Housing Complex

Kennedy Warrin’

A misleading calm. (Darrow Montgomery)

The District’s biggest, nastiest, longest-running rent control battle isn’t in a low-income apartment complex, or even a run-of-the-mill building in some gentrifying neighborhood. It’s in a historic art deco tower tucked into the side of the National Zoo, long viewed as one of Washington’s finest addresses—and the fight is finally stumbling toward a close.

For years at the Kennedy-Warren, a handful of holdouts have staged a rent strike, filed lawsuits, and appealed to every relevant authority to prevent longtime landlord B.F. Saul from doing what they thought it planned to do: renovate the old units with cookie-cutter modern luxuries, and then knock as many as possible out of rent control.

Saul’s position: The protests are coming from a small group of comfortable tenants who are just stalling for concessions, and don’t know a good deal when they see one. “A couple of them will find fault with heaven,” says Tom McCormick, the landlord’s chief financial officer and point person for all things Kennedy-Warren.

By now, McCormick has negotiated settlements with all but a few of the most stubborn tenants. In the interim, most of the rest have moved out; only about 60 of the 316 units are still occupied. The empty, renovated apartments began leasing this week, and construction will finish up in the next two months.

Despite the high attrition rate and the reams of paper expended on legal filings, in a few important regards, the holdouts have won: The units retain much of their historic feel, from the original decorative doorknockers to the restored blue-and-white tile bathroom floors. And lucky new tenants will still pay less than what the same unit would have cost if it had been rebuilt. But the cost of that quasi-victory was secret deals and endless delays, cracking apart the harmony that used to exist among those who call the place their home.

“There was all this flag-waving about ‘tenants of the world unite,’” says a tenant who asked to remain anonymous on account of ongoing legal proceedings. “That was all bullshit, because most of them have settled… B.F. Saul just divided and conquered.”

To understand why tenants dug themselves in so deeply, you need to get the Kennedy-Warren mindset. Despite the trappings of faded elegance, this wasn’t a playground for the super-rich. It was a place where highly educated, reasonably well-off professionals who didn’t want to buy real estate could live in dignified surroundings—if they appreciated its historic idiosyncrasies.

“You have to be the sort of person who’s willing to live in Washington without central air,” says Christine Burkhardt, a research librarian for a federal agency who’s been living there since 1994. “They’re more bohemian, I guess.”

More bohemian than residents of the new wing, at least. In 2003, B.F. Saul finished a long-planned addition that was identical from the outside, but with much larger, cushier suites on the inside. Rents range upwards of $8,000 a month for the biggest apartments. Strolling through the wing’s common areas, where management had put on an Easter celebration for the well-coiffed tenants and their pastel-clad young children, Burkhardt and I seem distinctly out of place. “I consider myself the working poor,” Burkhardt explains (not entirely convincingly, given her white-collar federal job).

Originally, B.F. Saul’s plans were much grander: A wholesale remodel with altered floorplans and modern furnishings. To pay for it, they asked tenants for a $233 increase on all the units, on top of the annual increase of about 2 percent per year landlords are permitted under rent control rules, and in addition to a $179 rent hike to pay for replacing all the windows. The tenant association, which had supported building the new south wing in 1997 under the condition that the building be improved at no cost to tenants, staged a rent strike.

To end it, B.F. Saul came back with another proposal: They would keep rents the same for all current occupants, as long as they allowed future tenants to be charged market rates. The landlord would even pay lump sums of over $50,000 for tenants to leave the building (it was already more than two-thirds empty, since management hadn’t re-leased apartments that tenants moved out of since 2006). Seventy percent of the tenants would have to agree—but those who disagreed and stayed anyway would also be subject to rent increases.

All but 12, or 87 percent, of the tenants signed off; it was, after all, a pretty good deal. But in March 2008, the District’s then-rent administrator Grayce Wiggins vetoed the agreement, saying it was “patently coercive” and would undermine the purposes of rent control. Almost immediately, she was fired, under circumstances that a subsequent D.C. Council investigation failed to explain (tenant activists, of course, are pretty sure B.F. Saul had something to do with it).

