Caption

Betting on 'The Bluff'

As a Buckhead investor buys up a neighborhood, his derelict properties draw crime, fuel blight

Men lie on sidewalks with plastic bags for pillows, or in doorways of houses whose numbers have long since worn away. Women beckon. They conceal heroin in the clasp of a handshake and slip used syringes into gutter grates.

Above the trees, a mile to the east, downtown towers cast hazy shadows, and pinpricks of light wink. Nobody’s fooling anyone in this neighborhood nicknamed “The Bluff.” Atlanta uses these streets to misbehave.

Official maps call this place English Avenue. It sits next door to where the new $1.2 billion Falcon’s stadium is being built.

It’s also where Rick Warren, a Buckhead investor, goes to seek his fortune. Since the real estate collapse, he has cobbled together a collection of ramshackle houses for as little as a couple hundred dollars each.

Warren knows English Avenue’s scarred streets by heart. From his grey pickup one late summer morning Warren points out broken windows, discarded tires, and a house he says was burned down for fun. He calls out to people he knows by face and name.

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Hambone, he says, I’ll talk to you later.

They’ve seen the 46-year-old around for years. He is the white man with a cowboy’s drawl, who dresses like he stepped out for a round of golf.

What few know is that he now owns some 10 percent of the residential properties in and around English Avenue — a stake experts say is unheard of in other major cities. The sheer number means Warren holds much of the fate of this fragile neighborhood in his hands. Some say he’s holding it hostage.

Publically, Warren says English Avenue residents are just people, like everyone else. He also says he’s willing to wrestle with gangsters, deadbeats and prostitutes to transform the neighborhood. Big changes will take time, but he says he’s got a thick skin, a gun and a stomach for the kind of work he says no one else will do.

“I’m one person, but I am one person that’s going to come here every day, and I’m going to continue to work through those challenges, those issues, and try to figure out solutions,” Warren said.

Privately, he has acknowledged that he and business partners acquired dangerous and derelict properties in hopes of a profit some day. “They are basically liabilities,” he has said. While the investors obtained millions in loans to buy and fix up at least 150 properties here, Warren acknowledged in sworn testimony that many are falling apart, and he planned to do little about it “because it cost money.”

A squatter in one of his houses executed a neighbor, he said. A second one housed prostitutes. Others sit vacant and crack addicts and dealers have taken over.

What’s clear from Warren’s track record is that he’s a cunning investor who is setting the stage for a big payoff. As a result, he is changing the face of English Avenue more than any of its most influential politicians or churches, let alone the core group of residents fighting to revive the neighborhood.

As blight closes in, properties are even cheaper to buy. Warren knows that it’s his time to shine.

“You speculate today because the neighborhood, as it is, is a cesspool of crack addicts, drug addicts of every nature,” Warren once said.

Man on “the street”

People drift towards Warren as he idles his pickup at a complex he owns under the corporate name Yellow Fox Apartments. They’re seeking the help only a last-chance landlord can give.

A couple in a rattling sedan wants a place to stay. An old man asks about odd jobs. One tenant says she’ll pay rent by the weekend. She couldn’t return his call because her phone service was shut off.

Warren turns away. He’s heard it before. In a place like English Avenue, anyone with property, leverage and a few extra dollars can wield power. How he uses it can make hard lives a little easier, or undermine years of attempts to bring a community back to life.

Warren calls his pickup his “mobile office,” and the gritty world where he works “the street.” His descriptions of daily life here seem cut from a TV cop drama.

The street tells tales. Watch your back. Warren ribs a visitor who climbs into his truck that he never lets anyone sit behind him.

“So I don’t get shot in the head,” he says.

A ragtag circle of laborers does his dirtiest chores like picking up trash. Some of them sleep on the porches of his vacant houses.

You can reach him on his personal cell phone if your heat doesn’t work. He collects rent in person and in cash. If you’re short, he might cut you a break, but don’t expect him to make repairs.

The street repays him in one of the few ways it can afford. Knock on a door and ask a question about Warren and word gets back.

Warren operates quietly. His name doesn’t appear on corporate records for a dozen or so companies he and partners have used to buy property. Until recently, residents fighting to take back the neighborhood didn’t realize how many properties he controls.

All Warren has done, those residents say, is create more blight and misconduct. They’ve seen how just one of his tumbledown houses can undo their hard work.

Locals worked for years to create a makeshift playground on a Griffin Street lot where outsiders used to dump tires and stolen vehicles.

It’s the only one in the neighborhood. A church donated a playset and volunteers planted a garden. Now neighbors host free family movie nights with a homemade screen and a borrowed projector.

Only a ragged fence with kicked-in pickets separates the park from one of Warren’s properties, though. Drug dealers set up shop inside Warren’s house after he bought it, neighbors said. Vagrants slept on the porch, and abandoned clothes, food and furniture piled up inside.

When a dog died there in July, no one would move the carcass.

Its stench hit children as they watched cartoons on movie night. The rot lingered a month later.

