Trojan pony

SMU engages in a stealth campaign to buy out owners of condos in an area it covets

Sandwiched between Central Expressway and Southern Methodist University, University Gardens is a housing oasis -- an aging but genteel condominium complex offering all the amenities of the Park Cities without the steep prices. Its 350 units house mostly senior citizens and families, many of whom have lived here for decades on less than lavish incomes. And a large number of them hoped to live out their days here in relative peace.

But in the last few months, University Gardens has become a real estate war zone. A secret buyer began gobbling up units as soon as they came on the market, amassing such a large quantity that the buyer was on the way toward controlling the property's future.

The residents eventually unmasked the absentee owner who threatened their erstwhile housing haven. They have seen the enemy, and it is SMU.

Although the residents recently voted to limit single ownership to no more than 10 percent of the entire complex, SMU exceeds that limit and shows no sign of slowing down. As a result, the residents have taken to the streets in protest, picketing on Hillcrest on Saturdays during the last several weeks. Carrying placards alleging that SMU stands for being "sneaky," "manipulative," and "underhanded," the residents promise to keep picketing until the university backs down.

University Gardens is, by all accounts, a sweet piece of prime real estate, 11 acres hard by the newly completed Central Expressway and DART rail line. A perfect place for yet another shopping plaza and high-rise office building. It is also a perfect place for the neighboring, land-locked university to expand into. A few years ago, Lincoln Properties, the folks that just developed the Caruth property south of NorthPark on Central, made an offer to buy the condominium complex. In order for the complex to be sold outright, 75 percent of the owners must agree to the sale. It turns out that Lincoln wasn't offering enough money. But the owners decided to see whether there were any more takers. They hired the Weitzman Group to market the property, but they were asking for too much money. And at the time, only about half the owners expressed an interest in selling out.

Last April, a company called Peruna Properties Inc. began buying up the two-story attached townhouses off Dublin Street just north of Mockingbird Lane. The properties were changing hands, but the contracts were not being posted in the complex's management office as dictated by the condominium's declaration. Residents grew concerned and discovered that Peruna Properties was a nonprofit corporation owned by SMU. What's more, Weitzman, armed with a list of the owners who were interested in selling out, was now working as the purchasing agent for SMU. The residents were in an uproar.

"We didn't know SMU's intentions," says Kim Pierce, a single mother who bought into University Gardens in 1996 so her daughter could go to Park Cities schools. "We were afraid they would ruin our property values and the quality of life by turning the place into dorms."

Only about 35 percent of the owners actually live in the complex. And 20 percent of the residents happen to be SMU students. But the complex has conduct rules that say you cannot disturb your neighbor, and you'll be fined if you do. Still, the residents didn't want to see the place overrun with college students.

The president of the condominium board wrote a letter to SMU President Gerald Turner asking the university to level with the frightened residents about the school's true intentions. Leon Bennett, vice president of SMU legal affairs, invited the board to a meeting, where he came clean about what the school wanted, which scared the residents even more.

SMU wanted to purchase at least 26 percent of the units, Bennett said, the number required to block the sale of the entire complex to a developer. The university didn't want to see a high-rise go up on the property, although the present zoning would prevent such a development. SMU's intentions were clear: They wanted to be in a position to own the land themselves some day -- not necessarily to use as dorms, but for future campus expansion.

But Bennett insisted the school wanted to continue to be a good neighbor and promised it would give first preference in renting its units to people not affiliated with the school. If there were no takers, the school would next consider staff and faculty, then graduate students, followed only by juniors and seniors, provided their disciplinary record was clean. Bennett also promised to start posting the contracts. The school hadn't done so, he says, because other owners had stopped doing so, and they were simply following custom. As for the allegation that SMU had been buying the units clandestinely by hiding behind Peruna Corp., he explained to the board -- and the Dallas Observer -- that the company was a way to distinguish itself from the student housing operation.

But the meeting with Bennett only further agitated the residents, who were more dedicated than ever to stop SMU from controlling their fate. They wanted to limit SMU's ownership to 10 percent, which required a change in the declaration to be passed by 67 percent of the complex's voting members. But when the vote was held in late September, only 55 percent of the owners voted to limit single ownership -- not enough to amend the declaration, but enough to pass a bylaw. At the time, SMU owned about 12 percent of the units and the new bylaw did nothing to stop them. The school continued its buying spree, and by November they owned 45 units -- almost 14 percent of the total.

1
 
2
 
All
 
Next Page »
 
My Voice Nation Help
0 comments
 
Loading...