Minneapolis, landlord work on deal

  • Article by: RANDY FURST , Star Tribune
  • Updated: September 14, 2012 - 11:28 PM

Management of troubled properties would be reassigned, ending risk of eviction for 2,000 tenants.

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Spiros Zorbalas owns dozens of buildings and is one of the biggest landlords in Minneapolis.

Photo: Elizabeth Flores, Star Tribune

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As many as 2,000 tenants who faced eviction would stay in their Minneapolis apartments under a deal being negotiated between the city and one of its biggest and most-criticized landlords, a city official said Friday.

The city has been trying for more than a year to get Spiros Zorbalas out of the landlord business, after frequent complaints from tenants and numerous housing code violations at his buildings. Zorbalas has fought the city in court. Caught in the middle were his tenants, who would be forced to move if the city followed through on its revocation of Zorbalas' rental licenses.

"We're close to an agreement that would turn management of his apartment buildings over to someone other than himself," said Tom Deegan, the city's director of housing inspections.

Zorbalas confirmed that view on Friday: "We are working toward a very positive, amicable situation for all parties," he said. "I think everybody will be happy."

However, Council Member Gary Schiff, who has some of Zorbalas' apartment buildings in his ninth ward, said Friday he was not ready to celebrate.

"It's too preliminary," Schiff said. "We haven't been briefed on the negotiations and we may not like the terms." He said council members, who must approve the deal, will be briefed next week.

Zorbalas' 38 apartment buildings racked up 2,131 violations in the past five years, as of mid-June.

"The problem was that the tenants had many complaints and they were not addressed in a timely way," Deegan said.

The City Council revoked three of his rental licenses in 2011. Under city ordinance, those buildings can no longer be rented. Multiple revocations also mean that Zorbalas would lose the right to rent any property in Minneapolis, meaning all 740 units would suddenly be illegal to occupy.

Recognizing the potential problem of a mass eviction in a very tight rental market, the council put off any action while Zorbalas appealed the revocations. He lost at the Minnesota Court of Appeals, and the state Supreme Court declined in May to hear the case.

That set in motion the city's negotiations with Zorbalas' attorney to give up control of the buildings.

In the meantime, Zorbalas has filed an appeal with the U.S. Supreme Court, according to City Attorney Susan Segal. The city would oppose him, she said, in the unlikely possibility the high court agreed to hear the case.

Deegan declined to release details yet, so it is unclear whether Zorbalas will lose his rental licenses or give up ownership of the buildings, but he did say that he had confidence in the new company that would manage the property.

Five of Zorbalas' properties are in the Corcoran neighborhood, and Eric Gustafson, assistant director of the Corcoran Neighborhood Organization, has said Zorbalas is "the worst landlord I have ever seen."

Gustafson said Friday that he was hopeful Zorbalas would be required to give up ownership of the properties. "Without hearing all the details, I can't form a full opinion, but it sure sounds positive," he said.

Zorbalas, who lives in Florida, said he had a confidentiality agreement with the city not to discuss the negotiations or the court case. He said he rejected the label of slumlord. "I don't think that is true," he said. "It is unfortunate that people reach quick conclusions. We do have buildings that need attention, and we have attempted to do this as best we can."

Randy Furst • 612-673-4224

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