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Lawsuit against Texas owner of vacant, blighted houses settled

Texas real estate tycoon Scott Wizig agrees to invest or demolish more than 50 deteriorated Baltimore houses he purchased at tax sales

Above: Scott Wizig and his wife Inna honor civil rights pioneer Congressman John Lewis at their Houston mansion last year.

Six Baltimore community associations have settled a lawsuit against the owner of more than 50 vacant, dangerous and uninhabitable properties.

Companies controlled by Texas-based investor Scott Wizig had acquired the houses mostly at city tax sales, then “left them for dead” as he tried to flip them to homeowners and others.

The lawsuit charged that Wizig knowingly kept the properties in disrepair and paid fines to the city Housing Department for Code violations rather than fix the properties.

Among the unsafe and unsanitary conditions found at Wizig-controlled houses were missing roofs, crumbling walls, collapsing porches, broken windows and a proliferation of rodents, insects, debris, garbage, graffiti and overgrown vegetation.

Invest or Demolish

The most important provision in the settlement, according to Robin Jacobs, an attorney at the Community Law Center, is the requirement that Wizig “invest in rehabilitating some properties and in demolishing the properties that were beyond repair and endangering community residents.”

The entities obligated to invest or demolish under the agreement are nine Wizig-controlled companies that hold title to the properties – Baltimore Return Fund, Chesapeake Row Homes, Compound Yield Play, Harbor Pier Homes, Inbrook Homes, Maryland Liberty Homes, Nicky’s Row Homes, Port Homes and Wiz Homes.

This Wizig-owned vacant was sandwiched between two well-maintained houses on East 21st Street. Jeanine Jones, who lives across the street from the vacant, said it was a blight on the block. (Photo by Fern Shen, 2013)

This vacant at 714 East 21st Street, owned by Wizig’s Inbrook Homes LLC, was sandwiched between two well-maintained houses. Jeanine Jones, who lived across the street, said it pulled down the block. (Photo by Fern Shen, 2013)

Also party to the agreement are two entities contracted to manage the properties (SWE Homes, LP and SWE Homes GP, LLC).

Houston Philanthropist

Over the last two decades, Wizig has bought, financed and managed more than 1,000 properties in Texas, primarily single-family houses, under his two main entities, Scott Wizig Enterprises and SWE Homes.

He has marketed many of the properties under the motto of “Everyday Homes for Everyday People.”

Scott Wizig with Congressman Lewis in the living room of his Texas mansion on May 30, 2014. (Houston Style Magazine)

Scott Wizig poses with Congressman John Lewis in the living room of his Texas mansion at a May 30, 2014 reception for Lewis and Martin Luther King III. (Houston Style Magazine)

In Houston, he and his wife are known for their philanthropy and support of Jewish causes. Inna Wizig is a trustee of the city’s Holocaust Museum and the couple are actively engaged in the Emery/Weiner Center for Jewish Education.

Last year, they hosted a breakfast reception at their lavish Houston home honoring two civil rights icons – Georgia Congressman John Lewis and Martin Luther King III, who signed copies of his picture-book memoir about his father. The event attracted several prominent black politicians.
The lawsuit alleged:

• “Mr. Wizig, individually and through his LLC entities, has purchased approximately 140 vacant properties at tax foreclosure sales and, to date, has failed to remediate any of them.”

• “. . . knowingly disregarded the accumulation of debris, garbage, refuse, graffiti, weeds, overgrown vegetation and other offensive, dangerous, unhealthy and unsanitary matter on [its] properties throughout the City of Baltimore.”

• For example, at his property at 2901 Mosher Street: “The front porch roof appears ready to collapse, held up only by rotten wood. The roof of the property appears similarly defective and may be admitting rain. Weeds overgrow the front and backyard. Beams from a second-story porch jut out from the rear of the property.”

Bankruptcy Filing

The six community groups settling the case against Wizig are Coldstream-Homestead-Montebello Community Corporation, Alliance of Rosemont Community Organizations, Mount Clare Community Council, Carrollton Ridge Community Association, Operation ReachOut SouthWest and Greater Greenmount Community Association.

They are slated to receive an $85,000 payment as part of the settlement. They originally sued Wizig for $8 million.

Because the Wizig-related entities filed for Chapter 11 bankruptcy after the lawsuit was filed, the agreement had to be approved by the bankruptcy court, which took place earlier this week, according to the law center.

Kristine Dunkerton, executive director of the Law Center, said the case represents a new legal strategy in the fight against owners of abandoned properties in Baltimore.

“Putting the power of City Code enforcement into the hands of the communities impacted by the vacant properties is a new tool that is proving effective,” she said in a statement.

She said her group, joined by Venable LLP and the University of Maryland School of Law’s Community Development Clinic, “are committed to continue our work with our clients to ensure the defendants perform their obligations under the agreement.”

Joyce Smith, of Operation ReachOut SouthWest, added this warning to owners of other vacant houses: “We want you to know that you cannot continue to neglect your legal responsibilities as property owners.”

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