Update (12/18/20): The conservatorship case filed by M&M Realty Holdings, seeking control of a four-unit Wilkinsburg house owned by Kathleen Wilson, has been settled. Attorney Marc Taiani, of M&M, said terms of the settlement are confidential.
Attorney Weldianne Scales, representing Wilson, called the settlement “very reasonable and amicable.”
Following PublicSource’s story, a GoFundMe page set up to support Wilson’s efforts to improve the house raised $18,275. In light of the settlement, “Ms. Wilson is going to instruct the individual that’s over that to make sure that those funds go back to the donors,” said Scales.
Two state legislators who read the story suggested hearings and possibly amendments to the conservatorship law, while the chair of the House Urban Affairs Committee said the current law functions well.
“There probably need to be some changes to the law going forward,” said state Sen. Wayne Fontana, D-Brookline, a Realtor. He suggested hearings, adding that community groups and municipalities might be given more say in the process.
State Rep. Sue Helm, R-Dauphin County, who chairs the House Urban Affairs Committee, said that a judicial process with more participants may leave blighted properties sitting “for a heck of a lot longer time.”
Helm added: “We feel this law has worked pretty well for us.” It has “plenty of built-in due process,” she said, and every decision is overseen by elected judges.
State Rep. Sara Innamorato, D-Lawrenceville, said she and others are “already looking at what it would take to get [a hearing] scheduled,” adding that it would focus on “where [conservatorship is] exploited and what in the law allows it to be exploited or not necessarily used the way it was intended.”
On a sunny November day, attorney Marc Taiani and five other men walked into the stout brown house owned by 77-year-old Kathleen Wilson, intent on assembling the damning information they needed to seize control of it.
“An open sewer pipe. That’s something,” Taiani said as he toured the dusty basement of the four-unit house on Wilkinsburg’s Peebles Street. “Do you believe that’s asbestos right there?” he asked building inspector Bill Martin, pointing at the ceiling. (Martin said he couldn’t tell.) “They have locks on the windows,” Taiani mused later, noting a potential safety hazard. “They actually have key locks!”
Wilson, who is battling breast cancer and was accompanied by lawyer Weldianne Scales, could only watch as the team critiqued the house her family bought, in 1983, for $82,000. If Taiani could prove that it had not been recently occupied, marketed or substantially rehabilitated — and that it’s a public nuisance, unfit for human habitation or a fire hazard — then his firm could be named the building’s “conservator,” and might eventually become its owner.
Those are the rules laid out in the Abandoned and Blighted Property Conservatorship Act, a 12-year-old state law meant to allow responsible owners, under court supervision, to take over empty buildings that can otherwise drag neighborhoods down. Some community groups have used conservatorship petitions to seize and improve blighted properties, but more cases are filed by landlords and other private developers. And while conservatorship in the hands of a nonprofit may have helped East Liberty’s development, some observers are concerned about its potential effects in nearby Garfield and Wilkinsburg.
Judges oversee all conservatorships, and in many cases the property owner of record makes no effort to oppose a takeover. Once in a while, though, a determined owner like Wilson emerges.
Standing in the Peebles Street backyard littered only with one broken window, Wilson said that health problems compelled her to pause — but not end — efforts to rehab the building. Then, in April, Taiani filed a petition to make his company the building’s conservator.
“It’s unadulterated greed,” Wilson said. The petition spurred her to scramble to hire a lawyer, restart work on the property and secure financing, in between chemotherapy appointments. Of the seven-month court fight with Taiani, she said: “This has taken a lot of energy.”
Taiani, in an interview conducted on the Peebles Street sidewalk, said he’s just trying to convert an abandoned house, six blocks from his own Wilkinsburg home, into occupied apartments. “Had Ms. Wilson taken care of the property, as a true owner should, and maintained it, and had it occupied,” he said, “then we wouldn’t be here today.”
The law that Taiani is using to try to take control of the Peebles Street property aims to balance the rights of owners with the realities of abandonment.
Property rights are a pillar of American law — starting with the Fifth Amendment’s restriction on government seizure of private property — but they are not absolute. The Great Recession of 2008, which saw surging foreclosures, spurred concern about properties left to decay by disinterested owners. So state legislators, led by then-Rep. Don Walko, a North Side Democrat, passed an act allowing entities “with experience in the rehabilitation of residential, commercial or industrial buildings and the ability to provide or obtain the necessary financing” to petition courts to take control of abandoned properties.