After that, the combination of the recession and the inability to recover much higher rents down the road prompted B.F. Saul to scale back plans for the building, from a $40 million remodel to a $30 million replacement of mechanical, electrical, and plumbing systems, as well as new appliances. But they would still need to move people around. In July 2009, the landlord requested permission to temporarily relocate tenants to work on their apartments.

The new, acting rent administrator gave the OK in February 2010, and B.F. Saul—which had already begun work in unoccupied units—immediately issued 120-day notices to vacate the apartments where they needed to go next. According to the original phased schedule, some tenants wouldn’t have to move until this summer. But some volunteered to move sooner—perhaps because having construction noise all around you is a powerful motivating force—so Saul tried to accelerate things. Even before that, a handful of tenants had filed a class-action lawsuit to stop the process, and soon a hail of tenant petitions, eviction notices, temporary restraining orders, injunctions, appeals, and motions filled the air above the old building.

“When the construction was well underway in this first zone, that’s when the tenants who were on top of this really began saying well, everything is going to be a fait accompli very quickly here,” says Marc David Block, a five-year resident who has three actions pending before various judicial bodies. “It’s like what they say with regard to the West Bank—‘events on the ground.’”

Hyperbolic metaphors aside, the tenants did win some victories. Blake Nelson, a lawyer drafting document after document on his own behalf, argued that his family would suffer “irreparable harm” if they had to move before the schedule allowed. He got the city’s Office of Administrative Hearings to invalidate one of the notices to vacate, and is still fighting to move at his originally scheduled date, staying through the winter even as his heat was turned off last October to allow renovations to happen elsewhere.

But most people left, taking an offer of four months’ worth of free rent to avoid constant jackhammering, drilling, and sawing. After extensive negotiations, Block took a 9th floor apartment. So did Burkhardt, who recalls a drill actually coming through the wall before she left her old place. “I feel like a Katrina victim,” she says, sitting in a spacious, 6th floor unit, filled with handsome wooden furniture and houseplants. “I got a trailer.”

Despite complaints about disruptive construction (lead contamination*, pervasive dust, a water main break), and retaliation for resistance (legal action for a few days’ lateness on rent), the biggest source of rancor is simply B.F. Saul’s attitude. For example, tenants recall a meeting where McCormick explained that he expected the rent administrator to rubber stamp a voluntary agreement signed by more than 70 percent of residents.

“Frankly, within D.C., this is a building in a nicer area, with a population that’s relatively more affluent, the rent administrator says ‘Connecticut Avenue? Kennedy-Warren?’” McCormick made a sharp stamping motion on the table. “Tell me about a real problem in the city.”

Later, in response to tenants’ threats to hold the process up in the courts, McCormick expressed confidence that he and his lawyer—Richard Luchs, generally considered the most aggressive rent-control attorney in the city—would have no problem nudging the bureaucracy their way.

“I think the city administration, with whom we have lots of dealings—I’ll leave it at that—will be sympathetic to moving this along,” McCormick said, in footage posted to YouTube. “D.C. bureaucracies move faster in some instances than others, and I think I can make this one move fast.”

But there were some tenants—at least a silent minority—who were happy to pass on costs to future tenants if necessary, and who didn’t want to take part in a rebellion mostly aimed at fighting inconveniences. One of them, who also asked to remain anonymous, imagines how a representative of the Department of Consumer and Regulatory Affairs must have felt listening to people who complained that B.F. Saul was going to bring the building up to code at no cost to them.

“It was such a total mismatch between the tenants and the D.C. person, who spends his entire life dealing with landlords who won’t do repairs in Anacostia,” the tenant speculates. “He was exasperated with tenants who are upset with the repairs the landlord is doing.”

