THE ROWHOUSES were 5 dilapidated townhouses, actually just shells. The city wanted to jump-start fixing that neighborhood, so they asked us to renovate those buildings. Running the numbers showed that we couldn’t afford to just do the five townhouses, but if we added 10 new units on the lot, it would work. But we were warned we’d have to work with X, the local building inspector, on this job. We hired an architect, kissed ass, and got the building permit. But X still had it in for us.
Work moved along, and we were days away from occupancy. Nothing new had been done in this neighborhood for about 50 years, so there was a lot of buzz. By our projected opening date, we were fully rented and tenants were waiting to move in. We were all just waiting for our Certificate of Occupancy. All through construction X had remained relatively sane, so we expected our final walk-through to be nitpicky, but doable. Well, being the insecure jerk that he was, X said he had to call in backup, another inspector from the state. While X was nitpicking his way through the punchlist items, the state inspector took a quick look around, and announced that we had bigger problems: we didn’t have a firewall dividing the 10 new units. By code, a firewall has to separate every 8 units. There was a design change during construction on the new building that caused this problem, and the architect hadn’t picked it up. Neither had X, despite his many preening walk-throughs. His incompetence helps explains his inertia.
At certain times in my life, when something momentously bad is about to happen, I get this strange feeling. Everything sounds like I’m under water, my stomach drops to my knees, and I have to use the bathroom. That’s how I know something is really bad. And it happened with that announcement. In one fortuitous fell swoop, X was about to get revenge for his years of pent-up anger and frustration.
He loudly announced that nobody could move in until this issue was resolved. Not in the original building, not in the new one. He wouldn’t issue a C.O. for any unit until we applied to the state for a variance from the building code. With pressure from the mayor’s office, a few weeks later he relented somewhat and allowed us to rent the front building. He also permitted occupancy of 8 of the 10 new units. But just in case we were liars, we also had to not only guarantee that we wouldn’t occupy those two, but sheetrock over the windows in two brand-new apartments, to make sure they were uninhabitable. We begged him not to make us ruin perfectly good apartments. We offered to give him the keys to those units, to check as he saw fit, but, no. Sheetrocked it was.
Meantime, in a small town, news travels fast. The buzz that helped us rent the apartments now worked against us. Word got out that our apartments were “unsafe”, and people asked for their deposits back. Every time we had a prospective tenant, we first had to go through the litany of the building being perfectly safe.
The state variance process usually took six months to wade through. Throughout this whole process we would need to make payments on the maxed-out construction loan, with insufficient income to offset it. We begged and cajoled the state to hurry our application through. They moved as fast as government can, and it only took about 3 months for them to issue a variance. Among the things the state required in a trade-off was a fire alarm system which rang in every apartment.
The required locations and high sensitivity of the system caused its own problems. Every time a tenant made popcorn or took a steamy shower, the whole building’s alarm system went off, and everyone, including the person in the shower, was out in the street until the fire department came and the cause was discovered.
And usually when we opened a new project, the timing of the rents against the loan repayment schedule resulted in a little cash cushion. This was just the opposite. It felt like we were always playing catch-up, and it left a bitter taste in my mouth. Years later, when the neighborhood didn’t change for the better, exhausted from trying to make a dog sing, we were forced to sell for less than we owed.
X, if you’re reading this, you’ll be pleased to know that we’re still paying back part of the loan that we were upside-down on.