Rent Strikes and Lawsuits: A Reckoning for a Controversial Landlord
A rented U-Haul idled in one of the parking lots outside the complex. In another lot, two men loaded a mattress into a trailer behind a truck.
“This is the ultimate rent strike,” said one of the men securing the mattress in the trailer. He was helping Eli Findley, a tenant in his 30s, move out.
Findley moved into Southwest Crossing in March 2019, and even though he signed a year lease, he was leaving three months early. He wasn’t particularly worried about breaking the lease. The main office was staffed only sporadically, and in general the people running the place, whoever they were, didn’t seem to have their act together enough to enforce any penalties an early exit might incur.
Never in Findley’s nine months at the Crossing was it an ideal place to live. Maintenance was slow if it happened at all. Roaches were prevalent. For a while Findley’s air conditioner ran nonstop unless he shut it off at the breaker. Another resident had to control his unit’s water at the main — if he wanted water he had to run all his sinks and shower at once. But things really started going downhill in October, Findley said. Not coincidentally, it was around that time the administrative staff and maintenance workers stopped getting paid. When Findley went to the leasing office to pay his November rent, a maintenance worker told him not to bother. There was no one working in the office.
Since then, Findley said, people have been on his roof stealing air-conditioning units and copper wire. His apartment has had plumbing backups, and there’s no one to fix them. Elsewhere in the complex, a portion of a roof collapsed. While hearing gunshots isn’t exactly uncommon in the city, Findley has heard not only the bang of gunfire but also the clink of shell casings bouncing on his sidewalk. According to police records, in just the past month the apartment complex had seen two instances of breaking and entering, two assaults and a theft of a car, among other crimes.
As Findley put it, “It’s like when the teacher leaves the classroom. Kids start acting up. It’s the same thing here. When there’s not a management company to hold anybody responsible, everyone is acting out.”
Bobby Giammanco is one of the maintenance people who stopped working when TEH stopped paying. He lives with Lisa Jones in an apartment next to the leasing office. When I met him he was getting ready to barbecue on the narrow strip of concrete between his door and the sidewalk. Giammanco said he’s owed for 96 hours of work. Among other indignities, he and Jones have endured at least a half-dozen plumbing backups since they moved in to the Crossing a year ago. The bathtub and toilet have overflowed. They’ve had to jerry-rig a trash bag in a five-gallon bucket just to meet basic needs.
A number of the apartments here have been deemed unfit for human habitation, but that doesn’t mean they’re not being used. Jones is an early riser, and before the sun is up, she sees squatters leaving these condemned units and heading back towards the River Des Peres.
“I don’t have any bad feeling toward them,” she said of the squatters. “They need a place to crash. I get it.” She paused and pointed to the nearby industrial plant next door. The website for the plant describes it as a “global leader in industrial additives,” and Jones said some mornings its thick exhaust wafts toward these apartments. “This place is a shithole,” Jones added. “That’s all it is.”
The 328-unit Southwest Crossing complex has been reviewed by residents on Google 51 times. The average rating is 1.6 stars out of five. Google doesn’t allow a zero-star response. Michael McKinney’s write-up from May is pretty representative: “The 5-star reviews are from the management staff. They could have at least used fake names. This is the home of bedbugs, roaches, and bad customer service … But if you’re ever late on your rent, they have multiple plans of action. Welcome to Hell.”
Last year was a pretty bad year for a lot of folks living in TEH apartment complexes. It was seemingly a pretty bad year for the company itself, too. They had custody of at least two of their properties taken away by the courts. The St. Louis Post-Dispatch published more than twenty stories about them, most of them by reporter Jesse Bogan, none of them particularly flattering. Pulitzer-winning columnist Tony Messenger called them “rogue” landlords. The editorial board said they “write the book on slumlord management.” Also in 2019, TEH went to legal war with a tiny north-county municipality. Additionally, the Missouri Attorney General’s Office stepped in to resolve at least sixteen complaints tenants had with the company. Perhaps most impressively, TEH managed to draw bipartisan condemnation from both Republican Senator Josh Hawley and local socialist organizers.
