At the Vista Del Rey apartment complex in Leon Valley earlier this month, a babbling brook of sewage water and clumps of used toilet paper rolled down the sidewalk between buildings, casting a nauseating smell across the area.
Code inspectors in the municipality of Leon Valley have for years appealed to the property’s revolving door of owners to make repairs in units and clean up the complex, where code violations have persisted over time. But every time the property sells — as it has twice in the last three years — that stack of citations disappears, forcing compliance officers to start again from scratch.
Earlier this month, officials with the City of Leon Valley voted to try a different tactic.
The city is suing the owners of the sprawling apartment complex to force repairs at the property. The lawsuit will remain attached to the property, officials said, even if it is sold. Its current owner, Shippy Properties, is trying to sell the troubled complex.
“The Vista Del Rey apartments are plagued with crime, deplorable living conditions, and numerous city code violations, which constitute a threat to human health and safety,” reads the lawsuit filed on Aug. 5 in Bexar County district court, alongside a request for a temporary restraining order.
The lawsuit continues, “The City has sought to address these issues for years by working with at least three different sets of owners, without success. These unsanitary, dangerous and illegal conditions not only still exist, but continue to worsen as the property ages and necessary repairs are not made.”
The suit asks the court to force the property owners to pay up to $1,000 per day the property remains in violation of city code.
In a prepared statement sent to the San Antonio Report, Shippy Properties said it has “invested over $1.5 million for renovations to the property resulting in significantly improved living conditions for our residents.” The statement went on to say the company will “continue to work with the city with the ultimate objective of providing a safe and enjoyable living experience for our residents.”
As of the first week of August, not one of the complex’s 54 apartment buildings were up to code, said Leon Valley City Manager Crystal Caldera. The 453-unit complex, the largest in the city, has not had a valid certificate of occupancy for years.
The violations alleged in the suit include, among others, a failure to ensure every unit has hot water, unsafe stairs, trash on the property and failure to obtain a valid certificate of occupancy. Most of the needed repairs focus on the exterior, Caldera said, as permit inspectors have not yet had a chance to examine interiors.
On Aug. 6, Leon Valley City Councilman Jed Hefner spoke with several tenants in their units. Among them was Abigail Ceniceroz , who said she has struggled to get management to address mold in her unit. The dishwasher reeks with standing water draining from the sink, and water pours from holes in the ceiling of her bathroom. She worries about her son, who she said is terminally ill and on dialysis.
Hefner asked her where she would go if the building were declared unsafe. “I don’t know,” she said. “My son needs somewhere to live.”
They’re planning to move to Austin in six months with Ceniceroz’s partner, but until then, she says their options are limited because they are on a fixed income.
Shippy Properties expanded the fastest in the San Antonio area in 2021, according to real estate data from CoStar.
Its purchase of the Vista Del Rey complex in April last year pushed its apartment portfolio over the $1 billion mark, its website said, noting that the complex had been recently renovated with “modern finishes, wood-inspired flooring, generous storage spaces, fully equipped kitchens with black appliances, new cabinet hardware and gooseneck faucets, creating the ideal space for residents to relaxing [sic] and entertain.”
Any citations or court fees connected to Vista Del Rey that Shippy Properties pays for will not be drawn from the rest of its $1 billion portfolio. The complex, like most rental properties bought today, is owned under its own individual limited liability corporation — a corporate form that fences in financial liability.
A San Antonio Report story on the complex in January revealed that the property’s landlord, David Shippy, had written a book describing the apartments he owns as “cash machines” and its working-class tenants as a “captive audience.”
Shippy did not respond to an email requesting comment Thursday.
In May, tenants at the complex organized and submitted a petition to property management demanding repairs, as well as better communication and transparency. The petition described frequent and prolonged water outages, a lack of hot water, broken air conditioning equipment and inadequate safety measures that could keep the complex’s violent crime in check.
Caldera said the tenants’ persistent and vocal presence at Leon Valley City Council meetings motivated the city to focus resources on the Vista Del Rey complex, even as it is also dealing with compliance issues at other properties.
A similar situation is playing out in Northwest San Antonio at the Seven Oaks apartment complex, where tenants organized to decry conditions, prompting officials to seek action. In that case, some San Antonio City Council members are now discussing reforms to the city’s code enforcement.
The challenges of code enforcement
Across the San Antonio area, rising rents and the growing number of tenants have turned apartments, particularly older apartments, into a hot commodity among investors. Roughly 1 in 7 apartment units traded ownership last year, as the pace of transactions sped up.
Leon Valley’s escalation against code violations at Vista Del Rey highlights a challenge that cities face in enforcing ordinances when apartments trade hands so frequently.
According to the lawsuit, conditions at the Vista Del Rey complex have worsened since 2017, when local police began to receive an influx of calls reporting violent crimes. Beginning in 2020, code enforcers saw an increase in calls reporting water leaks from electrical fixtures, aggressive dogs and unsafe staircases. In April 2022 alone, code enforcers investigated 20 complaints about units that had no access to hot water.
The citations resulting from these calls appears to be a headache for the complex’s owners. A recent lease from the complex, shared with the San Antonio Report, includes new language in all capital letters: “DO NOT CALL CODE ENFORCEMENT FOR REGULAR OR EMERGENCY WORK ORDERS.”
Even as code citations and police reports have mounted over the last five years, the property has sold twice in the same period for higher prices, according to data from Yardi Matrix. The property sold in 2019 for $38.33 million and again in 2021 for $46.2 million, when Shippy Properties bought it from another Austin-based company named GVA.
Each time a property sells, any enforcement actions attached to it are effectively cleared, said Leon Valley officials, and any progress made bringing a property into compliance starts over. Adding to the confusion, recent turnover in the property’s management staff means that citations are now being lost in the chaos.
Then when the property does sell to a new owner, the city often doesn’t find out until much later, said Leon Valley Fire Department Chief Michael Naughton. His department will sometimes learn about a sale when it does new fire inspections. “I can’t tell you a mechanism in place that tells me that a building — or that apartment complex or strip center — sold, other than it gets renamed and gets a new paint job.”
The municipality of Leon Valley is 3½ square miles, and its total budget for the last fiscal year was slightly more than $12 million. The Vista Del Rey apartments are its second-highest source of property tax revenue, Bexar County tax records show.
Shippy Properties is trying to sell the complex again, say city officials, an investor and a former leasing agent.
A number of prospective buyers reportedly have toured the property, including at least one in July when the group was given a personal tour by David Shippy.
A local real estate investor, speaking on the condition of anonymity, said Shippy Properties was originally asking for $55 million to $60 million, but in the last few months that price has dropped, but not below the price the company originally paid.