The Last Holdouts

The first thing that happened to this small, stalwart group is that it was not notified in summer 2004 by the property owner, NWJ Cos. of Philadelphia, that it was selling the St. Dennis. District law requires property owners to give tenants the right of first refusal to buy their building.

The second thing that happened was that the new owner, DBT Development of Washington, began offering tenants thousands of dollars to leave so the company could convert the building into condominiums.

DBT President David Tolson offered the Martinezes $30,000 and, eventually, $100,000, along with an apartment in a DBT-owned building in Columbia Heights at a comparable rent. They refused. By late January 2005, 20 families had left the St. Dennis, leaving the women behind in their third-floor apartment.

The story of the St. Dennis is not unlike that of other D.C. buildings in which landlords let rental properties deteriorate and force out or pay tenants to leave. What landlords did to get around the District's tenant-right-to-purchase law -- until the loophole was eliminated by the D.C. Council in 2006 -- was to sell less than 100 percent of their interest in a property.

Records show that Eric Kretschman, a principal in NWJ Cos., transferred 99 percent interest in the St. Dennis to Tolson and DBT Development in summer 2004 for $2.4 million. Kretschman had bought the building in 2002 for $1.2 million.

It wasn't until Tolson showed up, offering buyouts to tenants to leave and sign away their rights to return to the building, that the Martinezes realized they had a new landlord.

"We complained to everybody," Eva Aurora said, ticking off the D.C. Department of Consumer and Regulatory Affairs, local nonprofit housing groups and public officials. "They all knew what happened, and yet we couldn't get help."

Their refusal to move prompted Tolson to offer the building to the Martinezes in June 2005 for $5 million, "cash, as is," according to the contract -- a gesture by the landlord to comply with the tenant purchase law before gutting the building. A few days later, DBT gave the Martinezes a vacate notice and brought in demolition crews to work around their third-floor apartment. Still, the women refused to move.

Blake Biles, who along with other lawyers of the Arnold & Porter firm working pro bono with another low-income tenant association in Mount Pleasant, met the Martinezes in summer 2005. After hearing their story, he took them on as clients and that fall sued not only Tolson and DBT but also Kretschman and NWJ for violating the District's tenant purchase law.

"All of them failed to comply with the law. Kretschman sold it to Tolson and didn't offer it first to the tenants, and Tolson knew the tenants hadn't received a notice to buy," Biles said.

"We believed that we could show the [99 percent] transfer was a sham and that we'd be able to prove that to a jury that all the Kenyon Street tenants should have received an offer to sell," Biles said.

Tolson said that the "99-1 transaction" was legal under District law at the time and that his dealings with the tenants after he bought the building were proper. "They contested it, with representation," he said. "If they want to turn it into affordable housing, that's fine. There's always another project."