RES 2002-2424 - First King Rental Properties appeals condemnation of 526 N 32nd St • INTER-OFFICE COMMUNICATION
Date: September 18, 2001
TO: All Councilmembers
FROM: Buster Brown, City Clerk
SUBJECT: Condemnation Appeal Hearing held on the property located at 526 North 32nd Street
THE FOLLOWING IS A SUMMARY OF TESTIMONY GIVEN AT THE HEARING HELD
JULY 24, 2001:
Kevin Denker, Chief Housing Inspector, Planning Department appeared and stated in part that the
history of this property is, the current property owner of this property is the second owner since Housing
has been monitoring the property. The history of the property goes back to June 30, 1997 per a
neighborhood complaint with a couple of follow-up inspection in 1998. In February of 2000 the
department was notified that First King Rental Properties LLC had a purchase agreement on the property
and soon after that, on March 23, 2000 there was another condemnation hearing which was laid over to
July of 2000. On July 14, 2000 a first notice of violations was sent to First King Rental Properties
notifying them of the condemnation action. A follow-up inspection was performed on October 14, 2000
and a condemnation hearing was set for the new owner on October 19, 2000. At that time the
condemnation was laid over. Another follow-up inspection was done on December 5, 2000 and March 1,
2001 was a condemnation hearing with no owner present. The next hearing was set for June 14, 2001 and
at that hearing there was no owner representation present. There were a couple of neighbors present there
to complain about the condition of the property. At that hearing the property was condemned. Mr.
Denker, stated he tried to make contact with the owner yesterday to schedule an inspection before the
appeal comes up before,the City Council, but the owner denied them access to the interior of the building.
Mr. Denker, stated that the current owner has another rehabilitation under way with city financing and
that project was to be completed the original start date was June 14, 2000. The original completion date
was December 31, 2000. The contract was extended twice and now the new completion date is October
31, 2001. As of June 28, 2001 there was a pay request submitted to the Rehab Division, which was not
approved because the work was about at 70% complete at that time.
John Malone, Chairman of First King Rental Properties, Limited Liability Corporation, appeared
and stated in part that the record Mr. Denker presented to the City Council is not an accurate record of the
hearings held with the Condemnation hearings. Mr. Malone stated that they received this property under
distress, the owner ran out of capital and wanted to get out from under it. Mr. Malone stated his company
has a little capital and the skill to get it done as a general contractor and in some cases just his self as
contractors. Mr. Malone stated that the report from Mr. Denker states on March 20, 1998 the previous
owner was given 90-days to make repairs under the notice, and another 30-days under the second notice
of July 9, 1998 no repairs were made. Mr. Malone stated that is not true, he has the inspection report
from the Planning Department, Ray Krause. Mr. Malone, stated that Mr. Krauses' testimony to him is that
he it's not that he does not remember, it's that he has not been back in that property since then. Mr.
AGENDA DOC. O.
2,
•
Malone, stated that he does not know if Mr. Laurate paid from two inspections, but he has paid for two
•
$340.00 inspection fees. Mr. Malone, stated that no one has been in that property, the first time someone
wanted to get in there was yesterday when Mr. Denker wanted to look at it today. Mr. Malone, stated that
was a little late, if you're going to recommend that a property be condemned what do you need to see, you
should have seen it before it was condemned. Mr. Malone, stated that a lot of work has been done to that
property and he has essentially bought that work. Mr. Malone stated before they bought the property in
distress, they came down to the Planning Department and talked to four inspectors and told the inspectors
that his company was picking up the property and they wanted to rehabilitate it. Submitted a rehab plan
to the Housing Department. Mr. Malone, stated they went through a different company into a rehab
agreement which came to this Council for approval and the Council did approve it. It took a long time to
get through the process, in fact, he had to help correct the process. Mayor Daub asked him to help
because the process was not suitable for people to get through. There were ends to the rehabilitation
program that didn't match up. Mayor Daub told him it looked like the city is making him finance this
project twice. Then the Mayor asked him to help out by attending meetings. Sheri Cotton ran the
meetings and got the rehabilitation program sorted out. Under a different company, Genesis Rental
Properties they began the process through rehabilitation. In the process of fixing the process what really
needs to be done to rehabilitate a property, is to run it past the Planning Department first and find out
what all really needs to be addressed in your proposal for rehabilitation first and then do your proposal.
But he already a proposal in on this property from January, 2000, this is now June, 2000. Mr. Malone,.
stated he met with Ted St. Cyr and asked what needs to be addressed so that his proposal is
comprehensive and will be approved? In response, Mr. St. Cyr said the property needed to be inspected,
plus he needed to wait until the federal lead base paint guidelines are sorted out. Those guidelines did not
come out until October 5, 2000. So, October 5, 2000 is the first physical inspection of the property by
anyone out of the Planning Department since June of 1997. At that time Ted St. Cyr and Ed Dantzler
went through the property with Bill Gillispie of his company. Ted worked up a list of what needed to be
done and here is where the problem came in. He did not get the results of that inspection until May 11,
2001. Mr. Malone, stated that Ted St. Cyr was very helpful, but these kinds of things happen, the fact is it
happened inside the Planning Department. Mr. Malone, stated that while waiting for the inspection
report, in the mean time, the Chief Housing Inspector carries over some action he didn't know anything
about where it was with the previous owner, that he says goes back to 1997. And yet in his own record,
Mr. Malone's first notice of violation is July 14, 2000, this is after he allegedly missed a couple of
hearings. Mr. Malone, stated that they did miss the July 14th hearing, but as far as them having
documents for rehabilitation of the property he wanders why there are condemnations. In the mean time
maybe neighbors did complain but he was not aware of them. Mr. Malone stated that he has wanted to
get onto the property but this has been something that the Planning Department has equally held up. Mr.
Malone, stated that now it comes to the Council as a condemnation which shouldn't even come to the
Council. Mr. Malone, stated they tried to track this thing inside the Planning Department. There was e-
mail correspondence with Mr. Peters of the Planning Department, which was unresponsive. Mr. Malone
stated he does not feel this should be handled by the City Council, but the Council is his last resort here.