B.F. Saul, meanwhile, has mostly left the battle behind to focus on getting the historic wing leased up. Touring the building, McCormick and Saul’s vice president of building management Tanya Marhefka point out each of the building’s painstakingly preserved details—from the original sinks to latches on kitchen cabinets. Some didn’t even have washers and dryers, at the tenants’ insistence; McCormick can’t help but point out everything they insisted on keeping.

“There were a handful of tenants who insisted on not changing anything,” he says, as we walk through. “They absolutely didn’t want a modern feel, no matter what.”

After increases allowed after vacancies, the empty rent-controlled units aren’t cheap—one 998-square-foot one-bedroom (they’re all at different rates, according to rent increases allowed by rent control) was going for $3,181 per month, and a 549-square-foot studio at $1,693.

But some of those who stuck it out are still paying less than $2 a square foot—which, for a room in the Old Lady of the Avenue, is probably the best deal in the city.

“Yeah, God bless ‘em,” McCormick says, shrugging.

* Updated to reflect the fact that lead was indeed found in old paint. According to the District Department of the Environment, which dispatched inspectors at least 35 times in response to tenant complaints, "management and their contractors worked quickly to address DDOE’s Notice of Violation and took subsequent corrective actions."

 

B.F. Saul's Tanya Marhefka and Tom McCormick tour through revamped apartments. (Darrow Montgomery)

Comments

  1. #1

    It is sortof cool that some historic detail is being preserved.

    But comparing this to the West Bank? Really?

    Rent control was supposed to help people struggling to make ends meet (although study after study have shown that rent control actually decreases the amount of affordable housing in a city, as landlords take every chance to condo their buildings as reduced rent isn't really worth the hassle for many).

    It wasn't supposed to be a bargaining chip to make your landlord retain the bathroom tile that you like.

  2. #2

    I do have to wonder how Mr. "West Bank" would feel about having his income artificially capped, but with no decrease in his work load. Should we ask if he'd be cool with that?

  3. #3

    Great story on how rent control can be abused to astoundingly great lengths.

  4. #4

    That woman who compared her situation to a FEMA trailer really deserves to live in one.

  5. H Street Landlord
    #5

    Agreed, that's very disrespectful Stephen. What was she thinking with that statement? FEMA trailers are terrible, but even then most of DC wasn't destroyed. New Orleans was ...

    New Orleans is doing great now though.

  6. #6

    Does FEMA provide 1700 square foot trailers with gleaming hardwood floors, 9 foot ceilings, original 1930’s cabinetry and “modern” conveniences such as a dishwasher, washer/dryer and central air available two blocks from the metro? Our friends at City Paper forget to mention the 60 foot indoor lap pool, health club, 24 hour desk, doorman, and piano bar.

    If you want to see more, go to http://www.kennedywarren.com.

  7. #7

    Two uphill, extremely long blocks.

  8. #8

    It is situations like this that make me afraid for humanity as a whole. For more than a decade you've had people with significant means (a mid 30's white collar person making 6 figures isn't working poor!) using a rule they shouldn't even be entitiled to due to their income to cost a private business millions of dollars in lost time, lawsuits and "concessions" so they can keep their heavily subsidized "bohemian" lifestyle.

    These people actually fight, first class unit renovations because the post cost would be 200 a mont more? Fine, move out then. Even with that extra 200 a month, these people are still paying 35% undermarket.

    This building has pools, workout facilites that are more usially found in a Ritz Carlton.

    Why the DC government even placates these people by listening to their whining for a decade galls me.

  9. #9

    Hillman,

    Let's get something straight about this misleading article...

    The first sentence creates the illusion that the fundamental issue at hand at the Kennedy-Warren concerns rent control. That is simply not the case. To put a fine point on this, B.F. Saul’s Thomas McCormick (quoted in the article) is on record before and during the renovation, stating the Kennedy-Warren would remain a rent controlled building after renovation, both for those living in the building before renovation commenced and for those who moved in after renovation was completed. Furthermore, at the time this article was written, all tenants living in the building were entitled to live in a rent controlled building after renovation, as per DC housing law. Rent control was a non-issue.