Under the act, properties are eligible for takeover if they meet all of the following criteria:
- Haven’t been legally occupied for 12 months;
- Have neither changed hands in six months, nor been marketed for sale for 60 days
- Aren’t subjects of foreclosure filings;
- Could potentially attract children who might then be harmed by conditions on the property;
- Risk attracting prostitution, drug use or vagrancy;
- Negatively affect the wellbeing of neighbors;
- Are found to fit three of the following five characterizations: public nuisance, unfit for human habitation, risk of fire, subject to unauthorized entry, or in need of substantial rehabilitation and not subject to any such work in the prior 12 months.
A “competent entity” that is either a nonprofit developer, or a resident or business located 2,000 feet of the building, can petition the Court of Common Pleas to name a conservator for any such building. If a judge approves, the conservator can then start rehabilitating the building.
Here’s how a building’s conservator can become its owner:
- After the judge approves the conservator’s plan, the conservator documents costs of the litigation, and of the rehab, plus a 20% “conservator’s fee” allowed by the act.
- The judge approves the resulting amount and converts it into a conservator’s lien — a debt attached to the property.
- The judge sometimes eliminates other liens, like old, unpaid mortgages.
- The conservator asks the judge for permission to sell, or take possession of, the property to satisfy the debt reflected in the conservator’s lien.
- If the property is sold, the law says the proceeds should be distributed according to a list of eight priorities, with the court costs and back taxes at the top, the conservator’s expenses and fee in the middle, and the original owner at the bottom.
In 2009, a year after he shepherded conservancy into state law, Walko was elected to the Allegheny County Court of Common Pleas. From 2017 through his retirement in September, he was the judge assigned to handle conservancy cases.
“The volume was really increasing substantially,” Walko said, in a November interview. However, he wasn’t seeing as many nonprofit developers as he had expected. “I thought there would be more interest among neighborhood groups,” he said. “But maybe that is developing now.”
Within Allegheny County, at least one nonprofit neighborhood organization, East Liberty Development Inc., has made ample use of the conservatorship law. ELDI Director of Operations Ted Melnyk said that over roughly seven years the organization has filed around 15 or 20 conservatorship petitions, in some cases taking ownership of blighted properties, and in other cases steering them to other new owners.
ELDI aims to replace blight with “affordable home ownership,” said Melnyk. Because the conservatorship law gives judges “amazing discretion” to wipe away debts and alter ownership of property, it is a relatively fast and inexpensive way to change a property’s trajectory, he said. “We’re big fans of conservatorship.”
A December deadline
One of the cases that came before Judge Walko was Taiani’s bid for control of Wilson’s house.
Wilson is a retired former employee for the state Human Relations Commission and later for Allegheny County’s Office of Children, Youth and Families. She is also a former National Organization for Women board member. Her mother, several tenants, and her son had lived at various times in the Peebles Street house, she said, and she dutifully paid the taxes. In 2018, she and one of her sons started cleaning it up, hoping to rent out its units, she said.
Last year, though, she and her son had health problems — in her case, metastatic breast cancer — and they put the effort on hold.
“She picked it back up in 2020,” Scales said. “But by that time, Mr. Taiani already had his eye on the property.”
Taiani said he has lived in or near Wilkinsburg since 1998. He served on borough council from 2014 through 2017, and made two unsuccessful bids for district judge.
“I walk by [Peebles Street] every day,” he said. “… I love this neighborhood. … I love my neighbors. But I’m tired of seeing abandoned properties with people not taking care of them.”
Taiani’s company, M&M Realty Holdings, filed a petition in April alleging that the Peebles Street property was vacant, packed with discarded furniture and appliances, and accessible to kids or vagrants via a “dangerous wooden balcony.” Its yard was littered with trash and broken tree limbs, according to the petition.
Wilson and Scales countered in an answer to the petition that the owner “is actively obtaining bids to restore/improve the property.”
Walko ruled in September that the property met the conditions for conservatorship.
“The fact that we had been doing something on the house in 2018 had no weight [in court] because we had done nothing in 2019,” Wilson said.
But since Wilson testified that she was trying to rehab the property, Walko ordered an inspection, coordinated by Taiani’s company, to help the court to assess her progress. If Wilson could not show, by December, that she was fixing the property’s problems, Walko wrote, the conservatorship could be granted to M&M.
The king of conservatorships?