TEH was founded in 2006 in Israel by Gilad Israeli and Eliram Rabin. According to the Israeli tech news website Calcalist, “Israeli worked as a lawyer for years before pivoting to real estate, while Rabin boasts years of experience in Israeli and American real estate.” According to the Calcalist article, the mayor of Jerusalem is an investor, as are a handful of other big wigs in Israeli higher education and politics. The firm also owns low-income housing in Tulsa, Kansas City and Pennsylvania.
In 2014, TEH Realty bought the Springwood apartments in Bel-Ridge (1.2 stars on Google) and a year later, about twenty miles south, the Southwest Crossings in Carondelet. The purchases were part of a larger buying spree that the company embarked on around St. Louis, eventually buying eleven other properties in the region, mostly in north county. Since 2015, the Post-Dispatch reported, the firm has collected more than $1.25 million in rental subsidies from the county.
After Ferguson police officer Darren Wilson killed Michael Brown in August 2014 near the Canfield Green apartment complex, Bogan and his colleagues at the newspaper started reporting more on life in subsidized housing, both in north county and around the region. The Northwinds and Park Ridge, both in Ferguson and both eventually bought by TEH, were of particular interest because about a decade ago they were refurbished in part with taxpayer money. Even as TEH became an increasingly important player in the subsidized housing market, eventually owning apartment complexes totaling nearly 2,400 units, the owners refused to talk to media.
“When owner Eliram Rabin finally did sit down for an interview [in 2019] he was gracious, but his comments rang hollow,” Bogan said. “Asked why TEH was buying more properties instead of investing in the ones it already owns, he acted surprised to hear of dismal living conditions.”
Rabin either lied to Bogan or had somehow missed the prolonged battle his company was fighting against Bel-Ridge, at the heart of which were a slew of violations issued in September 2017. That month Bel-Ridge’s building inspector Raymond Winston conducted an inspection of Springwood and cited TEH for everything from defective roofs and railings to cracked sidewalks to graffiti. Sixteen buildings in the complex were cited for issues related to roofing, thirteen for grading and drainage, seven for sidewalks and driveways. The list went on, and it would eventually lead to an all-out legal war between the company and the municipality.
The total population of Bel-Ridge is a little more than 2,500, meaning that the 270-unit Springwood, which according to court documents was 94 percent occupied at the time TEH bought it, encompassed a significant chunk of Bel-Ridge’s total residents.
Gradually the number of things Bel-Ridge found to be wrong with Springwood grew, and in August 2018, the city cited Springwood for more than 150 violations. In January 2019, an administrative search warrant was served on Springwood, and Winston conducted another inspection. This inspection found defective floor coverings, inoperative heating units, water leaking from heating units, broken windows, and holes in walls and ceilings. Additionally, Winston’s report states 30 families were allowed to move into units without first obtaining occupancy permits or inspections. There were signs that TEH wasn’t a totally absentee landlord, but even the work the company did at the complex was problematic. Winston found new electrical panels installed, new furnaces and new water heaters that had not been installed with proper permits and were therefore cause for violations. After this inspection, Bel-Ridge sent TEH a bill for about $34,000, a $170 charge for each of the 202 units Winston inspected.
Later, in a messy court case, TEH would point out that just a few weeks before that September 2017 inspection Bel-Ridge passed an ordinance raising the fee for an occupancy inspection to $170. A similar inspection fee in St. Louis city is $90.
To determine the fate of Springwood, Bel-Ridge held an administrative hearing that was also a public hearing as well as, oddly, a sort of trial at City Hall. The director of Bel-Ridge public works Cary Herndon presided as a quasi-judge. As Bogan reported, “an attorney representing the owner of the complex addressed Herndon as ‘your honor’ at times, and the attorneys questioned residents who spoke.” St. Louis County Councilwoman Hazel Erby, who was present, called the proceedings a joke. In a court filing, TEH complained that given Herndon was the city inspector, he was in essence both a judge and interested party.