“It’s really just a black eye on what we’re trying to do,” said Stephen Causby, who has lived here for 11 years.

Residents sense the number of abandoned houses is rising. So many yards are overgrown that this summer, Benjamin Wills, a school principal, had to use the street to walk home from a candlelight vigil for a slain neighbor.

Daddy, why can’t we walk on the sidewalks? his daughter asked.

“I can’t give a legitimate answer,” Wills said.

This place is the Wild West, Warren says. People may not like everything he does, but ordinary rules and regulations don’t apply.

“When you jump in the pigsty, you’re going to smell.”

That’s why he said residents shouldn’t judge him harshly.

“I think what a lot of people do is they step into a community and they don’t understand the extent of issues and challenges that occur here every day,” Warren said. “I’ve boarded properties four and five times, even more within a three to four-week period. There is nothing in the property, but individuals still come back and will break in or tear up or rip off the boards because maybe it’s a place where they like to act out illicit behavior.”

Defying the rules

Warren arrived in English Avenue in 2007, after the $9 million implosion of his Gwinnett County waste management business. He was bankrupt and fighting a felony check fraud charge related to the dealings.

But he saw opportunity in the wreckage of the real estate crash along the Beltline, which is slated to pass just west of English Avenue. Across town, the eastside link of the planned network of parks, trails and transit sparked a construction boom that’s worth at least hundreds of millions of dollars.

He found investors to partner with him and began acquiring properties.

In the years since, Warren and his investment companies have faced millions in bad debt, a bank collapse, unpaid taxes, lawsuits and accusations of murky business dealings that could have crushed other business owners. Yet Warren has extended his reach over English Avenue, and even thrived.

Two prominent businessmen — Wesley Pritchett, now an executive at J.P. Morgan Securities in Atlanta, and David Oyler, a packaging company CEO – were among his earliest backers.

The men created a group of corporations that obtained $4.6 million from Alpharetta-based Alpha Bank & Trust to buy and renovate some 30 properties to rent out.

Warren was the man on the ground. He found properties to buy, collected rent and handled maintenance. He left some homes vacant and leased out the rest.

From the beginning, he paid little mind to rules.

Certain Alpha Bank properties grew dangerous. One vacant, rat-infested building was missing doors and windows and was strewn with trash. At a rental house, a ceiling fan fell on the bed of a sleeping couple, a former business associate said.

The bank collapsed in October 2008 at record speed. Court records allege that companies owned by Warren and his partners kept collecting rent but refused to make loan payments, pay property taxes or open up their books. Oyler and Pritchett declined comment. Warren blames the group that acquired the debt for not caring about the properties.

Warren moved on to new ventures. In April 2009, he convinced a New Jersey company to loan his corporation $2.5 million for the purchase and immediate renovation of 250 apartments in complexes just west of English Avenue.

Months after the sale the windows at one complex were busted out and vagrants had broken in. A city code complaint said a water-damaged ceiling was about to cave in. The investor’s only recourse was to take back the derelict buildings, which it did, alleging payment was never made on the loan.

Warren said renovations went unfinished because other business partners failed to come through with millions in additional funding.

“I just can’t pull money out of my you-know-what,” he said. “Nobody fixes things for free.”

Acres of buildings sit in ruins. Boards nailed to the windows have peeled off, and doors are missing.

Other investors came and went. Over time, Warren developed a knack for finding troves of properties to buy in bulk. His collection grew to also include 65 from a bankrupt South Carolina man. Others sold to cut their losses.

Warren even reclaimed what properties he and his partners lost when Alpha Bank went under. For a time, a receiver had held them. But a court settlement released them from $6.35 million debt, including court costs, interest and fees.

In 2012, Warren used a different company, R City, to buy them back for $260 apiece.

Enough to slide by

Even as Warren’s ventures leave a trail of blight, he out-maneuvers every system intended to hold him accountable.

He has managed to hold on to his properties despite racking up at least 450 liens for unpaid taxes and garbage fees. A 4-inch pile of these bills sit on the back seat of Warren’s truck. He says he doesn’t pay many of them because they are in appeal.

Go ahead, just try to sue him. On government records, companies he controls are usually not in his name, and he has said he has no bank accounts and works for no pay.

A former tenant won a $22,000 judgment against Warren after renting a moldy room that was overrun with ants and cockroaches. Electricity and gas service were sporadic, doors and locks were broken, the windows were cracked and it had holes in the floor, according to her lawyer.

When the Atlanta Volunteer Lawyers Association tried to get the money from Warren, he said in a sworn deposition in late 2012 that his equestrian wife owned the business, not him. She also paid rent for their five-acre estate, which county tax records value at more than $1 million.

“Good luck collecting,” Warren told association attorney Michael Lucas, a court filing shows. The English Avenue houses were worthless, he said. Dealers targeted vacant ones to use as drug houses and tore them up. One house needed to be demolished, he said, but he’d let the city do that.

He dared Lucas to get the money from squatters running a “whorehouse.”

“It has been somewhat successful to my knowledge, but you could go by and find out,” Warren said.

