Some Minneapolis apartment buildings get a top rating despite code violations

Two years ago, the city of Minneapolis began rating apartment buildings based on their condition, maintenance and need for city services.

The best-kept buildings — dubbed Tier 1 — require inspections every eight years and pay a lower license fee. At the other end, Tier 3 buildings — the worst classification — must be inspected annually and pay higher prices for licenses. The goal, the city says, is to keep a close eye on the problem properties and make the landlords who own them pay for the extra effort.

But a review of the ratings shows they don't always square with the conditions at apartment buildings around the city. Landlord Stephen Frenz's buildings racked up 453 building violations from 2013 to March 2016, yet 61 of his 66 apartment buildings were rated in Tier 1 and the remaining five were rated Tier 2. And the classification of other apartment buildings also raises questions.

Of the 29 buildings with the most violations — and more than five violations per unit — between 2013 and March 2016, 14 were classified as Tier 1, according to city records.

"It's preposterous," said Roberto de la Riva, an organizer with Inquilinxs Unidxs Por Justicia (United Renters for Justice), which has been mobilizing tenants for more than a year to protest conditions in Frenz's properties. "It shows a weakness in the system."

City officials said the tier system continues to be tweaked. New data provided by the city showed that seven of the worst 29 properties are now rated Tier 1, six are Tier 2, and 16 are Tier 3.

"We make adjustments as they are appropriate," said Noah Schuchman, director of regulatory services in Minneapolis.

One of Frenz's Minneapolis properties classified as Tier 1 by the city is an apartment building in the 3000 block of 14th Av. S.

That building, which had a series of problems including pest infestation and lack of heat, was the subject of a lawsuit brought on behalf of its tenants in 2016.

"I'd be very surprised if these [Frenz] buildings warranted a Tier 1 rating," said Michael Cockson, an attorney from Faegre Baker Daniels, who represented the tenants in that case.

The tenants won the suit after Hennepin Housing Court Referee Jason Hutchison found widespread violations, and Frenz was fined $187,390 last month for "bad faith litigation conduct," the largest sanction in the 27-year history of housing courts in Minnesota.

But Frenz's attorney, Bradley Kletscher, suggested the high tier ratings of Frenz's apartment buildings are correct.

"Maybe all the allegations by the critics are inaccurate," he said this week. "That's why they're rated Tier 1."

In 2012, Frenz announced he'd purchased more than 60 apartment buildings from Spiros Zorbalas after the City Council forced Zorbalas to sell because of his reputation for poorly maintained buildings and the revocation of two of his licenses.

Now the city is trying to revoke all of Frenz's rental licenses after concluding that Frenz misrepresented the purchase and that Zorbalas still has a financial interest in the apartment buildings.

An administrative hearing data has not been set, but the City Council could move to revoke the licenses within months.

But Frenz's properties aren't the only ones rental advocates say are wrongly classified.

"There are probably a good number of properties that are Tier 1 that shouldn't be," said Eric Hauge, director of organizing and public policy for HOME Line, a statewide nonprofit tenant advocacy organization.

City staff said buildings are rated on the basis of a wide range of data, including inspection violations, solid waste collection issues, administrative citations and "conduct on premise notices" issued by the Police Department.

"Properties are re-evaluated and reassigned to tiers every year," Casper Hill, a city spokesman, said in a written statement. "No two properties are the same — inspectors look at properties individually and the individual issues vary."

A large number of violations could be a reflection of a systemic problem at the apartment building, he said, but it could also be because of a longer interval between inspections and involve only routine maintenance issues.

Still, some tenants are skeptical.

Bridget Peake peered up at the ceiling damage in her apartment on the 3700 block of Minnehaha Avenue. It was a Tier 1 building in 2015 and again in 2016 and is owned by Frenz's company, Apartment Shop. Mold was clinging to the plaster.

"They keep telling us they are going to fix the problem and he won't," she said.

Brenda Eagleman, who rents the apartment with Peake, said she's been bitten by bedbugs.

"We go with a flashlight and catch them before we go to bed," she said.

The rent on the apartment was recently raised from $825 to $960 a month.

"How can they raise rents when nothing gets fixed?" Eagleman asked.

In a separate apartment in the same building. Angelleece Hawkins, rustled through her children's toys and a cockroach crawled out. Two of the four burners on the stove don't work. On cold days, she said she has to turn on the oven and open the oven door to keep the apartment warm.

"I deserve better," said Hawkins.

Randy Furst • 612-673-4224