Code Violations Plague Owner

Similar tensions, meanwhile, have troubled other NWJ buildings.

Until recently, District property owners found that they could avoid offering tenants the chance to buy their buildings by transferring a majority interest to new owners. In 2005, the D.C. Council tightened the law to limit that type of transfer.

Before the change, however, NWJ transferred 99 percent interest in a building on Kenyon Street NW to new owners, taking in $2.5 million. Tenants sued and worked out a deal with the new buyer to try to purchase the building, although the price was $3.4 million -- almost $1 million more than what the buyer had paid.

In March 2005, tenant Eva Martinez wrote to D.C. Council member Jim Graham (D-Ward 1), saying, "All the landlords of this building have violated our rights. . . . We have been living in deplorable conditions (no hot water and heat, shoddy repairs or anything at all, cracked and peeled ceilings and walls etc.) We didn't even know that the building was on sale."

At another building, on Newton Street NW, the company transferred interest in the property in 2004 to a developer for $1.1 million, double what NWJ had paid two years earlier. Again, tenants sued.

In a 2006 deposition, Kretschman said NWJ did not set out to avoid tenants but wanted to sell the building quickly and get a firm closing date. He also said he had kept units vacant because empty properties are often worth more in the city. New owners can then buy with the freedom to convert to condominiums without needing tenant approval.

"I think it's no secret in Washington that to have tenants vacate the buildings, you have to pay them large sums of money," Kretschman said in the deposition. "Clearly, the fewer tenants . . . the more valuable your building is." Kretschman added in an interview that tenants were not coerced to leave the building.

In the Newton Street case, tenants agreed to a $300,000 settlement and moved out.

At a third building, on Kalorama Road NW, tenants sued in 2002 after learning that NWJ had bought the property. Tenants eventually struck a deal to buy it from NWJ for $1.8 million. Tenant Barry Weise, now deputy legislative director for council member Graham, said that until tenants took over, building conditions were unbearable. DCRA had documented 250 violations.

"Under NWJ, maintenance went from bad to nonexistent," Weise said. "NWJ would buy buildings in the market here, do no maintenance and then turn them over to somebody else for a quick profit."

Kretschman said the company bought many buildings in deteriorated conditions and responded "regularly and promptly" to maintenance requests.

Three of NWJ's properties have not been sold: two complexes in Northeast and the complex on Ontario Road NW, where on a chilly January morning, doors and windows were unsecured and roaches scampered through apartments. The stairwells smelled of urine, and vagrants had left a crack pipe, empty wine bottle and feces on a crumbling landing.