Real trouble began about five years ago. A young girl and her mother were killed by an explosion at Marbury Plaza in Southeast Washington, DC, and several people were injured. Investigators believed that thieves had tampered with natural gas lines leading to laundry equipment inside one of the two highrises in the otherwise garden-style residential complex. In response, the management company, The Lightstone Group, put all laundry off limits to residents, who reacted by forming a tenants' association to respond to the crisis, prevent future recurrences and improve quality of life at the apartment building. Then in October of 2008, they staged a rent strike, placing their rent money in an escrow account in the city's charge. Now, five years later, a new management company is taking over, and a $5 million capital budget will be available to restore the complex to normalcy with rent checks once again rolling in.
Despite the agreement announced yesterday, April Goggans, President of the MPCTA (Marbury Plaza Concerned Citizens - Tenants Association) is only vaguely optimistic. In her four year struggle to bring tenants to the forefront of concern, she has been disappointed repeatedly. Now that Urban Investment Partners (UIP) has reached an agreement with the MPCTA to manage the 672 rental units and their 1500 disgruntled residents, Ms. Goggans remains skeptical and more than slightly on the defense. "Just give it 6 months. When UIP attempts to purchase the building again, the Association will be 110% ready to exercise their TOPA [Tenant Opportunity of Purchase Act] rights," she wrote in a November 2009 letter published on the MPCTA's blog. In her letter she cites previous attempts by UIP to buy the property, which affords views of downtown Washington and spacious floor plans. At the same time, according to East River Magazine, Ms. Goggans noticed that the property really began to deteriorate when the owner, A&A Marbury, LLC , stopped trying to sell it in 2007.
In her testimony against A&A Marbury and the Lightstone Group, Cassandra Payne, a Marbury Plaza tenant as of 2004 stated that when she first moved into her apartment "(1) The hot water was sporadic and would often be turned off without any notice to the tenants. (2) Her apartment had holes in the walls. (3) The 'plumbing was bad.' (4) There were roaches and 'rodents' in the hallways. (5) When she moved into the apartment there was no carpet on the floor and a stink that provoked an allergy attack. (6) The building had holes in the hallway walls." After a 17% rent increase, she sued the company under a claim of a violation of the The Rental Housing Act of 1985 but failed to bring documentation of the reported issues to the hearing. The Act places nearly all rental units built before 1975 in the District of Columbia under rent control regulations, which do not allow spikes of more than 10% in annual rent in most cases.
The Office of Administrative Hearings (OHA) ruled in favor of the housing provider because the rental ceiling adjustment corresponded to the CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers), and Payne failed to provide sufficient evidence to support her claims. Tenants were not the only ones suing; the owner also unsuccessfully sued tenants when they refused to pay rent.
"I've sacrificed tremendously. It can be a 24-hour a day job advocating for justice. Tenants will start seeing some relief, and the Attorney General will oversee the whole process. We have worked so hard to get here, and the outlook is finally promising." Goggans talked to reporters, community agencies, and even bought law books to navigate the complexities of housing advocacy. "It's been a learning experience," she reflected. Voicing concerns about elderly, disabled or single parent members of the Marbury community, she said she is glad she has had the energy to pursue solutions to the problems that have been plaguing the residential complex over the past four years.
But with the support of Peter Nickles, DC Attorney General, Ward 7 Councilmember Yvette Alexander, as well as Councilmembers Muriel Bowser and Kwame Brown, Chief Tenant Advocate Johanna Shreve and Bread for the City Legal Clinic Director, Vytas Vergeer, the tenants are finally being vindicated.
The Lightstone Group lost ownership over Marbury Plaza when it defaulted on a $41.1 million loan from New York Community Bank in 2004. Since then it has not been making mortgage payments on the property and has been generating operating losses. A refinancing of the property took place in 2005, generating $14.1 million in revenue. A sizable chunk - $10.2 million - went to investors. Overall the company has been operating at a loss averaging approximately $2 million per year on Marbury with additional losses in the millions on its other residential and commercial properties and coming close to foreclosure.
"We are committed to working with them" stated April Goggans about UIP's new management in a recent interview. "They came into a hard situation, but ultimately, the owner holds the purse straps." Negotiations between the MPCTA and A&A Marbury have yielded an agreement, announced on Tuesday, of $5 million in capital improvements to the property, which consists of two apartment towers and seven garden-style buildings. In an August 17th press release, Wout Coster of UIP said "We could not accept the assignment until we were assured that the owner was prepared to provide the funds necessary to improve the property." For now, at least, life will get a little better for everyone involved.
Washington DC real estate news