By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
Not much is left of Little Mexico, the once-vibrant Hispanic community surrounding Reverchon Park that blossomed in the 1920s. Uptown redevelopment has replaced the blocks of small single-family homes and businesses with Victory Park and condominiums.
Fragments of the old neighborhood can still be seen in four homes on McKinnon Street near the entrance of the Dallas North Tollway. Harwood International, a leader for more than two decades in redeveloping Uptown, now wants to acquire those properties to build a 35-story high-rise with condos and a grocery store, which is just fine with the families that own the homes. They're ready to sell, but the way Harwood has gone about trying to buy out the holdouts, however, has angered some of the remaining families, who claim the real estate giant is using divide-and-conquer techniques and bullying tactics.
"For the most part, Harwood is making Dallas a better place," says Paul Santillan, spokesman for the family that owns the home at 2921 McKinnon St. "I just don't agree with some of the tactics and personalities that they utilize."
Harwood claims that there are title problems and liens on some of the properties. The real estate broker for all four properties, Grayson Von Buren, says his clients have "jumped through hoops of fire" to clear the titles, and there are no liens.
In Santillan's case, the problem started when he signed a contract for sale in September 2005, before he was represented by Von Buren. The contract was with attorney Gary Scott, who says he's been working with Harwood for 15 years, and Dustin Schilling of Collier International, who planned to flip the property to Harwood for a profit. After Scott and Schilling postponed the closing three times and then requested a fourth extension, Santillan hired an attorney to get out of the contract. Soon afterward, he found out that Scott used a list of family members to acquire 6 percent ownership in the property, handicapping the family's ability to sell the remaining 94 percent.
Santillan says Scott showed his two cousins, Marissa and Monique Rodriguez, the contract and warned them that they would not be getting their share. Scott gave each of them $15,500 and $5,000 to their mother, Stefana. "They pretty much tricked the girls into selling," Santillan says. Marissa and Monique Rodriguez and Stefana Rios could not be reached for comment.
Santillan says he was unaware of Scott's negotiations with other family members and was surprised since he told Scott that he was the representative for the family. Scott sold the 6 percent interest to Harwood, and now Harwood and the remaining owners would have to agree on a price before the property could be sold.
Scott denies any wrongdoing by purchasing the 6 percent. Scott says he did additional research based on preliminary information provided by Santillan to track down the two cousins, and they simply were willing to sell.
"They wanted to sell, so I closed," Scott says. "It was really simple."
Julie Morris, chief information officer and executive vice president for Harwood International, offers a different account.
"That person actually came to us—I remember the day he came to me in my office—and he asked to sell to us. He asked to sell," Morris says. "That was not a Gary Scott thing at all. He called me and said, 'I want to sell my piece of this property.'"
When Morris is told the sellers were women, she replies, "Well, it must have been somebody's husband or lawyer that came to see me. I met him in the conference room; I remember it."
Joe De La Garza, Art Moreno and Tony Salinas represent the three adjacent properties just down the street from the Santillan home, which is vacant. Moreno's daughter Monica lives at his property, which his parents bought in the 1940s. Salinas' uncle Jesse has lived at 3023 McKinnon St. for more than 60 years. De La Garza's brother Fred is planning to move into the family's house at 3015 McKinnon St. soon.
Joe De La Garza says his late sister Marie Ybarra was contacted by Morris in an attempt to fragment his family. Once the other neighbors heard about what happened to the Santillan property, they banded together and hired Von Buren to sell all the properties as one so that "the last one wouldn't be left with the crumbs off the table," he says.
Art Moreno says the problems with Harwood started when Scott became involved in early 2006. Several intimidating and condescending phone calls were left by Scott, Moreno says. "From the get-go, I really didn't like his attitude."
Tony Salinas says he was disgusted by what happened with the Santillan property and similar attempts to buy stakes in his land were made by Julie Morris to a cousin and uncle. "It's a very good way of doing things if you want to do things underhandedly," Salinas says.
Morris says she asked Scott to buy these properties only after her attempts were unsuccessful.
Scott's last contract, from July 2007, was for the three adjacent properties. This was seven months after he sent an e-mail to Von Buren that read, "There will be no more offers. I wish them the best of luck." He was asking for Social Security numbers and names of all the family members before making an offer. This outraged many of the families, who believed Scott was going to use the information to do what was done with the Santillan property.
Asked why this information was needed, Morris says, "We never asked for that. I'm the one that has been directing all of this for a couple of years now." The Dallas Observer obtained copies of the contract, however, which asked for names and Social Security numbers for all family members.
Morris and Scott place the blame on Von Buren. Morris says Von Buren's prices for each property—more than $700,000 each—are more appropriate for downtown Manhattan. "Bless his heart, he's trying to earn his retirement on these poor people," she says.
"I even offered him—because I really wanted these properties and I really tried hard—the amount of the commission that he would have earned at the higher price," Morris says.
Peggy Santmyer, an accredited instructor in Texas for real estate legal and ethics issues, says she's not sure if offers like this are typical, but this is the first time she's heard of such a thing. "That would certainly be a breach of that broker's fiduciary duties to their client," she says.
Von Buren says he has been as cooperative as he can with Harwood, but as for the offer to pay him a higher commission to sell out his clients, he says, "A lot of Realtors might have jumped at the offer, but I wouldn't be able to sleep at night."
Harwood's latest tactic was to seek rezoning for land abutting three of the remaining four properties. Harwood sought to reduce the side and rear setbacks to 10 feet, which would allow the company to build its high-rise tight against the houses. The developer also sought permission to erect two 500-square-foot video screens, which could have been placed facing the backyards of the houses. The city's Department of Development Services was not in favor of any video screens, according to Jennifer Hiromoto, a senior planner in the department. The staff also recommended the setbacks be 20 feet.
Art Moreno claims the homeowners were railroaded at the January 10 City Plan Commission meeting and the outcome was already determined. In fact, the setbacks were changed to favor Harwood even more than it was asking, allowing the developer to build right up to the property line next to the De La Garza home. The commissioners agreed to allow the two video boards.
Commissioner Neil Emmons says he attempted to meet with the families before the hearing. Only two of the family spokesmen, De La Garza and Moreno, say they were contacted by him. Emmons says the greater good of the 5,000 new residents and grocery store that Harwood is bringing in must be weighed against the property owners. Emmons says the zoning will affect the remaining houses, but the families' opposition to the zoning is only a way to increase the sales price on their properties.
"They're not defending their community; they're defending their bankbook," Emmons says. "It doesn't carry the same moral weight as someone who was born there, lived there, wants to die there and wants to raise generations on the land."
The City Council will decide on the zoning February 13.