Mr. Malone, stated that his account on this and the Planning Departments account are vastly different.
Mr. Denker, stated that prior to August of 1998, December 1998; July 1999, November 1999,.
March 2000, July 2000, October 19, 2000 & the hearings March 1, 2001 and June 14, 2001, an inspector
was sent out to the site and he has photos in the files taken at those inspections. If the Inspectors are not
able to gain access to the site, they do verify the existing conditions of the property and if any
improvements have been made in the time period since the last hearing.
Mr. Malone, stated in answer to question, March 1, & June 14, 2001 Kevin Denker was called by
Lucy Gillispie and she told him that this property is in rehab and he told she didn't need to come, he knew
what was going on with the property. Mr. Malone stated that June 14, 2001 Bill Gillispie just failed to
show up. Mr. Malone, stated in answer to question that he submitted this property for rehabilitation
before he bought it, he bought it with rehabilitation in mind. The rehab process is set up so that you don't
start doing things because if you do, what ever you're working on will get disqualified from the
rehabilitation. So things that he was ready and willing to do, until the rehabilitation process, including
any inspection which details what he need to address gets done, it's crazy to start doing it. Mr. Malone,
stated that this took from January 2000 until May 11, 2001 which is 16-months he's waiting. Mr. Malone,
stated that there was only one meeting that he did not attend and the other stuff, he doesn't know why it's
in here. Mr. Malone, stated that they bought this property in March 2000 and in the record it shows that it
was in July 2000 when he got the first notice of hearing. The delays are not his fault.
Mr. Denker, stated in answer to question that Mr. Malone had notice of the March 1, 2000 meeting
and that he spoke with Lucy Gillispie at that time. Mr. Denker, stated that it is normal that either the
owners appear at the hearing or make arrangements through the department during the week of the
hearing if they can't make the hearing, notify the department why they can't make the hearing, because
that hearing is a show cause hearing. Mr. Denker, stated that prior to the March 1st hearing he had a
conversation with Lucy and she said that they were still in the process and he told her that since she had
given him an update and had contact with the department than she would not have to attend that hearing.
Mr. Denker, stated that he does not have a problem with First King trying to save this property, he just
thinks 18-months to repair it is overkill, you can build a new home in 9-months. Mr. Denker, stated that
in the long duration, he thinks a year it too long and will leave that decision up to the council.
Bob Peters, Planning Director, appeared and stated in part that after receiving information from
Mr. Denker that his property had been condemned, e-mailed him with a request that he overturn Mr.
Denker's decision. Mr. Peters, stated he e-mailed Mr. Malone back stating he would not do that and in
fact, he encouraged Mr. Malone to contact Buster Brown, City Clerk in order to process the appeal for
hearing today.
Mr. Malone, stated in answer to question that he denied Mr. Denker access to property because he
felt it was a disingenuous request
MOTION TO LAY OVER 8-WEEKS UNTIL SEPTEMBER 18,2001. CARRIED 7-0
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05/29 20�?1 09:58 4023336931
, MICRO ha1h,I SYSTEMS PAGE 02
• Friday, June 29, 2001
REHABIt ATION WORK SCHEDULE
526 North 32nd Street
1ST Kings Rental Properties
13939 Gold Circles
Omaha, NE 68144
January 17, 2000
1. Applied for rental rehabilitation program.
2. Presented preliminary cost estimate for a four apartment conversion
June 14, 2000
1. First Notice of Violation
October 5, 2000
1. Property Inspected by Ed Dentzier and Ted St.Cyr
May 11, 2001
1. Received packet From Ted.3t. Cyr stating violations found during October 5, 2000
inspection.
2. Received notice that lead-based paint hazards are presumed present.
3. Received Presumption Repor5:.
4. Received information packet so contractors concerning lead hazard reduction work.
May 11, 2001 thru September 11, 2001
1. Prepare architectural Drawings for a three apartment conversion
2.. Prepare Cost Estimate
3. Secure contract with the City regarding rehabilitation construction loan program
September 11, 2001 thru December 11, 2001
1. Submit bids to sub-contractors
2. Begin preparation for construction
a. Prepare construction schedule
b, Secure sub-contractors •
c. Order material
December 11, 2001 thru December 11, 2002
1. Construction on Rehabilitation Project
•
O�� D
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Date 7-10-01
Planning Department
Record and Inspection Report
For Condemned Structure
Street North 32nd Street No. 526 Condemned June 14, 2001
Structure dwelling Size 2,992 sq. ft. Type wood framed
Stories two Units two Height 36'
Legal Lot South 48 feet of Lot 3, Addition Potter& Cobbs Sub Division
Utilities: Sewer Z Water Z Power ►i4 Gas El
Present Owner: 1st Kings Rental Properties, 13939 Gold Circle#210, Omaha, NE 68144 Attn: Lucy A.
Gillespie
Condition of Structure: fair Photos yes
Remarks: The dwelling was originally written up for code violations under the previous owner, Daniel
Lerette, on June 30, 1997. No repairs were ever made by the previous owner and the property was
transferred over to condemnation on March 20, 1998.
On March 20, 1998 the previous owner, Mr. Lerette, was given 90 days to make repairs under the 1st
Notice, and another 30 days under the second notice dated July 9, 1998. No repairs were made.
Several condemnation hearings were held with the previous owner.
On February 9, 2000 the property was sold to 1st Kings Rental Properties.
At the hearing on March 23, 2000 there was no appearance by the new owner. The property was laid
over to give the new owner time to make repairs until July 13, 2000.
At the hearing on July 13, 2000 there was no appearance by the owner. The hearing was laid over until
October 19, 2000.
At the hearing on October 19, 2000, no repairs were made and the owner was assessed the 1st
inspection fee of$340.00. The owner was present at the hearing and requested a layover. At the time
the owner was currently working with Rental Rehab for a loan to make the repairs. The hearing was laid
over until March 1, 2001.