Nonetheless, residents spoke about the condition of Springwood. One resident stated that for a nine-day period over Thanksgiving he was without running water. Another said that he had to resort to heating his apartment with his electric stove after the furnace stopped working. A home health care worker whose client lived at Springwood said her client’s window was broken and door would not lock. Current and former residents spoke of mold and bug infestations, appliances that went un-repaired despite frequent requests for fixes. The complaints went on. Afterward, Herndon concluded that Springwood was “a nuisance and detrimental to the health, safety and welfare of the residents” and ordered the complex “vacated and closed.”
TEH sued Bel-Ridge over what the company saw as its property being shut down through a kangaroo court. It claimed that the building inspector, Winston, often only made it aware of violations through informal “back on the envelope” ways, such as in emails sent from his iPad. TEH accused Winston of preferring to “maintain a specter of blight over [TEH’s] property in order to continue to extract payments.” TEH submitted an affidavit in which Abir Levy of Midwest New Construction swore that he went to Bel-Ridge City Hall and attempted to apply for occupancy permits for units but was told he could not do so. Midwest New Construction and TEH both have offices in Reading, Pennsylvania. In fact, both companies seem to work out of the same suite in the same building. Regardless, TEH and Bel-Ridge quickly reached a legal impasse. The municipality insisted due diligence had been followed. It denied Winston had issued violations in any improper manner. The city wouldn’t even concede that TEH owned the property that TEH said it did.
In September 2019, due to the volume of resident complaints, the Housing Authority of St. Louis County informed TEH it would no longer issue housing vouchers to properties it owned.
The case between TEH and Bel-Ridge was still unresolved in October when Fannie Mae, the government-sponsored mortgage loan company that secured the loan TEH used to buy Springwood, filed suit in St. Louis Circuit Court demanding that the property be put in receivership.
Receivership is a somewhat complicated legal and financial concept, but in essence it’s a mechanism that protects a lender’s investment. In this case, Fannie Mae feared TEH would never be able to pay back the money (plus interest) it had borrowed to buy Springwood. In accepting the loan secured by Fannie Mae, TEH agreed to a receivership clause, which allowed Fannie Mae to take control of the property from TEH and bring in another entity to run it. On November 1, management of the Springwood Apartments was handed over to San Diego-based Trigild, Inc. With that, TEH lost custody of and the ability to make money from Springwood.
TEH’s court case with Bel-Ridge is still technically ongoing, though it has largely been rendered moot. TEH switched counsel, and both their current and former lawyers declined to comment for this story on the record. In general TEH is pretty tricky to get ahold of. They have no central office. An email sent to one of the investors was not answered. In court filings, the listed address is always that of their counsel, and the employees at the complexes are usually as in the dark as the journalists asking them questions.
The seeds of last month’s rent strike at Southwest Crossing were being sewn as far back as March 2019. Around the same time TEH was crying foul over the $34,000 bill from Bel-Ridge, the decaying conditions at the Crossing came to the attention of Homes for All St. Louis. Homes for All describes itself as “a tenant organizing coalition made up of grassroots and non-profit organizations.”
Michael Shultz, who like everyone at Homes for All is a volunteer and who came to the organization through St. Louis Socialists, was one of the people who began knocking on doors at the Crossings, talking to whoever was home and trying to figure out how their complaints could be remedied. Shultz said when he first met residents the complaints he heard included “everything from a hole in the ceiling with water coming down to the mold that you can smell and taste when you walk in, bugs, cockroaches, rats, mice.”
Homes for All helped residents form a tenants association and encouraged them to report every instance of mold and other hazards to the city’s Citizens’ Service Bureau and to document those requests. Ultimately more than 70 such calls were made to the CSB in 2019.
“We’re telling the tenants, I know it sucks and you feel like you’re being ignored, [but] write down the call, when you made it, who you talked to, what you complained about and we’ll keep track of what it actually took to get a response,” Shultz said.
At some point, TEH became delinquent on payment to the city for trash service and to the power company for electricity to the common areas at Southwest Crossing. Those services only stayed online because the city began footing the bill.
