In April, two parents went to Yorkwood Elementary School principal Tonya Combs-Redd bearing some bad news.

Rent hikes were expected at Dutch Village, an apartment complex where many students lived. Several families, they said, couldn’t afford to stay in the Northeast Baltimore neighborhood and would have to leave the school.

Combs-Redd sprang into action. She directed a school official to survey families and in May paid a visit to Dutch Village. A property manager told her about plans to close the complex for renovations, then double the rents.

With just 329 kids on its rolls last year, the small school could take a major hit from a sudden drop in students. City schools are often closed after enrollment dips below a couple hundred. And then there are the shorter-term consequences to consider: In an email to Baltimore City Public Schools officials in May, Combs-Redd outlined worries about attendance rates and funding.

The Baltimore Banner obtained correspondence about Yorkwood Elementary’s predicament through a public records request. It’s not yet clear how many students Yorkwood has lost this school year; Baltimore City Public Schools declined to provide enrollment figures before Sept. 30.

The number could dip even lower in the coming months. On Saturday, the owner of Dutch Village filed at least 73 failure-to-pay rent cases against tenants, a first step toward evicting them. A source with knowledge of the situation estimated this spring that about 120 Yorkwood students lived in Dutch Village, which sits off Perring Parkway about three miles north of Morgan State University.

Behind the scenes is a New York developer whose plans could change the trajectory of the entire school community, court records and correspondence show. He now faces legal trouble that partly explains the upheaval for residents.

Mendel Steiner acquired Dutch Village and a nearby apartment complex called Pleasantview in 2022. The complexes together include 803 apartment units, most of them featuring two or three bedrooms.

It’s a common playbook for investors: snap up older buildings, rehabilitate them and lease them to higher-income households for more profit. Renters have little choice but to pay the new costs or move out.

For residents at Dutch Village, it’s one of the latest complications.

Dutch Village and Pleasantview were previously owned by Jared Kushner’s apartment company, which paid millions to settle a lawsuit over tenant mistreatment. Now the apartments’ new owner is in a legal dispute over a loan on the properties.

Steiner bought the two complexes for $115 million but told the Bank of Montreal in Canada he paid $173 million, the bank claims in legal filings. The bank agreed to provide a $160 million refinancing loan in January under those false premises, the bank alleges.

Neither Steiner nor his attorneys responded to requests for comment. Attorneys for the bank declined to comment.

Steiner’s company “failed to provide even the most basic operating documents” required under the terms of the loan, the bank alleges. The bank says it had asked for leases, monthly operating account statements and invoices to support the owner’s assertion that he spent more than $30 million renovating the property.

When Steiner allegedly refused and ignored requests to turn over the records, representatives for the bank said they showed up at the apartment complex in March to meet with the property manager, Aven Realty Management, and talk to tenants.

The property manager didn’t turn over records, either, according to the bank, and “made a number of excuses” to inspectors on site. The bank alleges in court records that tenants told inspectors what they were paying in rent, which was 25% to 50% less than the owners had reported. In one instance, the bank alleges, the property manager’s books conveyed that a tenant who moved out in 2022 was still paying rent.

During a second visit to the apartments in March, the bank claims, its inspector found no signs of the $30 million in renovations.

The bank called the documentation it did get from Steiner “misleading at best and fraudulent at worst.”

The Bank of Montreal filed a petition in Baltimore City Circuit Court in late March to place the complex into receivership, a legal maneuver that puts the property in the custody of a court-appointed steward. It filed a second emergency petition — which cut into Steiner’s timeframe to respond — in April after his company allegedly failed to make payments and take other steps required under the loan.

In court filings, attorneys for Steiner denied the allegations and called the petition “lender’s remorse” based on Steiner’s “slowness” to provide the bank with updated information “a mere six weeks after closing.” They countered that the bank’s post-closing investigation was largely based on “inadmissible hearsay.”

“It is unfathomable how a sophisticated lender could close on a $160 million loan ... without adequate pre-closing due diligence,” Steiner’s attorneys wrote.

Around the time Steiner’s creditor took him to court, Paula Chaney, who had lived in Dutch Village for three years, said she received notice that her rent was going up by $200 a month in the middle of her lease. The property owner and manager offered her $3,500 if she moved out by May 1, she said. She took the deal.

Chaney was fighting cancer at the time, and the idea of staying seemed harder than moving. She found another apartment near Towson, which she considered nicer quality and closer to her job as a swimming instructor at Merritt Clubs.

She said her neighbors were all struggling with the same proposition, although the management seemed to be giving them different sweeteners to move out before the end of their leases. Chaney said many of her neighbors took the money and left quickly, knowing the extra cash might make it easier to find another place to live.

Several current and former residents told The Banner that they had been offered cash to break their leases early, but declined to speak publicly because they feared retaliation or were concerned about their privacy.

Ari Auster, who identified himself in a phone call as the property manager, denied offering money to tenants to break their leases early and said rents would be determined by market value. He said he’s increasing staffing levels to deliver more effective services.

“Everything is working perfect. We are doing everything the right way,” he said, adding that he was unaware of the receivership case or its allegations.

“We’re trying to help the tenants,” he said, “and give them whatever they need to fix everything.”

In late May, Steiner and the Bank of Montreal agreed to pause the litigation to try to come to terms. A joint status report is due to the court by Sept. 17.

Representatives for the apartment complexes did not respond to inquiries about the spate of failure-to-pay cases.

In the meantime, it’s not known how many tenants have cleared out. Auster, the property manager, said the complex was “mostly occupied.”

On a Tuesday morning in June, two mattresses leaned against a fence by a pair of dumpsters at the Dutch Village complex. Some doors had mail and old flyers wedged in the space next to the wall. Weathered, unopened packages were left on some front steps.

John D’Costa, a property manager on site, declined to answer questions and pointed to a security camera in his office that was recording his visitors’ every move.

One resident, who asked to be identified by the name Harris for fear of retaliation from the property manager, said she received an offer to switch to a new apartment unit after she complained about a series of maintenance problems in her home. But the new unit cost about $200 more than she was already paying, Harris said, and she felt frustrated that management wanted to charge her more while she said she faced serious, unresolved hazards, including water damage and rodents.

Harris, a science teacher, said she had stopped paying rent due to the problems in her unit. But she cares for her younger brother, she said, and resumed paying once she received a failure-to-pay notice.

About two weeks into the school year, it’s unclear whether the impact on Yorkwood Elementary will be as profound as some feared. It is rare for a school to see dramatic drops or increases in enrollment in one year.

Small schools have fewer resources to spread around. They have less money to spend on teachers, for example, and support staff for classrooms. It means fewer opportunities for enrichment, like art and music.

City schools officials declined to comment on any of the complications surrounding the school’s future and would not make the principal available to answer questions about what measures the school is taking to support students who are moving or who may face eviction.

Baltimore Banner reporter Dylan Segelbaum contributed to this article.