Eventually, Lucas collected a portion of the judgment, but he found no bank accounts tied to Warren or his businesses. “He knows what he is doing. You don’t get away with it for this long if you don’t,” Lucas said.

Warren also knows how to do just enough to get by the overburdened city code enforcement office.

The city has opened at least 80 code enforcement complaints against Warren and his properties since 2010, many for conditions deemed “highly hazardous.” Eighteen properties were such public nuisances that the city started proceedings to clean, close or demolish them at taxpayer expense; most have yet to be cleaned up, property records indicate.

He’ll mow a lawn, pick up the trash or board a house when he’s caught. But code enforcement is no match for him.

The agency is overwhelmed by tens of thousands of other deteriorating homes across Atlanta, and they’ve seen properties in English Avenue worse than Warren’s.

Code enforcement can get demolition orders for the worst violations. But the office has a backlog of some 250 open orders, with an additional 400 to 500 in the pipeline. The average cost to knock down a house is $20,000, said Major James Shaw, head of the police department’s code enforcement unit.

“There are hundreds that we could get orders for if we had the money,” he said.

State and local law provide few options to take over properties owned by repeat violators like Warren. The worst penalty for a housing code violation is a $1,000 fine and up to six months in jail. You can get worse for shoplifting.

A house Warren purchased for less than $1,000 landed him in court in late August because he left it vacant and unsecured. He came to the hearing without a lawyer, sporting a button-down shirt, tan slacks, and loafers without socks.

In a five-minute appearance, he pleaded guilty, and a judge ordered $1,400 in fines and fees. Warren said he would pay on his way out the door.

Afterwards, Warren said he expects to continue as one of Atlanta’s biggest violators of housing code. “Probably, I’m going to be on the top of the list for the next five to seven years.” he said.

At least code enforcement knows where to find Warren. He boasts that he knows the bureau so well that all of its officers’ numbers are stored in his cell phone.

Some residents are just grateful for any token fixes Warren offers. Dealers may have sold heroin this year from one of his houses, but neighbors are relieved that it’s boarded up now. Another house with an out-of state owner was so poorly secured that a man wandered inside and died. Police found him with a needle in his arm and heroin in his pocket.

Warren trimmed trees at certain properties he doesn’t even own yet, said a gaunt Newport Street resident who goes by the name “Juicy.” This is no small thing in a place where broken streetlights don’t get fixed.

Juicy used to squat at a vacant house nearby before Warren bought it, she said, and hopes Warren will let her do it again. “If he does get these homes, I’ll be glad he do get them,” she said.

Between Warren, absentee property owners, drugs, poverty and crime, those trying to rescue the neighborhood are also overwhelmed.

On a Saturday afternoon, Monica Mendoza pushed her grandson in a stroller down what some call the neighborhood’s nicest street. A church group handed out free back-to-school supplies at the makeshift park, although the start of class had come and gone weeks ago. Volunteers piled onto a picnic table for a photo and it collapsed under their weight.

Mendoza passed a boarded complex that advertised condos for $120,000. Down the way was a vacant lot near where police found a woman’s nude body in July. Its tall weeds were only mowed after the corpse was carted away, she said.

She shook her head at a newly-discarded mattress. It lay in the yard of the same abandoned house where Mendoza had just hauled away a junked sofa.

People think they can get away with anything in English Avenue, said Mendoza, who has lived here 18 years. “Seen it before, seen it before,” she said.

Uncertain future

Five years down the road, Warren predicts, the neighborhood will look nothing like it does now.

But he won’t elaborate, saying that future depends on a lot of factors.

His timing could be wrong. Or other investors might drive up prices and keep him from buying more properties.

English Avenue might even get the better of him. Every dysfunction in society has taken root here and flourished. One man can’t fix it all.

Down Fox Street, Warren singles out a row of broken down homes and warns that some investors have no intention of repairing them. He fails to mention that he has owned one of these since 2008, and code enforcement records show repeated complaints for overgrowth.

There’s a simple explanation, he says. Raising construction funds takes time. He hopes to get going in six months or so.

On Newport Street, he points out another obstacle: A vacant house keeps him from making repairs on one he owns next door. It lowers his property’s value so much he couldn’t sell it for the cost of renovations.

Yet he owns both vacant houses that flank it, and five more ramshackle ones in that square block alone.

There are other streets just like these.

On Division Street, where he owns four properties in a single block, a mattress and other refuse litter one of his front yards. He explains that he had just cleaned it up when it was dumped on twice.

On Cairo Street, where he owns 14 houses in a four-square-block area, stray dogs wander through desolate lots, scavenging through trash piled waist-high. One licks at a fast food wrapper.

A few feet away, a lone girl skips out the front door of a faded rental and plays barefoot in the street.

Outside the Yellow Fox Apartments, Warren shoos away men who loiter on its steps.

Drug dealers and addicts, Warren complains. You wouldn’t believe the damage they do.

“That right there? Every one of them alcoholics. They do nothing but destroy and tear up,” Warren says.

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