The second notice was mailed to the owner on October 20, 2000 giving them until November 20, 2000 to
make repairs. No repairs were made and the owner was assessed the 2nd $340.00 inspection fee.
At the hearing on March 1, 2001,there was no appearance by the owners. There were no signs of
repairs but the hearing was laid over until June 14, 2001.
•
At the hearing on June 14, 2001,there was no appearance by the owners. Two neighbors appeared at
the hearing complaining about the structure and that no repairs were being made. The structure was
condemned as a nuisance to the neighborhood.
The owners are currently working on a rental rehabilitation project with the City of Omaha under the name
of Genesis Rental Properties LLC at 1424 Martha Street. They entered into the agreement May of 2000.
The original agreement had expired and two extensions have been given. Currently they are
approximately 70 to 75%complete with 1424 Martha Street.. The current agreement expires October 1
2001.
Taxes Due as of 7-6-01: Taxes are current.
Condemnation First Notice Letter: July 14, 2000 Inspection Fees Due: Paid in Full
Condemnation Second Notice Letter: October 20, 2000 Inspection Fees Due: Paid in Full
Hearing Dates: 8-13-98; 12-10-98; 7-1-99; 11-18-99;3-23-00; 7-13-00; 10-19-00;3-1-01; 6-14-01
Resu ts: Co a ned
By.
Date to Clerk: July 10, 2001 Chie ousing Inspector
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City of Omaha
Planning Department
Housing and Community
Development Division
October 20. 2000
1st Kings Rental Properties
526 North 32nd Street
Omaha, NE 68131
RE: 526 North 32nd Street Entire structure 2 story wood frame dwelling
Section I: The following deficiencies exist and must be corrected in order for your property to meet.
Chapter 43 Violations and Corrective Action •
BASEMENT INTERIOR
Provide appropriate sized water heater to service peak load demands of tenants.
Repair clog at sewer drain.
Replace all deteriorated window units.
Repair/replace all non-code plumbing lines or portion thereof per Omaha Plumbing Code.
Repair/replace all non-code electrical services or portion thereof per Omaha Electrical Code.
Repair basement chimney flue.
Remove all trash and debris.
Back plaster deteriorated area of brick mortar at foundation.
Repair/replace severely cracked and upheaved concrete floor.
GENERAL INTERIOR
Repair/replace damaged walls and ceilings.
Prime and paint damaged wall and ceiling surfaces.
Repair/replace all inoperable and deteriorated window units or portion thereof.
Repair broken doors and hardware.
Remove trash and debris.
Repair/replace all non-code plumbing and electrical or portion thereof per Omaha Municipal Code.
Replace non-code framed walls and ceilings.
Install stairway handrails where missing.
Repair/replace deteriorated and missing floor coverings.
Repair damaged door frames.
Repair broken electrical fixtures,replace non-code fixtures.
Repair damaged counters and cabinets.
Replace/remove deteriorated natural gas lines at stoves.
Repair inoperable stoves.
Thoroughly clean all habitable living areas.
Repair/replace broken plumbing fixtures.
Replace all non-code framing.
Page-2-
EXTERIOR
Repair/replace all damaged storm windows and screens.
Repair south exterior building skin where removed.
Repair rough framing at building skin.
Repair deteriorated rear roof and rotted framing members.
Replace rotted and deteriorated eaves and gutters.
Replace cracked and upheaved front terrace steps.
Install handrail at terrace steps.
Install guardrail per Code at front porch.
Remove all trash and debris from exterior.
Provide a paved surface for rear parking.
Repair broken storm doors and frames.
Repair/replace deteriorated entry door frames and thresholds.
Repair exterior siding and building skin.
NOTE: All plumbing,electrical,mechanical and wood framing alterations or repairs shall require the appropriate City of
Omaha Permits and Inspections.
c: Wayne V. Kiltz, 101 N.38 Ave., 68131
1st Kings Rental Properties,c/o John Malone, 11806 Washington Cir,68137
1st Kings Rental Properties, 13939 Gold Cr.,Suite#210, 68144
1
OMAHA. NF
Cityof Omaha. Webras&a °a le
1819 Farnam—Suite LC 1 2 viatrt
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Omaha, Nebraska 68183-0112 . '' _: c'
Buster Brown (402) 444-5550
City Clerk FAX (402) 444-5263 oR'7.ED FEe03r4�
July 12,2001
First Kings Rental Properties
Attention: Lucy A. Gillespie
13939 Gold Circle#210
Omaha,Nebraska 68144
Dear Ms. Gillespie,
WHEREAS, on the 29th day of June 2001, there was filed with the City Clerk of the City of Omaha, a
request for an appeal on the Condemnation of a two-story wood framed dwelling, legally described as the
south 48 feet of Lot 3, Potter& Cobbs Sub-division Addition, located at 526 North 32nd Street, Omaha,
Nebraska.
WHEREAS, said appeal complies with the requirements as set forth in Section 43-38 Appeal Procedure
of Division 4 of Unsafe Buildings of General Ordinance of the City of Omaha, passed June 27, 1995 as
amended; and, •
WHEREAS, the City Clerk of the City of Omaha as directed by Section 43-38 Appeal Procedure of
Division 4 of Unsafe Buildings of General Ordinance of the City of Omaha, passed June 27, 1995 as
amended, has set Tuesday, July 24, 2001, as the date of Hearing on the Appeal of Condemnation of the
above-mentioned property.
•
THEREFORE, You as Owner, Lessee, Mortgagee of Record, Occupant, or Interested Party of such
building are hereby notified to appear in the Legislative Chambers, Level LC, Omaha/Douglas Civic
Center, 1819 Farnam Street, at 2:00 o'clock p.m. on the above-mentioned date to show cause why such
building or structure should not remain condemned as a nuisance and ordered torn down.
Since ly yours,
Buster Brown
City Clerk
BJB:gpm
ALL REQUESTS FOR SIGN LANGUAGE INTERPRETERS (SIGNERS)WILL REQUIRE A
MINIMUM OF 48 HOURS ADVANCE NOTICE.
