A Bahama Village housing organization had run out of options Wednesday night, when its members voted to deed its properties over to the local housing authority.

The Bahama Conch Community Land Trust is out of money, and carries between $900,000 and $1.7 million in debt. The 41 rental units owned by the land trust are in disrepair and in danger of being condemned by the city.

"If we let it go, the city will have to close more and more units," said Manuel Castillo, executive director of the Key West Housing Authority. "You're in danger of being put out into the street if you do nothing."

Following the vote by tenants, Castillo will ask the housing authority board to assume ownership of the properties and immediately begin an assessment of each building to increase its safety and standard of living.

The decision was a difficult one, and some tenants wanted to explore other options, such as declaring bankruptcy and starting over. Others wanted to postpone the decision by a week.

Bob Kelly, a BCCLT board member who has taken on the role of executive director since the departure of former director Norma Jean Sawyer, told the group of about 25 people that the organization's reputation is too damaged to qualify for grant funding.

A November audit of the BCCLT revealed grave financial mistakes, some of which are being investigated by the State Attorney's Office.

One tenant asked if there was a chance of recouping any of the money that Sawyer is accused of mismanaging.

"Whatever Norma Jean did was done as a desperate measure; there's no probability that we will get that money back," Kelly said, asking the group to focus on the present rather than the past.

"The audit will make it next to impossible to get grant money," Castillo agreed with Kelly.

"We've gone through any scenarios that you all could come up with," board member Glenwood Lopez said. "We have stayed with this organization when we could have walked away, and we've tried, but there is no other option."

Kelly emphasized that the housing authority manages more than 1,000 rental units in Key West and has the staff to properly maintain those units.

"We wanted to provide you with safe and comfortable homes, and we did not do that," Kelly said. "For that reason, in my heart, I believe this is the right move for you all."

"There is a willingness at the city to help you all stay in your homes, or get you into better homes," Castillo said.

He added that the income restrictions placed on BCCLT-owned properties will remain in place after the transfer. All deed restrictions that prohibit properties from being sold at market rate also will remain, although, Castillo said, the housing authority has no plans to sell the properties, except possibly to qualified tenants.

"We would like to sell as many of the BCCLT properties as we can to the tenants of them, using the land trust model," he said.

As a result of the ownership change, current land trust tenants will see little immediate differences, Kelly said.

But in the long run, their homes will be repaired, or they will be moved into places that meet city health and safety codes.

Castillo now will take the proposal to the housing authority board next month. If that board agrees to take on the new properties, Castillo will begin a needs assessment on each property in the next 30 to 45 days.

mbolen@keysnews.com