    The central issue is threefold:

    1) B.F. Saul's blatant disregard of DC government laws, rules, and regulations in carrying out its major renovation project, and the extremely negative impact this disregard has had on Kennedy-Warren tenants.
    2) The inability (or unwillingness) of DC government entities to enforce either their own dictates, or the dictates of other parts of the DC government as they relate to the actions of B.F. Saul. Repeatedly, Saul flaunted administrative rulings and court orders and nothing was done by way of enforcement.
    3) The implications of the following quote from the article: “…McCormick expressed confidence that he and his lawyer—Richard Luchs…would have no problem nudging the bureaucracy their way.” This was no idle, arrogant, offhand remark. The insidious fact is that McCormick was correct!

    The article correctly states that the Rent Administrator gave approval for B.F.Saul’s demolition/construction/renovation project in February 2010. What the article does not state is Saul actually began work at the Kennedy-Warren in March 2009 – eleven months before receiving mandatory DC government approval and four months before submitting the required construction plan to the Rent Administrator. As a result, the Rent Administrator was not informed of how the project was to be carried out at the time it commenced.

    The article fails to mention that the Rent Administrator's February 2010 approval contained stipulations regarding Saul’s activities regarding the project – stipulations that Saul subsequently ignored. The article also fails to mention that after receiving approval to commence a project it had already begun, Saul continued to ignore subsequent Orders by the Rent Administrator and decisions by judges at DC's Office of Administrative Hearings regarding Saul’s improper project activities. Some of these specifically concerned Saul’s failure to abide by the construction plan Saul filed with the Rent Administrator. For example, after establishing a timetable (approved by the Rent Administrator) indicating when tenants would have to leave their apartments, Saul unilaterally developed a new timetable (without necessary Rent Administrator approval) and demanded tenants move out as much as nine months earlier than originally stated.

    In none of these cases, was anything done by DC authorities to enforce the decisions of either the Rent Administrator or the Office of Administrative Hearings.

    The adverse results of Saul's continued flaunting of legally required actions are too numerous to mention, but here's one that both underscores why tenants were so angry and provides insight into what the article terms, "B.F. Saul's attitude."

    When Saul commenced demolition in March 2009 (11 months before receiving government approval for the project), it began by tearing down eight walls on eight floors in preparation for turning two apartments on each of these floors into one apartment. As owner/managers of the Kennedy-Warren since the early 1930s, Saul knew all these walls were covered by layer upon layer of lead-based paint. None-the-less, prior to the March 2009 demolition, Saul failed to apply for or receive the legally required "Lead Permit" to conduct such demolition. Saul also failed to provide any mitigating equipment or activities designed to contain the spread of lead-laden dust throughout the building. Not even plastic sheeting was used to cordon off the demolition being conducted on the eight floors. As a result, dust spewed into common areas and individual apartments at the Kennedy-Warren in what amounted to a willful (if not criminal) disregard for the health of tenants. (FYI... Tenants were not even notified the demolition was to take place.)

    Shortly after this demolition commenced, tenants began complaining about respiratory problems. After a few months had passed, tenants disgusted by the situation and Saul’s lack of adequate response to it, filed a complaint with the District Department of the Environment. It was only at that point, as Ms. DePillis' footnote states, the DDOE, "...dispatched inspectors at least 35 times in response to tenant complaints, 'management and their contractors worked quickly to address DDOE’s Notice of Violation and took subsequent corrective actions.'" What isn’t stated in the footnote is DDOE's own testing showed illegal and harmful levels of lead contamination in the Kennedy-Warren.

