Council rejects settlement with apartment complex owner in substandard housing case

The plot thickened in an ongoing affordable housing saga as City Council Thursday denied a settlement in the city of Austin’s lawsuit against Orchard Plaza apartments owner Walter Olenick for substandard housing code violations.

Council Member Greg Casar, in whose district the complex is located, said on the dais that it simply was not a good enough deal for the city or for the neighborhood. He declined a request to comment further.

Bryce Bencivengo, a spokesperson for the city, also declined to comment due to the ongoing nature of the litigation. Olenick could not be reached for comment. Even as all parties keep mum on the matter, court documents reveal a glimpse into the unfolding legal drama.

The city first sued Olenick back in 2013 for multiple code violations involving buildings, foundations and stairways in disrepair at 1127 E. 52nd St. and 1205 E. 52nd St, but it was not until December that the 53rd District Court actually made an order compelling Olenick to bring the complex up to code in 90 days. Fines for the violations by that time had racked up to $800,000.

In that time, Olenick and his wife, Rae Nadler-Olenick, did not comply with the court order, but they did file multiple appeals challenging Travis County’s authority to command them to fix the substandard housing on their property. The Olenicks live on the property and charged tenants rent between $400 and $600.

Before they were found in contempt of the order, the Olenicks filed a motion for abatement, claiming that the properties were under contract with an interested buyer. Court docket notes on the case indicate that the buyer had offered to privately fund the relocation of some of the tenants. In April, Council approved $600,000 to help move tenants off the premises.

By a June 15 compliance hearing, all but four tenants had left and sale of the property was set to close by the end of July. However, by Aug. 1 the buyer had backed away because the burden of civil penalties remained on the title. With the deal off, the court renewed its order of contempt and set a new compliance hearing for Nov. 1.

In response, the Olenicks filed a motion to stay, characterizing the city’s actions in the document as “sheer, unmitigated, incessant harassment” with the underlying goal of compelling them to sell their property, which also functions as their homestead.

Moreover, the Olenicks accuse the city, specifically through the Building and Standards Commission (the body that actually issues the code violation fines), of clouding their title. They go on to say that they have filed suit against the city in an effort to clear the title for sale and that they demand $10,000 in sanctions for that lawsuit.

“While preventing the sale, due to non-payment of any pre-sale ‘commission,’ City still wants to hold The Olenicks in contempt for non-action for not fixing ‘problems’ that were never problems in the first place,” the document states.

In a hearing Oct. 12 in response to the motion to stay, the city responded that the Olenicks had continued to collect rent despite making no further repairs. State District Judge Karin Crump denied the motion to stay, and reinstated the Nov. 1 compliance hearing.

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