In the last few weeks everyone has been talking about taking on a tax increase so we can give City Hall more money. I promise you this much: This story will make you wonder why on earth we would even consider giving the people at City Hall more money.
Josh Terry, a young guy who works for a major financial institution, decided last year that rehabbing a property in an old neighborhood might make an interesting personal project and hopefully a decent investment.
Terry did everything right in terms of checking with the city. He asked the city if the city zoning requirements on his property would allow him to do the project he had in mind—remodeling an 87-year-old five-unit apartment building in the King's Highway Conservation District in North Oak Cliff.
The city didn't just say yes. They provided him with the specific ordinance for that district with a map showing his specific property with the specific kind of zoning he needed. Then a city official told him, yes, your property is "grandfathered" under the law as multifamily (apartment) property. Then the city granted him building permits for his work.
Tons of work got done quickly after that. He showed me his books. In his spreadsheet you can see the money flooding into the place—$12,495 for heating and cooling units, $14,285 for new wiring, $2,350 for plumbing, $550 to scrape and paint ceilings, $1,540 for new windows—on and on until he's got $100,000 in it.
Then the staff gets a call from somebody in the city council office (ominous drum roll here).
The property happens to be in Council District 3, the realm of one David Neumann. Councilman Neumann wouldn't respond to my calls or e-mails about this, as he never does, so I can't say with certainty he's the one who called. I do know he is following this case closely.
But it almost doesn't make any difference who called. Somebody associated with the city council calls city staff—someone with a problem or objection to the project. The city staff immediately and completely reverses field and tells Terry he can't do the project. Stop now. It's all illegal.
What? They can't do that, right? They already said it was legal. They're the ones who said it was legal. They gave him the go-ahead. He spent the money. They can't decide later to pull the rug out from under him.
Flat out impossible, right? Schutze just makes this crap up. It comes to him in dreams. Somebody grab a net. Nobody would do that, especially City Hall.
Sorry, kemosabe. It's exactly what they did. I called Betty Antebi-Taylor, the city's Building Official, as she is called, the top staff person on these issues. She e-mailed me back, conceding that City Hall had given Terry building permits and other permissions. But, sadly, she said, they shouldn't have.
"Mr. Terry's CO (certificate of occupancy) request was processed in error," she said in her e-mail, "as a multifamily use is not permitted in that zoning district."
I also heard from David Cossum, who is assistant director of the planning department. Cossum told me in an e-mail: "It does appear that certain assumptions were made by all involved as to the presumed zoning status of the property based on the applications submitted."
Well, I don't know if that really captures it, Mr. Cossum. It's not really a matter of "certain assumptions," is it? Your people gave the guy active permission.
Over a course of months, Terry through his own research, attempted to resolve city staff's issues, and thought he had done so, until the staff changed its arguments against him. First they told him his property had lost its multifamily zoning because, while vacant, it had lost its "intended use," triggering an obscure provision of the zoning law. In order to prove them wrong, Terry would have to produce affidavits from neighbors and former owners.
He did so. He brought them all the necessary affidavits. The staff immediately changed its mind. They said the affidavits were no longer good enough.
Terry filed an appeal to the Board of Adjustment. He learned that the board, made up of citizens and people with real estate experience, usually grants a restoration of the multifamily zoning in a case like this, especially where the investor has spent money based on permission from the city.
But staff—and whoever is churning this from the council office—saw that one coming. Last week the staff e-mailed him and said they had changed their minds again. Now they said his multifamily zoning had not lapsed. They said the property had never been zoned multifamily. Ever.
They told him he could no longer appeal the lapsed zoning designation because he had never had the designation in the first place. The only way he could prove them wrong would be to bring them documentation showing them that the city had recognized the property as multifamily in the past.