This is the saga of a landlord company called HMK Ltd. They say they can’t upgrade their houses to new tougher standards. They want to take 300 houses off the rental market, half of which are already empty.
The mayor and his ally, West Dallas City Council member Monica Alonzo, both of whom backed the new tougher rental standards, don’t want to get blamed for the evictions. But neither does HMK. The city and HMK are tied up in court, where a judge has ordered both of them to back off and leave the tenants alone until June 3.
Last October Judge Kenneth Molberg of the 95th District Court of Dallas County ordered the city to stop enforcing the new standards on HMK and also ordered HMK not to evict anybody who pays the rent. That order expires June 3.
Charles McGarry, lawyer for Khraish Khraish, who is one of two partners who control HMK, asked Molberg at a hearing April 6 to extend the order for as long as a year and a half while HMK develops replacement housing that can meet the new standards.
Melissa Miles, a lawyer for the city, opposed the extension. Molberg hasn’t made up his mind yet. The city lawyer had her reasons. But before we dive into all that, let’s pause here and make sure we take notice of one overarching reality:
The landlord, Khraish Khraish and HMK Ltd., asked that the judge keep the 150-or-so families threatened by the June 3 eviction date in their houses for a year and a half. It was the city that said no. The city doesn’t want the order protecting the families extended. If the judge sides with the city, the families get the boot.
One more time, just to make sure we get it: The landlord wants the families to stay where they are. The city is the one pressing the judge for an outcome that means the remaining tenants on June 3 will all get evicted.
Assistant City Attorney Miles told me in an email: “The city’s goal is for every HMK tenant to be matched with whatever assistance they need in order to relocate from their HMK house by June 3. I told Judge Molberg yesterday that we are making great progress toward that goal, but that we would be open to an extension of the TI [temporary injunction] on a case-by-case basis if and when it becomes necessary.”
I wasn’t at the April 6 hearing before Molberg. But I think the transcript of the hearing (copy below) shows Miles telling the judge something quite unlike what she told me. In court, Miles’ main concern had less to do with the welfare of the tenants than with her desire to shut off HMK’s revenue stream:
“We think it's premature to be talking about extending a situation that frankly on its face really just benefits the income stream of Mr. Khraish,” Miles told the judge.
And let’s stop one more time to make sure we get it. Whatever her argument may be about Khraish’s income stream, Miles is telling Molberg in this transcript that she would rather see the judge let his protective order die and expose the remaining tenants to eviction than allow Khraish to collect any more rent.
Khraish says he has no choice but to evict everybody the minute the order dies, and he says the city knows that better than anybody. The new tougher rental ordinance will expose him to fines of $150,000 a day and to criminal penalties if he accepts a single rent check after the order expires.
That’s why he wants to empty and knock down the houses. He says he knows these houses better than anybody. He says they cannot be brought up to the standards of the new ordinance. Only new replacement construction could meet the new code. If he doesn’t clear the houses and demolish them, he says he’s not only toast financially but could wind up in jail.
And then there is the other thing: It’s America. These are his houses. He doesn’t want to violate any leases or cheat anybody. He just wants to use his land for something else.
Which brings us to the land. From the very beginning, Khraish has argued that the mayor and Alonzo had some developer hiding in the woodwork. He believed they were trying to squeeze him with code enforcement, lawsuits, bad publicity, whatever else they could marshal to make him sell his land to their developer friend at cheap prices, even though West Dallas is experiencing a boom in land values.
I believed him, because it just sounded like a typical City Hall deal to me. All these people who never gave a rat’s ass about West Dallas all of a sudden are up in arms and on a holy crusade to help the poor. Whenever I see that, I think, “Oh yeah, right, help the poor and who else? Not by any chance somebody you play golf with in the Park Cities?”
Needless to say, both Khraish and I have been characterized as paranoid, a term I have come to realize often means, “Oh, damn, they’ve got us.” Therefore I was very interested to see in that court hearing transcript a description of a developer that the mayor and Alonzo have had in the woodwork from the beginning whom they would like to see take over HMK’s land.
