SAN ANTONIO – The federal government has sued the City of San Antonio to keep it from demolishing a nuisance property on the West Side that neighbors know as a “drug house.”
The home, in the 2100 block of Athel Avenue was the target of a city raid in August. In February, the Building and Standards Board (BSB) ordered the house be demolished because of various structural and safety issues, as well as “repeated criminal enforcement efforts.”
However, the U.S. Department of Housing and Urban Development (HUD) said the homeowner, who died shortly before the BSB hearing on Feb. 1, took out a federally insured reverse mortgage in 2010, which gives HUD a lien interest in the property.
And since the owner has died, HUD says that debt is due. Demolishing the house could make it harder for HUD to collect that money if it needs to sell the property.
Drugs, DART, Demolition
The Dangerous Assessment Response Team (DART), which targets the city’s worst nuisance properties, raided the home on Aug. 22, 2023.
The DART program is run out of the City Attorney’s Office, which also ropes in several other city departments, especially code enforcement and police.
City spokeswoman Laura Mayes emailed KSAT a statement from the City Attorney’s Office, saying, in part, “the property was the subject of many neighborhood complaints due to felony drugs sales by the person residing there.”
Neighbor Juan Mello told KSAT on Friday, “You can see a bunch of action coming in and out,” and “It’s like a drug house, basically.”
“It’s what we all know it as around here,” he said.
SAPD SAFFE Officer Anthony Pena also said during the Feb. 1 BSB hearing that neighbors had complained about drugs being distributed out of the house. There were about 40 calls to police over two years, he said, including eight disturbances, two assaults, “about” seven shots fired, and two mental health calls.
“Obviously, we know that there’s criminal activity coming from the house,” Pena said, though he noted SAPD was not able to determine any crimes beyond what neighbors had reported.
Police arrested one woman during the August raid after they found her with what was believed to be a few grams of meth. Another person staying in the home was arrested on an outstanding felony warrant.
However, the city didn’t only focus on drugs or crime.
Dangerous Premises Officer Khrystal Towne presented numerous photos of the house from the August raid. The photos showed a run-down structure with broken or boarded-up windows, partially exposed slab floors, rot damage under a leaky sink, and large amounts of trash and debris.
The city returned to the home on Dec. 19, but Towne said nothing appeared to have changed.
City staff recommended that the house be torn down because of various safety issues with the building, including the fact that it was so dilapidated that it had become “a harbor for vagrants or criminals.”
The city had identified the owner as Cesario Pena. However, his granddaughter, Priscilla Cruz, told the BSB Pena had died only about a week-and-a-half earlier. Bexar County land records indicate Pena left the home to multiple people.
Cruz was not one of the recipients but told the board she had also lived on the property for two years.
“I moved into the property, in regards of — ‘cause I heard what was going on, trying to clean up the property, and I haven’t had no success,” she said.
Cruz said she hadn’t known about drugs going in or out of the house because she was “always working.”
She was also unsure if “the bank” would take the home, as she had recently learned about a reverse mortgage on the property.
The board ultimately voted 5-0 to order the home’s demolition.
HUD Lawsuit
The federal government filed its lawsuit on March 12 in the Western District of Texas, asking the city’s demolition order be declared invalid and unenforceable.
HUD says it wasn’t notified about the Feb. 1 BSB hearing until it had already taken place. It also argued that the board did not have the power to order the demolition of a property in which HUD had a lien interest.
According to HUD’s lawsuit, Cesario Pena took out a HUD-insured reverse mortgage for $72,000 in 2010 through Wells Fargo. The loan was secured with a deed of trust to Wells Fargo, which the government said the bank eventually signed over to HUD in 2017.
That 2017 transfer indicates the interest on the original loan had likely grown close to the maximum of what the bank was willing to risk. So Wells Fargo was dumping its claim and associated risk onto HUD.
According to the lawsuit, Pena had already signed a second deed of trust to HUD in 2010, as well.
But when Pena died, the debt became due immediately. Since HUD holds both deeds of trust, the federal agency is responsible for collecting the money.
If Pena’s heirs couldn’t pay the debt, HUD would have to sell the property to make back the money, something that would presumably be harder if the house were demolished.
In its response to the lawsuit, the city denied many of the government’s claims and asked the case be dismissed.
In its statement to KSAT, the City Attorney’s Office also said, “The purpose of the lawsuit is to temporarily halt the demolition process while the parties negotiate a resolution, if feasible.”
A HUD spokesman told KSAT via email they couldn’t comment on an open legal case.
Vacant?
Bexar County land records show the BSB chairman signed an order on Feb. 8 calling for the house’s demolition within 30 days.
The order also required the utilities be disconnected and the house be vacated and “secured against unauthorized entry.”
But, amid the court battle, the house was still standing Friday. It was less clear whether it was vacant.
No one answered the door, which was missing a lock, and there weren’t any cars in the driveway either.
However, someone had left a full trash can on the curb for pickup, and neighbors said they still see people coming and going.
“They still do whatever they do,” Mello said. “So, it’s — nothing has changed.”