Virginia businessman Joseph M. Durso yearned to own an apartment building, and when he heard he could buy 66 almost new garden apartments in Southeast Washington for $55,000, he snapped them up.
That was the fall of 1979. Today, Durso, 49, is frantically looking for a way to unload the five buildings that make up the 15-year-old Cole Gardens apartments at 2800-08 Jasper Rd. SE. a little winding street between Suitland Parkway and Alabama Avenue. Durso owes the Potomac Electric Power Company $37,000 in unpaid bills. He also owes $47,567 to the Washington Gas Light Company, $38,120 in unpaid city real estate taxes, and at least $34,474 to the city government for repairing leaking roofs, replacing failed furnaces and installing new hot water tanks.
These are Durso's problems. His financial troubles, however, have become the troubles of his tenants, forcing them to keep up the buildings. They have gone on a rent strike, paying their rental fees into an escrow account instead of to Durso. And they've organized to try and buy the buildings, although they've been unable to come up with the needed money.
The stalemate at Cole Gardens is like others played out in Washington again and again in recent years: A landlord says he can't make a profit running his building and the tenants organize in fear they will be forced into an ever tightening housing market when the building closes or goes condominium -- and an acrimonious dispute ensues.
But what is different about this landlord/tenant skirmish is that it is polite compared to most, the tenants and the landlord agreeing that they are trapped by financial circumstance. But in the end, the result -- people fearful of losing their homes -- is the same.
The tenants at Cole Gardens are mostly working people. Some are married couples, but more are young women raising children alone. Many tenants work as bank tellers, nurses, nurses aides, carpet installers, truck drivers. Some families are on welfare; some elderly are on Social Security. A tenant association survey found that most tenants earn less than $10,000 a year.
"I know the rents are cheap," said Bessie Moore, a middle-aged school teacher at Turner Elementary School, whose rent is $199 a month, about an average for a Cole Gardens apartment. A heavyset woman with short, black hair, Moore has lived in Cole Gardens since it opened in 1966, and her second-floor apartment is much like the other: two bedrooms, dining area, separate kitchen, a living room with sliding glass doors that open onto a balcony, which she has filled with plants.
It is her home, and Bessie Moore is determined that Joseph Durso's money woes will not change that. As secretary of the Cole Gardens tenant association, she helped map the strategy to buy the buildings from Durso.She and other members set up teams to keep the buildings clean after Durso cut back on maintenance services. They transformed smelly, trash-filled storage rooms into tidy laundry rooms and another room into a bright yellow recreation room for children.
"I feel like I'm helping myself," said Lauretta Brown, 27, an eight-year Cole Gardens resident and one of five volunteer building captains. eThe captains oversee a team of other volunteers who clean the buildings daily. "We're helping each other because there is nobody else to do it."
Durso says however, that he can't sell his tenants his buildings. "I can't wait five to six months to see if the tenants can get the money," he said, "because the utilities are pushing me up against the wall."
"This stalemate is killing us," said James Milton Blue, a 38-year-old computer repairman and the tenant association president. "People are losing interest in the cleanup." Blue has lived in Cole Gardens with his wife and two children for four years, and his $32,000-a-year income makes him one of its highest paid residents. His apartment is just like Moore's except that it is in the basement and instead of a balcony, he looks out his living room window onto an asphalt parking lot.
In Tysons Corner, in a sixth-floor office commanding a panoramic view that stretches to Washington, Durso explained that he fears the electric company will attach his assets unless he pays delinquent bills quickly.
"I went to a deposition last week and they were asking me about my income taxes," said Durso, dressed in a dark blue suit and blue shirt that accented his silver and black hair. "They come after you personally.If you have any silverware in the house, they come after it."
Durso, who leases fully furnished offices to businesses, said he owns no other property. His plans for Cole Gardens ruptured, he said, when he failed to find a single bank or savings and loan to lend him $250,000 to $275,000 to fix up 20 vacant and vandalized apartments in the project. Rents from these apartments were needed to put the project in the black, he said.
The money lenders said that they give no loans for apartment buildings in Washington because of the city's rent control law and because Southeast Washington is particularly unattractive -- its many low-income renters yield small landlord incomes, Durso said.
He acknowledged that his own lack of finances and experience in managing property also contributed to the rejections.
Although the five beige brick buildings look worn and dingy, Cole Gardens was built only in the mid-1960s when the hillsides of the Anacostia River were awash with a garden apartment building boom.Cole Gardens sits on a hillside overlooking a woods to the east. In all other directions are more garden apartments, inhabited by more people like those in Cole Gardens.
Cole Gardens went through two owners who lost the apartments to foreclosure. After the second foreclosure. After the second foreclosure in 1979, Cole Gardens' tenants were offered the chance to buy the buildings, but most weren't interested, Blue recalled.
Durso borrowed $55,000 from a friend and became the new owner, although the buildings were already burdened with $28,000 in unpaid utility and tax bills and many units were vacant.
"If you pay the rent," Durso said he told the tenants, "I will fix up immediately and not put the money in my pocket."
Between September 1979 and December 1980, Durso's management company collected $97,781 in rents and spent $83,953 on the upkeep of the buildings. Durso said he could not account for the $13,828 difference, but said he has made no money on Cole Gardens.
When durso bought Cole Gardens, the utility companies agreed to a moratorium on the back bills. Durso painted some hallways and balconies, replaced rotten gutters and downspouts, and replaced broken glass in hallways windows. He also replaced kitchen floors, removed working stoves and bathroom fixtures from the vacant apartments and installed them in occupied units, and restored heat to about 20 tenants who were without it and therefore had stopped paying rent.
"I guess the reality of what he was into finally hit him," said Blue. By May the maintenance crews had vanished, although a janitor returned in August and performed some maintenance chores.
About this same time, the utility companies went to court, clamoring for their money, Durso said. The court took management of the building away from Durso, appointing a receiver to collect the rents and pay the utilities.
Durso said he tried to sell the buildings to the tenants as condominiums, but they said no, fearing the projected price of $26,000 per unit was too expensive. Instead, Blue said they want to buy the buildings and convert the project to a low-yield cooperative in which owners agree to forego most of the increase in the value of their apartments in return for government assistance.
In December, the tenants began a rent strike, charging that Durso was giving them no services. Durso countered that he was receiving no rent. The court-appointed receiver now has taken the tenants to court for nonpayment.
On Christmas Day, water pipes burst and flooded two apartments, leaving 12 families without heat and water, and the city housing department stepped in. 1
Blue praised housing official Thomas Butler for installing 11 new furnaces, two new hot water heaters and new water pipes, fixing numerous leaking pipes and replacing many faulty bathroom sinks and kitchen stoves. The cost: more than $15,000. The city has filed liens against Durso for payment, bringing his total debt on Cole Gardens to more than $150,000.
Through all of this, the enthusiasm of the tenants has been dulled because of Durso's refusal to sell, Blue said. Six of 40 tenant association members attended a meeting last week, and Blue said some tenants who do not belong to the association have stopped paying their rent into an escrow account.
Even Blue's patience is wearing thin. "In the beginning, he [Durso] was a guy who jumped out here in a big real estate deal and got burned when he could not get the money he neded," Blue said. "Now, I feel he's being totally unreasonable" for not offering to sell to the tenants.
Said Durso, "I need someone to come get me out of this impossible situation."