IF ALTERNATIVE FORMATS ARE NEEDED, ALL REQUESTS WILL REQUIRE A MINIMUM OF
72 HOURS ADVANCE NOTICE.
PLEASE NOTIFY GRACE MANTICH-444-5556,
IF ARRANGEMENTS NEED TO BE MADE
•
•
DEPOSIT DATE CITY OF OMAHA
06 29 01 CASH RECEIPT ACCOUNTING PERIOD
MONTH DAY YEAR BUDGET FISCAL YEAR
CITY CLERK'S OFFICE
CR020C
0 O ACTION: () ORIG; (M) MODIFY; (X) CANCEL
EMPLOYEE: GRACE MANTICH DOCUMENT TOTAL$ 300 . 00
•
DEPOSIT
NUMBER EXPLANATION AMOUNT
02203-1 Condemnation Appeal Bond for the property $300.00
lcoated at 526 North 32nd Street, submitted
by Lucy A. Gillespie, 1st King Rental _
Prop.
RECEIPT ACKNOWLEDGED
BY CASHIERS OFFICE
DATE
BY
AMOUNT 3
TOTAL DEPOSIT $300.00 POSTED BY:
REV BAL DEPOSIT
FUND AGENCY SRCE SHEET ACCOUNT NAME AMOUNT
001 090 1651 _ BINGO C
001 090 6010 MISCELLANEOUS A CURRENCY $ 300 00
717 195 2209 HANDICAPPED S
712 195 2209 BID DEPOSITS H COIN
726 195 2209 DEMOLITION PERFORMANCE BOND $300.00
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Form No. LGFS-C89 •
INTER- OFFICE COMMUNICATION
Date: June 29, 2001
-TO: Housing Division
fi
FROM: Buster Brown, City Clerk r
SUBJECT: Condemnation Appeals -Verification of Square Footage
LOCATION: 526 North 32nd Street DATE OF CONDEMNATION: June 14, 2001
SIZE: 2,992 Sq. Ft. STORIES: HEIGHT:
OTHER STRUCTURES AND SIZE:
SIGN
* * * * *. ..,
FOR CITY CLERK'S USE ONLY:
it
DATE DATE APPEAL FILED: 06/29/01 SQUARE FOOTAGE: 2,992 Sq. Ft.
AMOUNT OF SURETY BOND: $300.00 CASH DATE RECEIVED: 06/29/01
APPELLANT'S NAME AND ADDRESS: Lucy A. Gillespie
1st King Rental Properties
13939 Gold Circle#210
Omaha,NE 68144
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PHONE NUMBER: 898-0055 '1
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. �U� Planning Department
• D t t Omaha/Douglas Civic Center
'' 1t it ® 1819 Farnam Street,Suite 1100
f. " t Omaha,Nebraska 68183-0601
1.` 0 I JUN 15 PM 2� 2T (402)4114-5150
Ja '� '.,: Telefax(402)4'1/1-6140
4'%n Ftssatit' • CITY, CLERK Robert C.Peters
City of Omaha O M I H A, NEBRASKA Acting Planning Director
Mike Fahey,Mayor
June 15, 2001 •
•
1st Kings Rental Properties
13939 Gold Cir. #210
Omaha, NE 68144
RE: 526 N 032 ST
Owners of record and to any and all persons having any right, title or interest in the property legally
described as following:
S 48' of Lot 3, Dotter & Cobbs Subdivision
WHEREAS, a condemnation hearing was held on June 14, 2001 and the above-referenced 2
STORY WOOD FRAME DWELLING was declared a nuisance and condemned.
THEREFORE, you as owner, lessee, mortgagee of record, or occupant of such building are hereby
ordered to demolish and remove the above- referenced building or structure.
You have fifteen (15) days from the date of the condemnation hearing to appeal this order to the
City Clerk's Office. If an appeal is not made to the City Clerk's Office within fifteen (15) days, the
order becomes effective at that time and is final. The appeal procedure is described in the
enclosed attachment. The structure or building encompasses 2,992 sq. ft. square feet.
Sinc y,
9'0
Key' J. Denker
Chie using Inspector
CXster Brown, City Clerk
1st Kings Rental Properties, 13939 Gold Cr., Suite #210, Omaha, NE 68144
Wayne V. Kiltz, 101 N. 38 Ave., Omaha, NE 68131
1st Kings Rental Properties
c/o John Malone
11806 Washington Cir., Omaha, NE 68137
, r
- 4 ` Sec. 43-38. Appeal, procedure.
(a) Whenever a determination and order is made as provided in section 43-35, the
owner, lessee, occupant or mortgagee of record may appeal the determination and
order to the city council by filing with the city clerk written objections to said
determination and order, a cash deposit or corporate surety bond within fifteen (15)
days from the date of the determination and order and file a work schedule approved by
the planning department. The written objections shall set forth the location of the
• property, and all grounds for the objections. The cash deposit or surety bond shall be
as follows:
(1) A structure of 1 to 3,000 square feet $300.00
(2) A structure 3,001 to 9,999 square feet $1 ,200.00
(3) A structure 10,000 square feet or more $3,000.00
The purpose of the cash deposit or corporate surety bond is to provide an additional
assurance that the appellant has the resources and intent to repair the structure, as
provided by this Code, within a reasonable specified time and that the structure will
remain safe and secure until all repairs have been completed. The cash deposit or
bond will be returned to the appellant only after all required repairs have been made to
the structure per the order of the director or his duly authorized representative.
(b) Upon receipt of such written objections to the determination and order, and the cash
deposit or corporate surety, the city clerk shall set a hearing date and shall immediately
notify the director of the planning department or his/her duly authorized representative,
stating the date, time, and place of the hearing and that the parties are to appear before
the city council to be heard on the matter.
(c) The city council shall hear the testimony of the objectors and the director of the
planning department and other interested parties; and after the hearing, the city council
may affirm, modify or reverse the determination of the director of the planning
department or his/her duly authorized administrator.
