Carnegie Towers, one of the borough's largest residential complexes, is for sale.

The 10-story, 176-unit apartment complex built in 1971 on more than two acres on Capitol Drive, is in foreclosure after the current out-of-town owner defaulted on mortgage payments to the U. S. Department of Housing and Urban Development, which purchased the mortgage from Fannie Mae in November 2007.

Oral bids for the property will be accepted at 11 a.m. Feb. 26 in Room 410 at the Allegheny County Courthouse.

All but three of the apartments in the complex receive Section 8 federal assistance -- subsidized housing for low-income families and individuals. When the high-rise was first occupied, 55 units were subsidized, but that figure has remained at 173 since 1994.

Some Carnegie officials and real estate investors, who had been aware for months of the impending foreclosure, thought an ownership change would also mean a change in the number of Section 8 units because the current HUD contract expires in March 2010. However, according to bidding documents and information from HUD, that doesn't appear to be the case.

Cheryl Campbell, director of HUD's Pittsburgh Field Office, pointed to the use restrictions in the bidding documents that include entering into a 20-year agreement for Section 8 Housing Assistance Payment and two years of maximum rental rate protection for all residents.

In addition, the buyer must complete an estimated $5.4 million worth of repairs to the building within 24 months after closing. There's no minimum bid, but the winner must put down $150,000 and provide a $1.35 million letter of credit.

Ms. Campbell said the repairs are in keeping with HUD's tenet to provide "decent, safe and sanitary" housing to lower-income people. HUD's involvement at the high-rise makes Carnegie Towers attractive to investors, she said.

But borough officials, weary of ongoing complaints about activities at Carnegie Towers, would have preferred a reduction in the number of Section 8 units.

"I had the highest hopes that things would change," said Councilwoman Dorothy Kelly.

To potential buyer Pat Felix, who was interested in acquiring and renovating the building as a private apartment structure, "It just seems like a golden opportunity that's going to slip away."

"The way they've written the bid document is it's a downward spiral," added Council President Bob Kollar.

At council's workshop meeting Monday, officials agreed that the two- and three-bedroom apartment complex houses too many residents in a small area and that there is little room for young children to play.

Additionally, they worried about the potential for lost taxes from the structure because the current owner has appealed its $5 million assessment.

"It would devastate us financially," said Councilwoman Sue Demko.

But perhaps the biggest concern is the drain on police, who respond to frequent calls and make a large number of arrests at the building, particularly since 2000.

In testimony provided last summer before Allegheny County Council, Police Chief Jeffrey Harbin said that criminal activity at Carnegie Towers had escalated to the point that police in early 2007 cited the owner for maintaining a disorderly location.

That same year, Carnegie police responded to 1,454 calls for service or self-initiated preventive patrols at Carnegie Towers. The calls resulted in 110 instances, or 22 percent of all arrests borough police made that year, of criminal charges for activities such as robbery, rape, aggravated assault, firearms violations and drug offenses.

To combat increasing criminal incidents, the chief suggested that the owner and HUD provide security, that all residents undergo thorough criminal and background checks before moving in and that problem tenants be evicted promptly.

He noted that Carnegie's location and the lack of an internal security force make the building attractive to undesirables from other areas, too.

If a new owner comes on board, the chief said, "I would hope we have some say-so, particularly when it comes to security."