An Over-the-Rhine developer has walked away from more than a dozen buildings and left 50 tenants to fend for themselves after failing to persuade the city of Cincinnati to arrange funding for a low-income housing project.

        Tenants fear eviction because they don't know where to pay rent; and they've received notices that water, power and gas service will be shut off Dec. 7.

        “It's just ridiculous,” said Claudia Fatimah-Miller, who organized a group of tenants to manage the 17 buildings until the situation is resolved. “We can't just sit here and let everything fall apart.”

        The problem stems from an ownership and legal dispute between two businesses that own, manage and develop low-income properties and the city, which says one of the firms misspent nearly $1 million.

        Debenhan LLC said it assumed management and ownership of 67 low-income housing units in July from Owning-the-Realty Inc., a company that the city has sued to recoup $972,000 in funds it says were misspent.

        Debenhan planned to invest $11 million to fix up the apartments, but it needed city approval of a tax-credit financing plan to make the project work.

        When the city showed no interest in recommending tax-credit financing, Debenhan managing member Pauline Van der Haer warned that it would result in displacement of tenants.

        “We put together a thorough and very beneficial plan, and now it's essentially dead,” said Ms. Van der Haer. “We are talking about 67 homes. What about the tenants and the welfare and well-being of the people who live there?”

        Convinced that the city doesn't want to assist her project because of past allegations that Owning-the-Realty misspent taxpayer money, Ms. Van der Haer said her company transferred ownership of the property back to Owning-the-Realty two weeks ago and is no longer involved in the project.

        The city has known the tenants could be displaced at least since Nov. 9, when Ms. Van der Haer wrote a letter to City Manager John Shirey informing him of her plans. She said Mr. Shirey never responded.

        Neither Mr. Shirey nor Deputy City Manager Richard Mendes could be reached Friday. Speaking on behalf of the city administration, spokeswoman Gina Ruffin-Moore said the city has “done a lot” to solve the problem since Nov. 9, though she couldn't name any specifics.

        City officials scrambled Friday to develop a plan to ensure rent- paying tenants won't be displaced and called Cinergy to make sure the apartment units continue to receive gas and electricity.

        Francis Wagner, who heads the Department of Neighborhood Services, said the city shouldn't be expected to fund future projects just because it's done so in the past.

        “I don't have a magic wand,” Mr. Wagner said. “I suspect people are looking at the city to do something because we've funded (Owning the Realty).”

        The city filed a lawsuit in August to recoup the $972,000 from Owning the Realty and its executive director, Marvin Smith. The allegations of misspent federal grant money came from a probe by the Cincinnati Office of Municipal Investigation.

        Mr. Smith has denied any wrongdoing. Calls to Mr. Smith's attorney were not returned Friday.

        Owning the Realty owes $146,000 in back property taxes to Hamilton County for the 67 units.

        The Legal Aid Society will establish an escrow account for tenants to pay rent that's due Tuesday, said staff attorney Gary Pieples.

        Mr. Pieples said the city has ordered at least one building vacated because it wasn't safe to be occupied. The city plans to inspect other buildings to ensure they can be inhabited.

        “A big concern of course is that it's winter,” Mr. Pieples said. “They need heat and light.”

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