(d) In the event that the appealing party does not make the necessary repairs on the
building or structure within the specific time or fails to keep the building or structure
secured, the cash deposit or surety bond shall be forfeited as a penalty. This provision
may be modified by the city council. •
(e) In the event the city council grants an extension to the appealing party and the
repairs are not completed during that time period, a subsequent cash deposit or surety
bond equal to the amount of the original, shall be provided in order to continue the
condemnation appeal. Only the most recent subsequent cash deposit or surety bond
will be returned after all required repairs have been completed.
(Ord. No. 33582, § 1(43-38), 6-27-95; Ord. No. 33922,§ 1 , 7-2-96)
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Comparison Condemnation Records
Picture File
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Bid number 2085 condition Council Case
Address 526 North 32 St
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Bid City of Omaha Planning Department
" Comparison Condemnation Records
Picture File
Picture ID No. 1640 picavaii X
Bid number 2085 condition Council Case
Address 526 North 32 St
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RE: Condemnation Appeal, 1st Kings Rental Properties, 525 N. 32"a St.
SUMMARY OF ACTIVITY
This matter is not about the property, but about people and processes. The Planning Department
has two processes—one a condemnation, and one rehabilitation—going at the same time. Both
are victimizing us.
1st Kings Rental Property(1KRP) is seeking to enroll this property in a rehabilitation program in
concert and contract with the City of Omaha. The process of qualifying a property is complicated
and time consuming and requires certain inspection processes and reviews within the planning
department to be completed.
While on side of the planning department was working on the rehabilitation inspection process,
the other side was also advancing the condemnation process based on a previous inspection
(two years prior to our purchase) by a different inspector. Proceedings on the property were laid
over 19 months after that inspection.
While 1st Kings was waiting for the rehabilitation inspection process to complete, it was required
to pay for inspections ($680) in connection with the condemnation process which had been laid
over from 1998. These inspections did not actually take place, except for, perhaps, a drive by.
We would like that$640 reimbursed.
The rehabilitation process inspection took place in October, delayed due to changing Federal
regulations concerning lead-based paint. These results were delayed quite some time within the
planning department, and then hand-delivered to Bill Gillespie of 1 KRP on May 11th, 2001 by the
inspector, together with the new lead-based paint requirements.
In October, a condemnation hearing took place in the planning department. Kevin Denker was
informed that the property was in the rehabilitation approval process. We think he didn't pay
attention. He gave us until March to complete the work on the building. By all observations, that
was a totally ridiculous assessment of the time required.
Typically, according to rehabilitation inspectors, 18 months from the time a rehab agreement is
signed is allocated for work to be done.
In June, the Planning Department met for a condemnation hearing on the property. We did not
attend, which was an oversight. The planning department recommended condemnation and
removal of the structure, admittedly unaware that the property was in the rehabilitation process.
Furthermore, the department refused to reverse their error, and so we are asking the City Council
to reverse the Planning Board's decision in this appeal.
Timeline
12/16/1999 1st Kings invited to purchase 325 N 35th, which is in distress.
1/5/2000 Discussions with Planning Department Inspectors on property, including Ray
Krause, Ted St. Cyr, Joe Wazgis, and Ed Danzler.
1/18/2000 Preliminary plans to Housing Department, Dave Tollefsrud.
3/20/2000 Closing on property, first detailed notification of property deficiencies through title
company.
June,2000 Discussions with Planning and Housing departments on reformation of the Rental
Rehabilitation program, including Sheri Cotton, Ed Danzler, Ted St. Cyr and a
few others.
7/14/2000 1st Notice of Violation from code enforcement, 1998 report given to 1st Kings.
Sept/2000 Chief housing inspectors change.
10/5/2000 Physical inspection of premises with rehabilitation inspector and supervisor. (St.
Cyr and Danzler).
Page 1 of 8
RE: Condemnation Appeal, 1st Kings Rental Properties, 525 N. 32nd St.
10/19/2000 Planning department condemnation hearing.
10/20/2000 2nd Notice of Violation from code enforcement.
5/11/2001 Written results of October Inspection hand delivered to Bill Gillespie at location of
other rehabilitation (1424 Martha Street).
6/15/2001 Condemnation decision by planning board, as propounded by planning
department, recommended by housing inspector.
6/18/2001 Bill Gillespie talks to chief housing inspector Denker. "We don't care about you
and your property. We care about the neighbors who are complaining."
July, 2001 Discussions with Denker, Sheri Cotton, and Buster Brown. Emails to Peters, and
Paul Landow of the Mayor's office.
7/24/2001 Appeal of condemnation judgment to City Council.
NARRATIVE
It has recently been ruled by the Planning Board, through the recommendation of Mr. Peters and
his staff in the Omaha City Planning Department, that our structure at the above address be
condemned and removed at our expense.
According to existing ordinances, the City Council is our only appeal to that ruling.
This correspondence is to inform you of the very many good reasons to overturn the
condemnation order.
HISTORY OF THE PROPERTY.
Our company purchased this property from an owner under distress in his attempts to rehabilitate
it. As we were told, the previous owner lacked sufficient capital to reconstruct the property
according to his ambition.
The property was partly underway in construction to turn it into four apartments. (Our plan is to
turn it into three apartments.)
Whereas we knew the property had a certain number of deficiencies, we were not of the opinion
that it would inexorably move to condemnation. We personally discussed all aspects of the
property with the inspectors from the planning department assigned to it. Those discussions
lasted for several hours. We were very careful to inform them that we were going to rehabilitate
the property in accordance with the programs in place to do that, specifically the rental
rehabilitation program.
OUR EFFORTS WITH THE PROPERTY AND REHABILITATION.
Our company sought to refine and approach the rehabilitation of the structure according to an
existing HUD grant program administered through the city. That program is an affordable housing
initiative that partners private investors with the City of Omaha using HUD funds as a loan. A
sister company of ours—Genesis Rental Properties—is presently in such a partnership on a
property in a distressed area of the city.
The program for rehabilitation had many onerous difficulties in coming to agreement with the city.
