Austin council rejects settlement with troubled apartments

Austin City Council members last week rejected a proposed settlement with the owners of a long troubled Northeast Austin apartment complex, throwing an unexpected wrench in negotiations to sell the property to a private developer and close the lid on years of disputes with its owners.

But stay tuned for another attempt.

Walter Olenick and Rae Nadler-Olenick, owners of two apartment buildings on East 52nd Street just east of Interstate 35, have been battling Austin for five years over $800,000 in fines for conditions the city called dangerous and substandard.

In April, the council voted to provide $600,000 to help tenants of the buildings, who were moved under a judge’s order. The Olenicks were held in contempt for failing to make ordered repairs but staved off a possible jail sentence when they told the judge they had agreed to sell the property.

In April, they told a judge they would sell if they could work out a deal with the city on its lawsuit and the remaining fines. Danly Properties representative Jonathan Saad said investors with the group planned to buy and redevelop the site.

PREVIOUS: Troubled Northeast Austin apartment complex to be sold to developer

City attorneys Thursday presented council members with an agreement to settle the case for $150,000 of the approximately $800,000 in outstanding fines and a promise from developers to demolish all substandard buildings and construct new housing.

The council rejected the move 7-3, with only Jimmy Flannigan, Ora Houston and Ellen Troxclair in support and Ann Kitchen absent.

“I believe we should have a much better deal for the city on this case and a much better deal for the community,” said Council Member Greg Casar, whose district includes the property.

He would not clarify what he meant by a “better deal.” Mayor Steve Adler said via a spokesman this week that he agreed with Casar but also declined to say what he thinks the terms of the settlement should be.

Saad said he hopes to revisit negotiations in the next couple of weeks.

“Now it’s just a matter of going back to the council and explaining to them how we got at our numbers,” he said. “I guess we didn’t talk enough to the council members. We were just discussing it with staff. I don’t think the council had enough information.”

BACKGROUND: Austin may spend $600,000 to move tenants from crumbling complex

The Olenicks did not return phone calls Monday. They have previously declined interview requests. They filed a new lawsuit against the city last month, arguing that the city’s claims on their property title were keeping its sale from closing.

The city has liens against both buildings on the property, at 1127 E. 52nd Street and 1205 E. 52nd Street, which have a combined assessed value of $970,200, according to the Travis Central Appraisal District.

The city has doled out citations against the Olenicks for unrepaired fire damage, a deteriorating platform holding up a second-floor overhang, rotting walkway wood, crumbling staircase supports and other issues. Renters there paid $400 to $700 per month.

Saad said his group doesn’t have completed plans for what it would build on the site but owns property next door and considers the Olenick property — which totals a little less than an acre — a problem and an eyesore. He said he hopes council members will reconsider a settlement.

“It wipes out the problem and gives room for future development,” he said.

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