Embattled landlord Frenz sells the last of his Minneapolis buildings, giving control to tenants

Low-income tenants in south Minneapolis will gain control of five apartment buildings from embattled ex-landlord Stephen Frenz, ending a bitter fight after complaints of substandard conditions and attempted evictions.

The sale of the buildings in the Corcoran neighborhood on Monday means Frenz has lost or sold off all of the 60-plus apartment buildings he once owned in Minneapolis.

Frenz has been entangled in court proceedings for the past five years over his properties. He was fined $187,000 in housing court in 2017, copaid an $18.5 million settlement of a class-action suit brought by tenants in 2018, and was convicted of perjury last year for falsifying lease documents.

Mayor Jacob Frey hailed Monday's sale, saying it would not have happened without the persistence of tenants, innovative measures and partnerships, plus a commitment of city funds and resources.

"It's been a long time coming," he said. "Our administration has put the weight of the city behind renters who have been mistreated by unscrupulous landlords."

Frenz could not be reached for comment.

The buildings were purchased for $7,085,000 by Land Bank Twin Cities, a nonprofit lender that also acquires property, mainly for affordable housing purposes. The tenants have formed a cooperative called Sky Without Limits and plan to buy the buildings from the land bank in the next 2 ½ years, said Chloe Jackson, a tenant and chairwoman of Inquilinxs Unidxs por Justicia (United Renters for Justice), the tenants' rights group that backed the residents of the buildings.

"I'm ecstatic," said Jackson, who said she had faced water leakages and pest infestations during the seven years she has lived in her apartment with her son and a nephew. "We still have more work to do but we are going to enjoy the moment."

For more than a year, Frenz resisted selling the buildings with the prospect that the tenants would own them.

Eddie Landenberger, vice president of the Land Bank, said the buildings contain 69 units, 35 of them occupied. The land bank will begin rehabbing them and then rent out the vacant units. More than $1 million has been raised for rehabbing. A total of 108 people, including children, live in the units.

The City Council stripped Frenz of all his rental licenses in 2017 for hiding a financial arrangement he had with Spiros Zorbalas, who co-owned the properties with Frenz. The city banned Zorbalas from holding rental licenses in 2012 because of repeated housing violations. Zorbalas was also unavailable for comment.

Faced with the latest revocation, Frenz and Zorbalas sold off most of their buildings. But the five buildings on the 3100 block of 22nd Av. S. remained in limbo after Frenz sold them off on contracts for deed, but the city nixed the sale, saying the two men were still in control.

The tenants continued to make the case for buying the buildings, organizing several demonstrations.

A total of $8.45 million was raised for the project that includes funds for rehabbing. The city provided a $3.45 million zero-interest loan through a program designed to preserve naturally occurring affordable housing, said Andrea Brennan, the city's director of housing policy and development.

In addition, the land bank received a low-interest loan of $4.98 million from the Local Initiatives Support Corp., a nonprofit that gets large financial institutions and investors to support affordable housing projects around the country, said Peter McLaughlin, its executive director.

The tenants, through Inquilinxs Unidxs por Justicia, raised $250,000 from the McKnight Foundation, $100,000 from the Pohlad Foundation and $250,000 from individual donors through Headwaters Foundation for Justice.

It was not clear at the outset that the tenants would be successful. United Renters organizers canvassed the units, building a tenant support network that pressed city inspectors to hold Frenz accountable.

"The tenants deserve a lot of credit for this happening," Brennan said. "It's not easy to take on your landlord and fight evictions for months and months and to form a cooperative. Their perseverance is really remarkable. It is great the city could be part of helping to support them."

The buildings were being overseen by a court-appointed administrator as part of a tenants' remedy action.

As late as this year, Frenz was in district court seeking to evict the tenants.

"We're thrilled," said Luke Grundman, the attorney from Mid-Minnesota Legal Aid who represented the tenants. "The tenants fought for so long. It's so really good for them to finally have security, knowing that they won't be evicted."

As part of the sale, he said, Frenz agreed to stop his eviction suits and the tenants agreed to withdraw the tenants' remedies action.

"The tenants got themselves organized," McLaughlin said. "This was a fight, And it never happens without a fight."

Jazmin Mendoza Lopez said she faced cockroach and mice infestations and broken windows and water pipes, along with eviction notices in the five years she's been a tenant.

"I feel so excited," she said. "I am so emotional right now because we have fought so hard and suffered for a long time to get to this point. It is a dream come true."

Randy Furst • 612-673-4224

Twitter: @randyfurst