Fall proved to be a chaotic and confusing season at Southwest Crossing. In October, maintenance workers like Giammanco as well as the entire office staff stopped getting paid. Tenants were more or less left to their own devices. When Giammanco and Jones’ plumbing backed up again, Giammanco was able to fix a broken auger that other workers had abandoned and use it to snake his pipes. With the office staff also off the job, there was no one to collect rent. Some residents still paid, and the checks piled up in a box in the leasing office until someone — it’s unclear who — eventually took them.
Amid this confusion, seemingly random individuals knocked on residents’ doors, claiming to be the new owners and asking for rent checks to be made out to them. Local TV news incorrectly reported that the building had been condemned. Shultz said this caused a panic among many of the residents who thought they would have to find new places to live.
On a Monday morning, four days after TEH lost the Springwood property, TEH co-founder Eliram Rabin showed up at the Crossing in Carondelet with a group of investors and was quickly confronted by unpaid employees. One man, Corey Thompson, said he’d been hired to clean mold out of the apartments but had never gotten paid. He pulled his motorcycle behind Rabin’s sedan, preventing Rabin from leaving. The police showed up. When Rabin did leave, Thompson gave chase on his bike in hopes that, as he told Bogan who was there covering the standoff, Rabin would “pull over and give me my money.”
I later asked Thompson if he ever got paid. He said he hadn’t but that he wasn’t worried about it: Karma would take care of it in the end.
“Was that the first time you ever chased someone on your motorcycle?” I asked.
“First time for a good reason,” he said.
TEH faced a reckoning at the end of 2019. Better-organized tenants, another fed-up municipality and even Senator Hawley converged on the company.
It began a week before Thanksgiving, when the north-county municipality Bridgeton took TEH to court over ordinance violations for failing to provide heat to residents at their Bridgeport Crossing Apartments. In court, in front of a real judge, TEH failed to show.
A few days later, Hawley visited the TEH-owned complex in Bridgeton to check on the living conditions there. News cameras in tow, he talked to residents who said they’d been living without heat and running water. After the visit, Hawley called for a federal investigation. The conservative senator later tweeted that what he saw at the Bridgeport Crossing Apartments was “deplorable” and that he’d urged the Department of Housing and Urban Development to take action.
In December, the tenants association at Southwest Crossing working with Homes for All declared a rent strike. Shultz said it’s important to keep in mind that many of the tenants taking part in the rent strike put their money in an escrow or in dated cashier’s checks as a sign of good faith that payment would go through once the owners resolved their issues. Jones gave her rent to a social worker at St. Patrick’s Center.
On December 6, Mayor Lyda Krewson’s office filed a petition in circuit court to have Southwest Crossing deemed a nuisance and force TEH “to take corrective action or order the property be sold.”
Four days after Krewson’s office filed its suit, Freddie Mac filed a lawsuit for Southwest Crossing to be put in a receivership. Not long after, the Sansone group took control of the Crossing.
My most recent visit to Southwest Crossing saw things looking up at the property. A pickup truck with the Sansone Group written on its door was parked out front. A few lots over was a Laundry Matters van. About ten construction workers were moving about the buildings, though neither they nor the staff in the office were eager to talk to a reporter.
Jones said that the new owners had been quick to begin repairs. In the first days of them being on site, they built a wheelchair ramp for her disabled neighbor and replaced his carpet, which had flooded long ago.
“They’ve been working their butts off,” she said, seeming optimistic.
But when we talked a week later she said she felt more and more like Sansone was “putting a dollar-store Band-Aid on a war wound.” The whole place was in such disrepair. Plumbing in particular continued to be a problem. She and Giammanco loaned their neighbor the auger to clear a clog, but the auger hit mud, implying a pipe had broken.
When Giammanco and Jones’ own plumbing backed up again, the office workers were nice enough to give them a key to a vacant apartment to use its running water. Jones says she appreciated this, but at night she has to walk across a hall where she knows people are squatting just to use the bathroom.
Jones, who has been a victim of domestic abuse, wants people to know that Southwest Crossing isn’t just a place where people come to eke out some sort of bare minimum, that she’s had to work hard to get to a place where she has an apartment, money for rent every month. “We’re people, too,” she said.
