would “protect Atlantic City residents by providing improved housing conditions and revitalize numerous properties.” Its leaders variously said the project, which involved CRDA acquiring empty rooming houses, would reduce blight, improve the city’s housing stock and expand affordable housing.

But the news organizations’ investigation found CRDA has fallen well short of those goals while displacing dozens of low-income residents in the process, including Gilbert and Knight.

Scanlon Sr. did not respond to requests for comment about his legal conflict with the two women, but his son Michael Scanlon Jr. said a “miscommunication” preceded the eviction filing. “It was more my fault,” Scanlon Jr. said. He had previously told the news organizations that the tenants had had more than six weeks’ notice to move but did not provide documentation to support that.

He blames the leak on the neighboring vacant home but said he and his father have come to an agreement with the tenants. The women’s outstanding rent balance will be forgiven, and the remaining repairs and additional cosmetic updates will be made, according to Scanlon Jr., who also said he expects to take full ownership of the rental property in the next few weeks. Gilbert confirmed the details but said she has not yet signed any documents outlining the terms.

Meanwhile, the three properties that Scanlon Sr. sold to CRDA are boarded up with no signs of construction. After owning the three properties, which were all within about a block of the beach, for roughly a year, CRDA last month sold them for $150,000 to a hotel developer, who now has until September 2023 to start building.

Asked whether CRDA discussed relocation efforts with landlords in the program, agency leaders said no. “That was solely on the owners to deal with that,” said Lance Landgraf, CRDA director of planning and development, in an interview last month. “Our direction to them was: ‘We will not buy this with anybody in it.’ That’s as far as I went with it.”

CRDA was set up almost 40 years ago to use casino tax revenue to address “the pressing social and economic needs” of Atlantic City residents. But Landgraf said the agency has limited funds to service a variety of goals, which, under the law, also include redevelopment. And he stood by the rooming house project as a critical component of economic development. “We needed to get those properties cleaned up and changed into a better, more viable use in the community that would promote development, not restrict it,” Landgraf said.

However, critics say the state agency had other options besides closing the rooming house down and question how CRDA is using its power. In response to the investigation’s findings, one of the authors of the original legislation establishing CRDA, David Sciarra, said the rooming house outcomes “should be a wake-up call to legislators in Trenton.”

“They need to do some serious oversight to make sure that CRDA is operating in the best interests of all residents of Atlantic City and not just an investment arm of the casino industry,” he said.