In fact, there were sufficient disconnects and inconsistency in the program that it took the
intervention of Mayor Daub, and the persistent, effective efforts of Sheri Cotton of the City's Law
Department to bring parties together to build the necessary structures to get a sensible
arrangement in place.
As Hal Daub observed when presented with the relevant facts, "It sounds to me like we are
asking you to finance this thing at least twice. That doesn't make sense. We need to do
something about it."
Page 2 of 8
1
RE: Condemnation Appeal, 1st Kings Rental Properties, 525 N. 32"a St.
Sheri Cotton told us in no uncertain terms that if we wanted this problem solved, we were going to
have to work through the nitty-gritty details with several people in the city planning and housing
departments. We did that, participating in discussions and meetings. We also presented a few
innovations that the city adopted into the program structure. Frankly, we think we made significant
contributions to help make the rehabilitation program work better, and would refer you to key city
employees who we are comfortable would verify that.
It came at the considerable expense of our time, by the way, but we believed ourselves to be
contributing to the greater good of more than ourselves in it. I design complex systems for a
living, and charge a fair rate for doing so, but contributed my time to this effort to help fix a
problem. We benefited some, of course, but so would anyone thereafter using the program.
With our new-found understanding of the rehabilitation program, and our experiences with it
theretofore, we revamped the approach to our second rehabilitation—the address above
referenced—armed with that knowledge. Without boring you with many details, that entailed
sending in a preliminary plan, and seeking a written judgment by the Planning Department
Housing Inspector for a list of things that needed to be done on the property. It's important to note
that this is a DIFFERENT inspector than the one who recommended the condemnation, and thus
his list of requirements for the property is DIFFERENT than the list for which the property has
been condemned.
We submitted the preliminary plans for the rehabilitation in April of last year. The relevant
rehabilitation inspector on the property was then to review the preliminaries, and, among other
things, give us the list of necessities that must be addressed. Due to changing requirements in
the area of lead-based paint, that required a delay, as we understand it.
There may have been additional delays due to certain failures within the planning department
bureaucracy.
THE PROCESS OF CONDEMNATION.
Bill Gillespie of our company, and the relevant housing inspectors, met to review the property on
October 5th, 2000.
Due to some sort of disconnection in the planning department, we did not receive that list of
requirements until May 2001.
What we have lately discovered is that were two separate streams of activity taking place in a the
planning department among two closely related but different groups of city housing inspectors.
One group is a code enforcing group, as we understand it, and the other is for rehabilitation
programs. These inspectors all sit together, know each other, and we met them together when we
discussed the rehabilitation of this property.
In fact, the inspector(Ray Krause)that original inspected the property in 1998 no longer works in
the code enforcement division, but in the rehabilitation division, and despite the paper trail to the
contrary, was not at all consulted in the hearing that recommended the removal of the structure.
In fact, he was not consulted as of yesterday.
I invited him to come today, but when I reached him this morning, he had spoken with others, and
said he wasn't coming.
Meanwhile, the condemnation proceedings on the property merely continued as if we were doing
nothing. I might point out that the city continually charges$300 every six months just because this
process continues, and that is an unfair burden. The process itself can become—and has to us—
an unfair burden as well. Repeated attendance at meetings is apparently required, even when
there is no information to be given.
In mid-June 2001, Bill Gillespie of our company inadvertently failed to attend a Planning Board
meeting. In his absence, the Planning Department recommended condemnation of the property,
and removal. We brought to the attention of the Chief Housing Inspector that the property was in
the process of qualifying for rehabilitation program.
Page 3 of 8
b.
RE: Condemnation Appeal, 1st Kings Rental Properties, 525 N. 32nd St.
He said he checked to see if our rehabilitation application it was progressing, and that it was not.
The fact is, it had been held up by a housing inspector from October to middle May. When he was
informed of this, he said "I don't care about you and your property. I care about the complaining
neighbors."
I personally inquired further about the complaints—especially because we had talked with the
neighbors, and have even made modifications to our plans based on their comments—the
inspector said they were anonymous. I told him he should not act on anonymous complaints, that
it is essentially unjust.
I will note that despite condemnation proceedings, our property is valued far higher than the
neighbors, and we are taxed accordingly. Roughly 25% of that tax goes to city government.
The Chief Housing Inspector claimed at the same time that our efforts to enroll the property was
irrelevant to the condemnation proceeding, and that he tried to find where it was in the process
and could not find it. I told him he could not have it both ways, that it was irrelevant, and that he
was looking to see where it was. Clearly, if he looked to find it, it was not irrelevant. If he did not
find it, and now realizes it could be found, he should change his mind, and recommend to the
Acting Director that the property not be condemned.
At that point, he stubbornly refused to make that consideration, and became unreasonable.
The preliminary application for rehabilitation had been misfiled -with regard to the company
name, not the address-with Mr. Tollefsrud of the Housing department. Recall that we filed that
preliminary application in January of 2000, and that Tollefsrud has nothing to do with that
application until the revisions are in, based on the inspection by the planning department.
I went down to see Mr. Peters at the Planning Department after he was unresponsive to my
emails. He became unavailable while I stood in the outer office. Further, one of his staff came out
and told me I needed to work both sides of the Planning Department. I told her that, because the
planning department's two sides meet at the top of the department, I should not need to work
inside the department, but that should be the province of the Acting Director, and that I cannot
possibly understand the inner workings of the planning and housing departments, and still
conduct my own affairs.
The fact is this: when a lot of this information was discovered, Mr. Peters could have very easily
overruled this judgment, but decided to waste our time and yours with this appeal process.
In summary, we are being victimized by the inscrutable machinations of a department that offers
the public a disconnection between two variant processes as a reason for unreasonable
outcomes. As if that is not bad enough, the Acting Director and his staff offer smug indifference, if
not intransigence, as a ready response.
Page 4 of 8
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RE: Condemnation Appeal, 1st Kings Rental Properties, 525 N. 32nd St.
