Neighbors who backed a lawsuit to force an out-of-town landlord to improve his Baltimore properties now worry that a victory last summer could lead to demolition — an unwelcome resolution of the problem in at least one case.
Neighbors of 1613 N. Payson St., a two-story rowhouse in West Baltimore, received a tear-down notice in November from a private demolition firm. The property was one of 49 blighted properties a Baltimore Circuit Court judge ordered cleaned up by Texas real estate executive Scott Wizig and related limited liability firms.
A representative for the current owner said Monday the property is no longer scheduled for demolition, but that remains one of the routes to compliance accepted under the Baltimore housing code. Residents said tearing down the property — located across the street from Matthew A. Henson Elementary School — could make things even worse, opening up the site for trash dumping and drug dealing, while dragging down property values of nearby homes.
"It's going to be a hole in the wall like a black eye," said Warren Miles, 54, who lives around the corner on Appleton Street. "Next thing you know, the whole block will be gone."
Wizig, the founder of SWE Enterprises, did not respond to requests for comment made at his Texas office and through an attorney. He and his limited liability companies owned about 140 properties in the city at the time of the April 2013 suit, which also sought more than $8 million in damages.
Those damage claims were scheduled for trial in January.
But in October, membership interest in the limited liability companies involved in the suit transferred from Wizig and associated trusts to a new, Delaware-registered limited liability firm, Descendants Property LLC.
The holding companies subsequently filed for a Chapter 11 bankruptcy reorganization in November, citing about $100,000 in unsecured claims, including $61,100 to the city, $35,812 to a demolition firm and an "unknown" amount owed to community groups.
Wizig and his SWE Homes are now listed among the unsecured creditors, with a potential indemnity claim arising from the Circuit Court litigation, according to the documents.
Lawrence J. Yumkas, an attorney representing the companies in the bankruptcy, declined to identify his client, who has asked that the damages sought by the community groups be considered as part of the bankruptcy, filed in Maryland.
But he said Monday that plans for the Payson Street property, which Wizig's Harbor Pier Homes LLC purchased in 2010 for less than $5,000, have changed. The city issued a permit for interior work in October, with the property to be razed at a later date. No demolition permit has been issued.
"It's not currently on their demolition list," Yumkas said. "The current plan … is to try to work with parties to renovate it instead … though they certainly maintain the right to [demolish it] if things don't work out in another way."
Yumkas said his client is considering requests by other neighborhood groups to avoid demolition and could rehab or sell the properties instead. Compliance with the court order must happen independent of the bankruptcy suit, he said.
"We're listening to all requests, and if we can accommodate them, the client will certainly consider it," he said.
Community Law Center executive director Kristine Dunkerton said last week that the timing of any move with the properties likely would be affected by the bankruptcy. Her group is one of several firms litigating the claims on behalf of community groups.
"We're trying to work with them to make sure that we get the best remedy for each property," she said, "but ultimately it's their decision how they're going to comply with the order."
The Payson Street property, one of several boarded-up homes on the block, has been identified as a problem since at least 2010, when the city deemed it unfit for human habitation. Today, paint is peeling on its front steps and there are no steps at all in the garbage-strewn backyard, where overgrown plants run amok. A rodenticide control notice is attached to the plywood door, but siding on the second story looks recent.
Threats of unwanted demolition are rare due to the hefty $20,000-plus costs associated with razing properties, said City Councilman Nick Mosby, who represents the area.
Marvin "Doc" Cheatham, the president of the Matthew Henson Neighborhood Association, wrote a letter to city officials in late December objecting to the demolition. He said his group, a member of one of the organizations involved in the initial suit against Wizig, is willing to buy the house, which remains structurally sound.
The neighborhood didn't want to wait until it was too late to voice their concerns about the plans.
"It's a sigh of relief," Cheatham said after being told of Yumkas' statement. "We're going to continue doing all that we need to do just in case … but this is good news for us."