    To recap this single episode…

    1) Despite prior knowledge of the existence of lead paint on hundreds of square feet of walls to be demolished, B.F.Saul neither applied for nor received a Lead Permit authorizing them to conduct the demolition. Had this been done, DDOE would have had prior knowledge of Saul’s construction plans, would have been able to provide oversight, and lead contamination in the Kennedy-Warren would likely have been avoided.
    2) Despite prior knowledge of the lead paint situation, B.F. Saul provided absolutely no mitigation measures that would have protected the health of tenants. (Mitigation measures were only instituted after DDOE became involved. Under the circumstances, DDOE action against Saul amounted to a light slap on the wrist. After all, as Thomas McCormack stated, “he and his lawyer—Richard Luchs…would have no problem nudging the bureaucracy their way.”)
    3) Because Saul had not submitted its construction plan to the Rent Administrator at the time it commenced demolition in March 2009, and had not received approval for its activities, the DC government was officially in the dark about Saul’s harmful activities.
    4) Even after tenants’ brought the lead-pollution situation to Saul’s attention, no mitigation actions were taken by Saul until tenants’ officially filed complaints to DDOE.

    This is but one, unsavory episode of many that were to occur over the next two years.

    Informed by this historical background, let’s return to Hillman’s incredulity concerning my comment, “It’s like what they say with regard to the West Bank—‘events on the ground.’”

    I was not making any direct comparison between events in the West Bank and events at the Kennedy-Warren. That would be patently absurd – and I am not patently absurd. Contrary to the next sentence in the article, I was not making a “hyperbolic metaphor.”

    The reason I mentioned the “West Bank,” was to provide some context to the operative phrase in the sentence, “events on the ground.” The use of the term “events on the ground” is directly associated with Israel’s strategy vis-à-vis the West Bank and it is in this context that the phrase gained the meaning it now has. The specific reference is to Israeli settlement activities in the occupied West Bank – activities that are recognized as violations of international law (including the Geneva Accords) by a predominance of legal experts in the field. The import is that these (apparently) illegal activities are not being stopped, yet they create unalterable and negative conditions for the entity at the receiving end of the illegal activities (the Palestinians).

    It is from this Israeli-Palestinian situation that the current, common meaning of “events on the ground” is derived.

    And what is the essence of this meaning?

    1) A powerful entity disregards legally accepted precepts in order to serve its own self interests.
    2) Legally constituted bodies declare the entity’s actions as abrogating legally accepted precepts.
    3) The entity is not compelled to stop its abrogation of legally accepted precepts, and there are no adverse consequences for the entity.
    4) The actions of the entity, which abrogate accepted precepts, create unalterable and negative consequences for others with less power.

    Let’s see if the meaning of “events on the ground” fit the situation at the Kennedy-Warren.

    1) B.F. Saul, a powerful entity, ignores various DC laws, rules, and regulations in order to serve its self-interests.
    2 DC government entities specifically direct B.F. Saul to do or not to do certain things, as per laws, rules, and/or regulations. Saul ignores these.
    3) Despite ignoring the promulgations of legally constituted DC government bodies, no actions are taken to enforce the promulgations. B.F. Saul continues activities defying legally constituted authorities.
    4) The continuing B.F. Saul actions, defying legally constituted authorities, create unalterable and negative consequences for others (tenants) with less power including (but not limited to):
    a) Willfully exposing tenants to illegal levels of air-borne lead.
    b) Exposing tenants to asbestos.
    c) Removal of tenants from homes in an illegal manner.
    d) Subjection of tenants to noise levels in excess of 100 decibels.
    e) Strong-arming tenants to sign agreements not in their best interests.

    If the shoe fits, wear it!

    The bottom line regarding the renovation of the Kennedy-Warren is this…

    B.F. Saul created negative, inalterable “events on the ground” at the Kennedy-Warren by taking pre-emptive, unauthorized actions, by disregarding constituted authority, and by exercising a (self-claimed and nefariously assumed) ability to “nudge the bureaucracy their way.” This constellation of activities made a mockery of the rule of law in this city.

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