EXHIBIT 1: EMAIL TO ROBERT PETERS
Original Message
From:John Malone[mailto:john@malone.net]
Sent: Thursday,June 21,2001 4:23 PM
To:'Peters,Robert(Ping)'
Subject:RE: 526 N.32nd
We have since discovered that it has been under rehabilitation since around 1997 according to Kevin
Denker of your office.
Unhappily,there is a process that requires us to every 90 days to attend some kind of meeting and pay some
sort of fine.It's odious,but the real problem is that one member of our partnership spaced the meeting help
sometime around the 14th of June.We had talked to very many city planners about this building,and they
understood that we were preparing a plan for rehabilitation participation with the city on the building.
We have been in touch with neighbors about the building,and due to some of their concerns,we have been
revising the architectural plans for the property.We have not yet submitted the rehab plan,which will no
doubt be needing city council approval.
Here's our complaint:the city planners have very well been informed of our plans and intentions on the
property.They know we recently purchased it. We have been paying taxes on it.They know our scheme is
to rehabilitate it and other properties.Nevertheless,one of them told one of our partners"we don't care
what you are doing"and"what we care about is the neighbors complaining,"and"I have been getting
complaints about this since 1997."
We do not know who are the neighbors complaining,but we do know that one of them told us he would
start complaining and oppose our rehabilitation if we did not pay him$50,000 for his property-property
assessed at$16,000.We would have been happy to talk to them if the planner who was fielding the calls
was interested in neighbors talking to each other.
I have called Sheri Cotton on this because she has been a real pro and helped us navigate issues in the city
before.
We feel that there is an inexorable process in place to just roll over us.It's especially depressing when we
think we are doing a good work in the city in which we have lived for 50 years,with our longtime
classmates and friends even deeply involved in city government!
John J.Malone, Sr.
Chairman, 1st Kings Rental Properties
13939 Gold Circle
Omaha,NE 68144
Tel. (402)333-6783 ext 121
Fax. (402)333-6931
john@malone.net
Original Message
From:Peters,Robert(Ping) [mailto:rpeters@ci.omaha.ne.us]
Sent: Thursday,June 21,2001 4:18 PM
To:'john@malone.net'
Cc:Denker,Kevin(Ping)
Subject: 526 N.32nd
John...In response to your email concerning the above referenced property,an appeal of the administrative
determination must be filed with Mr.Buster Brown,City Clerk,by July 29,2001. Please contact Mr.
Brown at your earliest convenience at 444-5557.
Regards,Robert Peters,Acting Planning
Director
Page 5 of 8
r
TO: Members of the Omaha City Council
FROM: 1st Kings Rental Properties LLC
John J. Malone, Sr.
Chairman
RE: Condemnation of 526 N 32" Street
Original Message
From:John Malone [mailto:john@malone.net]
Sent: Thursday,June 21,2001 4:23 PM
To:'Peters,Robert(Ping)'
Subject:RE: 526 N.32nd
Thanks for the extra month to make the appeal.I was afraid you wouldn't do anything at all to help us.
Original Message
From:Peters,Robert(Ping) [mailto:rpeters@ci.omaha.ne.us]
Sent: Thursday,June 21,2001 4:37 PM
To: 'John Malone'
Cc:Denker,Kevin(Ping)
Subject: RE: 526 N. 32nd
Importance:High
John,My email was in error. The deadline is June 29,2001 not July 29,
2001. I apologize for the typo. Robert
From:John Malone
Apology accepted.
My previous gratitude was evidently misapplied.
You were totally unresponsive to each and every detail of my email.Especially with a new mayor just starting in his
administration,I don't think that is a particularly helpful thing to do.Many of us are hoping and praying that things
will get better in city government,in order that we can lead peaceful and productive lives.
First your guy says he doesn't care about property owners who are rehabilitating homes in contract and concert with
the city,and now you simply ignore a plea for help,and copy him on your response.That's pugnacious of both of
you,frankly.
This is my city,too.I grew up here,my family and grandkids are growing up here.Bernie Simon was like an uncle
to me growing up,and Frank Brown was my schoolmate.They and other schoolmates of my youth-in high school
and college-have and are still making positive contributions to city government and areas public service.
I didn't expect you to treat me this way,and I don't appreciate being summarily ignored.
I have included the correspondence I sent you first sent you for others to read.
Page 6 of 8 7/24/2001
. l
TO: Members of the Omaha City Council
FROM: 1st Kings Rental Properties LLC
John J. Malone, Sr.
Chairman
RE: Condemnation of 526 N 32nd Street
ANSWER TO RECORD AND INSPECTION REPORT of July 10th, 2001.
He that is first in his own cause seemeth just;but his neighbour cometh and searcheth him.
Proverbs 18:17
The dwelling was originally written up for code violations under the previous owner,Daniel Lerette,on June 30th,
1997.
Stipulated.
No repairs were ever made by the previous owner and the property was transferred over to condemnation on March
20t", 1998.
While we do not know when the remodeling work substantially underway in the premises took place,the above
statement is only true if it substantially occurred after March 20t", 1998.
On March 20, 1998 the previous owner Mr.Lerette was given 90 days to make repairs under the 1st Notice,and
another 30 days under the second notice dated July 9, 1998.No repairs were made.
These details are for the I5`time told to us(1.KRP).
Several condemnation hearings were held with the previous owner.
Unknown to.1KRP. The word"several"here is problematic,however, when at the bottom of the document signed
by Denker(Record and Inspection Report for Condemned Structure, 7/10/2001,hereinafter "The Record'),the
hearing dates are listed us 8-13-98,12-.10-98, 7-1-99, 11-18-99. We suppose "four"condemnation hearings were
held,and we do not at all know how many the previous owner attended.
On February 9,2000 the property was sold to 1st Kings Rental Properties.
Our records indicate that closing tools place on the property on March 20t'`,2000.
At the hearing of March 23`d,2000 there was no appearance by the new owner.The property was laid over to give
the new owner time to make repairs until July 13,2000.
