How public-private deals really get done in DC.

Doomed To Displacement

Inside the Congress Heights Metro development sham that left a crime-plagued neighborhood in decay

By Jeffrey Anderson

The last place Chico Hortonwanted to be on June 28, 2019, was the law offices of Arnold & Porter, answering questions under oath about his role in his client’s convoluted real estate transaction that had turned into a full-blown shit show. 

The lawyer, lobbyist, developer, political appointee and charter member of Mayor Muriel Bowser’s coterie had represented developer Geoffrey Griffis in the acquisition of a cluster of blighted apartment buildings at Congress Heights Metro Station; Griffis planned to demolish and redevelop the site into a “transformational” mixed-use project. 

The problem was that a Superior Court judge had already placed the properties under receivership, and the tenants had first rights to redevelop them under the Tenant Opportunity To Purchase Act (“TOPA”).

Despite a court order giving him a 60-day reprieve from having to undertake costly repairs so he could negotiate “exclusively” with his tenants to sell them the properties, Aubrey Carter Nowell of the real estate management company Sanford Capital had surreptitiously transferred them to a company formed by Griffis, in December 2017.

Horton knew about the court order, according to emails filed in court pleadings and reviewed by District Dig, when he facilitated an unusual transaction in which Griffis borrowed from the bank that held Nowell’s mortgage notes in order to assume his debt and acquire the properties by special warranty deed, as if he were a lender threatening to foreclose. 

So did executives at EagleBank, the community lender that had financed the transaction. 

As did a friend of Horton’s, fellow Bowser insider and EagleBank board member Ben Soto, the real estate attorney who did the closing.

Horton and Soto were so involved with the deal they even loaned Griffis $200,000 each to assume Nowell’s debt to EagleBank, according to emails, documents and sworn testimony filed in Superior Court.

In a May 2018 lawsuit against companies controlled by Griffis and Nowell, the tenants described these machinations as a “brazen scheme” to evade TOPA, and demanded the transfers be nullified. 

A Superior Court judge said it was “undisputed that avoiding TOPA was one of the defendants’ goals.” That by itself was not illegal or improper, the judge said, but taking all the facts into consideration, the tenants argued, Griffis and Nowell failed to qualify for an exemption they were claiming.

The tenants, eventually displaced from their homes due to uninhabitable conditions, have fought what some see as a blood war to enforce their rights. Until recently, they have been unable to partner with a developer to buy out Griffis and build new, affordable apartments that they can return to.

The dispute has exacted a toll on just about everyone involved. …

https://districtdig.com/2021/06/13/doomed-to-displacement/