While going into receivership has quickly proved a benefit to residents at Southwest Crossing, it’s not clear if the same can be said of Springwood. In fact, the 2019 court battle between TEH and Bel-Ridge is discouragingly reminiscent of a 2011 court battle over the same complex. At the time, Gannon Properties owned and managed Springwood, and the company was at odds with PNC Bank, which had loaned it the money to buy the properties. In 2011, like in 2019, many of the units had fallen into disrepair, and the entire complex faced possible condemnation by Bel-Ridge. Coverage in the Post-Dispatch at the time was not as robust as in 2019, but the issues residents had with the property were largely the same: broken appliances, no heating or cooling, crime, an unresponsive property manager. Instead of blaming the city, though, Gannon blamed PNC for taking control of tenant rents, controlling “which vendor bills to pay” and not authorizing payments on sewage service. In the end, just as would happen eight years later, Springwood went into receivership and Brentwood-based MLP Investments took over.
In August 2011, Springwood was bought by Taterville, an LLC set up by St. Louis-based lawyer Michael P. Steeno. At the end of 2014, the apartments were sold to TEH.
Will the receivership managed by Trigild be any more successful than the receivership managed by MLP? An article in the Post-Dispatch a few days after management of Springwood was handed over to Trigild mentioned new locks on doors and an inspection of units. A message left for Trigild at their local office went unreturned.
A recent visit to Springwood on a Friday afternoon found the place to be a bit of a ghost town. In the complex’s various parking lots less than one in ten spots was occupied. A piece of paper taped to the front door of the leasing office instructed residents to mail their rent checks to Trigild at an address in San Diego. A man in the office who wasn’t particularly interested in talking did say that residents in fact still lived at Springwood but that no new tenants could be accepted at this time. On the leasing office desk, a sign stated that new residents must have an occupancy permit and their unit’s electricity service registered in their name. Emblazoned on the sign was the logo for TEH Management.
It’s difficult to know what TEH will do next, because it’s hard to know what their plan was to begin with. Maybe the firm took on too many properties too fast and the widespread problems have more to do with incompetence than malfeasance. Alternatively, perhaps the plan all along was to keep overhead costs as bare bones as possible while the company sucked as much rent money out of the region as they could until the whole operation collapsed.
The status of TEH’s other properties in the metro are unclear.
At least one other property seems to no longer be under TEH’s management — the key word being seems. A recent visit to Blue Fountain Apartments (1.1 stars on Google) in north city’s Baden neighborhood made it clear that no one who lives there is entirely sure who owns the complex. The property was quiet except for the hum of electric wires. The buildings looked unkempt though not in any sort of severe disarray. No one was in the leasing office and a sign taped to the front door began, “We understand that the last several months have been a difficult time within the community …” The note went on to say that a new, unnamed company had bought the complex. The new owners, the note said, would host a meet and greet December 1, which by the time I got there had been about a week ago.
Samuel Rodgers is a Blue Fountain tenant in his late thirties who has lived at the property for thirteen years. He says he is without hot water and a working furnace. Recently, a neighbor reported a carbon monoxide leak in the basement below Rodgers’ unit, and when firefighters arrived, they got no answer knocking on Rodgers’ door. Fearing he was passed out, firefighters were about to bust down his door when he returned home. He’s glad he got home in time, because he’s not sure when or if his door would have been repaired.
I also bumped into Ryan, a seven-year resident of Blue Fountain who didn’t want me to use her last name. She said she’s seen her share of shortcomings at the apartments. Flooded basements, broken furnaces, a woman who’s ceiling fell into her shower, another woman who every night has to shove her couch against her door because it won’t lock. The meet and greet set up by the new owners left Ryan with more questions than answers.
“I could have run that meeting,” Ryan told me. “He didn’t know anything. It was like somebody sent a maintenance man. We don’t know who bought it. We don’t know if someone is going to use it. We don’t know if they’re going to condemn it.”
She asked the man running the meeting if this was still TEH property.
“I don’t know,” he responded.
“Well then who sent you?” she asked him.
“I don’t know.”
Editor’s note: A previous version of this story misspelled Michael Shultz’s name. We regret the error.
Source: riverfronttimes.com
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