There was no notice of hearing given to the new owner. We find this remark to be completely disingenuous by the
Chief Housing Inspector,and pejorative toward I.KRP. The internal evidence of the record itself belies it.At the
bottom(like record,you can read"Condemnation First Notice Letter"dated July.14`",2000.A First Notice is
precisely that. How is it possible for there to be two hearings with "no appearance by the new owner"when yet a
"First Notice"is being sent afterwards?
At the hearing on July 13,2000 there was no appearance by the owner.The hearing was laid over until October 19th,
2000.
See above.All of this happened entirely without any knowledge by.IKRP? We did not buy a property
"condemned"nor was there anything in addition to the deficiency list to notify us that certain hearings on
condemnation were scheduled prior and subsequent to our purchase,until the First.Notice.
SUSPICIOUSEYABSENT FROM THE RECORD IS A PARAGRAPH NOTICE THE DATE OF THE FIRST
NOTICE.
At the hearing on October 19,2000 no repairs were made and the owner was assessed the 1st inspection fee of
$340.00.The owner was present at the hearing and requested a layover.At the time,the owner was currently
working with Rental Rehab for a loan to make the repairs. The hearing was laid over until March 1st,2001.
Further suspiciously absent from this account has been the work by housing inspectors,and documents filed with
the city to apply for a Rental Rehabilitation loan on this property. Frankly, we become suspicious ofthe motives
of the Chief Housing Inspector(CHI) when such omissions recur throughout not only the process of
condemnation including the hearings,but also in this document submitted to the City Council.It denotes
carelessness at least,and, when combined by other remarks by the CIII,connotes to us ill will.
In attempting to move along the process of qualification for rental Rehabilitation,Bill Gillespie of our company
set about to have an inspection carried out by the inspector assigned to the rehabilitation project—Ted St. Cyr—
and the CHI's equivalent on the "Rehab"side of the Planning Department,Ed.Danzler.
One VERY LARGE.IRONY in all this is that the rehab inspector previously assigned to this property, which in
part created the delays,from the planning department we have endured,is now the CHI. In fact, as we understand
it,Mr..Denker. was on the rehab side of the house,and was assigned this property until he received his new
Page 7 of 8 7/24/2001
I ,
TO: Members of the Omaha City Council
FROM: 15t Kings Rental Properties LLC
John J. Malone, Sr.
Chairman
RE: Condemnation of 526 N 32" Street
position,and the inspector who originally reviewed this property from the code enforcement side,Ray,Krause,
took his position.
Attie time.Denker became the CHI,the property was assigned to Ted St. Cyr in rehab.
St. Cyr recommended that it would be best to carry that inspection out and modify the proposal on file with the
Housing Department according to the new guidelines for lead-based paint that were being proposed,but which
he did not,yet have in written,form.
Therefore,Dander,St. Cyr,and Bill Gillespie carried out the inspection on October 5th,2000.Since we have
owned the property,this is the only inspection of the premises that has taken place. The results of that inspection
vary from the older inspection—continually re-dated—that accompany the record. Fourteen of the items that are
on the inspection accompanying the record are not included hi St. Cyr's inspection,and 4 items are related but
differ.
Inflict,these omissions and differences can readily be ascribed to the updates of the premises by work performed
since the original inspection was filed,which,,if we believe the record(not necessarily a prudent thing to do) was
written on June 30"',.1997
The second notice was mailed to the owner on October 20,2000 giving them until November 20,2000 to make
repairs.No repairs were made and the owner was assessed the 2" $340.00 inspection fee.
At this point in time, there was an inspection made,and a preliminary proposal on file with the Housing
Department,for rehabilitation. THIS WHOLE PROCESS SHOULD HAVE STOPPED. No inspection fees
should be assessed for two reasons:I)the property was known inside the planning department to be in rehab,
and,.2)no actual inspections were performed.
At the hearing on March 1,2001,there was no appearance by the owners.There were no signs of repairs but the
hearing was laid over until June 14`h,2001.
This is a spurious account by the(:HI;for sure. Lucy Gillespie of I.KRP called CHI about this hearing. He told
her she did not need to attend because he knew her, what we were doing. Ted St. Cyr,the inspector on the rehab
side, was involved in this matter by this time.
It's again peculiar that the CHI—who himself told Lucy Gillespie she did not need to appear—omitted this
important fact from the record.
Frankly, we are really wondering why it is that there are ANY hearings going on.
At the hearing of June 14`h,2001,there was no appearance by the owners.Two neighbors appeared at the hearing
complaining about the structure and that no repairs were being made.The structure was condemned as a nuisance to
the neighborhood.
It is true that we did not attend this hearing. The fact is,Bill Gillespie,just,forgot about it. The CHI said in a
phone cull that he "had neighbors complaining."I asked him if he referred any of them to us. We had been
speaking with a neighbor,and had modified our proposals on the property accordingly.
We're just guessing that it was NOT explained to the complaining neig/thorn that new owners were trying to get
the property rehabilitated under a City program,and that the Planning Department had delayed them for seven
months inadvertently(?)for no apparent reason.
The owners are currently working on a rental rehabilitation project with the City of Omaha under the name of
Genesis Rental Properties LLC at 1424 Martha Street.They entered into the agreement May of 2000.
The owners of this property—I'Y Kings Rental.Properties LLC—are separate and distinct from Genesis rental
Properties.
The original agreement had expired and two extensions have been given.Currently they are approximately 70-75%
complete with 1424 Martha Street.The current agreement expires October 1st,2001.
We do not agree that any agreements with the city "expired."We know that within the rehabilitation program,it
is anticipated that a project of the Martha property's magnitude can take 18 months.
Page 8 of 8 7/24/2001
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EMPLOYEE: GRACE MANTICH DOCUMENT TOTAL$ Inn._00
DEPOSIT
NUMBER • EXPLANATION AMOUNT
02212-1 Condemnation Appeal Bond for the property $300.00
located at 526 North 32nd Street, submitted
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Picture ID No. 2397
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Bid number 2085 Bid Comparison condition Council Case Current Pictfile conditio
Address 526 North 32 St
condition BID Archive
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Photo Date 9/16/2002
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