Michael Hindman, a private attorney representing several tenant families, told Molberg in court: “I will add that prior to the temporary injunction being entered into, we did have a mediation. CitySquare had reached out to me, a charitable organization, and at that time, they were prepared to buy all HMK houses.”
Hindman told Molberg the CitySquare offer went nowhere at the time, but he said he thought he could revive it: “I believe that I can – you know, I can certainly represent to the court they've given me authority before to say that they are willing to pursue that avenue. And I have kind of additional knowledge that those resources can be made available to do that.”
I spoke with Hindman yesterday. He explained that the deal he suggested to Molberg was not a new development but was a reference to something he had discussed with CitySquare last year.
Larry James, CEO of CitySquare, confirmed that his organization had been involved in a potential offer for the HMK properties last year when all of this started. He said he is no longer interested. He said the main stumbling block has been land cost.
James told me that last year he was working with a developer who was interested in the Khraish properties: “I am not going to tell you his name because it’s inconsequential. … But the key, the key to the whole deal was the land cost.”
James said he attended a mediation meeting last year with Khraish, the mayor and other city officials but left the meeting before it concluded: “It became very clear very fast that Khraish was going to value those properties at a level that would make our deal totally impossible. If I have to pay $50,000 to $80,000 a lot for those lots, there’s no way my housing guy can make it even come out even.”
Khraish has a very different memory of the mediation. His memory is that James was not invited to the mediation but was brought anyway as an unexpected participant by Hindman. Khraish says he never mentioned price at the meeting. He said no one came to him before or after the meeting to make him an offer. “I have never discussed price with anyone, ever, because no one had ever made me an offer.”
He says, “I must be a semi-reasonable businessman, because I have a deal with Habitat for Humanity to sell them 130 properties, and Habitat is not going to pay a million dollars for the land.”
So let’s back off a foot or two from this, not try to see inside people’s heads, not waste our time trying to guess people’s personal motivations and recognize instead the one element that all parties to this dispute seem to acknowledge: Underlying the entire face-off between HMK and the city over the possibility of mass evictions next month there has always from the very beginning been a disagreement about land values. The price.
People on one side – CitySqare and Hindman – have expressed an interest in buying the land, but never directly to Khraish, who owns it. The only meeting, in fact, was in the mayor’s office with city attorneys standing by ready to sue. Not exactly a friendly offer.
Now let’s bring back in Melissa Miles, the assistant city attorney, who is telling Judge Molberg that it’s so important to cut off any remaining rental revenue Khraish may derive from these properties, so important that it’s worth cutting off the court’s protection for the families in them.
Really? And the families get the boot?
Miles told me, as she told Molberg, that the city hopes to see every tenant relocated by June 3. Khraish told me yesterday that the city’s promise of relocation for his tenants is a ruthless deception. He is in the process of filing with the court what he hopes will be 100 signatures by tenants (see first installment below) on a petition pleading for an extension of the protective order because they cannot find new homes. The petition says neither the city nor Catholic Charities, which was given a $300,000 grant to aid in relocation, has helped them.
Dave Woodyard, CEO of Catholic Charities, describes a wide array of social services he says his agency has been able to provide the HMK tenants. He concedes that the number of actual relocations that Catholic Charities has assisted in, of the original 300-plus HMK tenants facing eviction, has been only seven.
Woodyard echoes what others, including Khraish, have said about the possibility of relocating the Khraish tenants to equivalent housing in the same community: “If they are trying to remain relatively close from a neighborhood sense, I think it’s near impossible.
“It’s unfortunate," Woodyard says, "but to find affordable housing that fits within their criteria, what’s available is mostly apartments, not houses, and, if it’s a house, it’s probably quite some distance from where they are living today.” He says Catholic Charities will return to the city any unspent portion of its grant.
All of that puts Miles' promise of 100 percent relocation in an even more dubious light. So, back to the bottom line: the entity that wants the protective order to die is the city, not Khraish. And it’s all about price. Just so we know.
40617PenaVHMK by Schutze on Scribd
Tenant Petition by Schutze on Scribd