Taiani and his companies have, to date, filed nine conservatorship petitions — eight seeking control of properties in Wilkinsburg, one for a house in Point Breeze. He has not yet obtained ownership of any of the involved properties.
Neither Taiani nor ELDI are the biggest users of conservatorship in Allegheny County. That appears to be Aaron Chaney, a Trafford-based landlord and property buyer and seller. PublicSource found 63 conservatorship petitions filed by Chaney or six entities — one nonprofit corporation, four limited liability companies and one limited partnership — with which he is associated.
Chaney testified in a November hearing on one of his petitions that he has “bought and sold probably 1,000 houses” in the Pittsburgh area. “I own or partially own over 200 rental units,” he said, later in the same hearing. “We fix and resell at least 50 houses a year.”
A few of Chaney’s conservatorship cases have been dropped, and most are still in process, but his entities have taken ownership of at least 10 of the subject properties — and in a few cases turned a tidy profit on them, according to county court and real estate records.
For instance, on Dec. 31, 2016, the Chaney-led nonprofit corporation, Blight 2 Light Inc., filed a petition to take over a property on 38th Street, in Lower Lawrenceville. Chaney’s attorney, Wayne Cobb, wrote that the property met the conditions for conservatorship: vacant, not on the market, with roof damage, debris and uncut vegetation.
The owner did not contest the conservatorship. The city, county, and Pittsburgh Water & Sewer Authority filed court paperwork to enforce $16,362 in overdue tax and water bills associated with the property. Walko named Blight 2 Light as the conservator. On Aug. 2, 2018, the judge ruled that Blight 2 Light had put $15,966 into the property, would pay the taxes and water bills, and could take ownership of the property. Six months later, Blight 2 Light sold the property to a limited liability company for $148,000.
Chaney did not agree to an on-the-record interview.
Can conservatorship spur gentrification?
Chaney’s companies have sought conservatorships all over the county, seeking control of buildings or lots in East Allegheny (8 properties), Troy Hill (8), Perry South (7), West Oakland (7), Garfield (4), Lower Lawrenceville (4), Swissvale (4), Bellevue (3), Stanton Heights (3), Central Northside (2), Point Breeze (2), Wilkinsburg (2), Allentown, Blawnox, Bloomfield, Coraopolis, Point Breeze North, Polish Hill, Scott, Terrace Village and Wilkins (1 each).
Some neighborhoods appear to attract outsized interest from other would-be conservators. Two of those hotspots — Garfield and Wilkinsburg — are neighborhoods that suffered significant abandonment, but are close to hot real estate markets.
In Garfield, 19 properties have been subjects of conservatorship actions, according to Rick Swartz, executive director of the nonprofit Bloomfield Garfield Corp.
“I would say that [conservatorship] has done good if it has helped to fill vacant properties that were just sitting out there abandoned,” said Swartz. But whereas his organization tries to transform vacant properties into affordable housing, he’s concerned that conservators may “convert the property into an upscale home that begins to redefine the housing market in Garfield.” In other words, conservatorship could be a tool of gentrification.
“If gentrification were to sweep over Garfield as a result of conservatorship or other tools of private developers, then over the next half a century, Garfield’s diversity will be whittled down little by little by little, and it will become another Lawrenceville,” Swartz said. “Fewer lower-income buyers will be able to purchase homes in Garfield.”
Would-be conservators have, since 2015, targeted 41 properties in Wilkinsburg, according to Kate Luxemburg, a property data consultant to the borough. The borough has an estimated 700 vacant buildings, and is adjacent to strong housing markets in Pittsburgh’s East End.
Landlord CP Development, which owns more properties in Wilkinsburg than anyone except the municipality itself, has filed 16 conservatorship cases, all within that borough. It has taken ownership of five properties via conservatorship.
CP owners Charles and Peter Patterson declined to be interviewed. They did so via Monaca-based lawyer Wayne Cobb, who handles many conservatorship cases, including CP’s and Chaney’s, and who has at times represented Taiani.
CP, according to an email from Cobb, is “not seeking to place strategies for community engagement and beautification projects into the public discourse because they are not public figures.”
Some landlords are “buying properties that probably nobody else would be buying, and they’re making them into housing, which we need, and keeping a roof on them and keeping them from collapsing,” said Wilkinsburg Community Development Corporation Executive Director Tracey Evans. “That’s a good thing.”
Evans, though, prefers that would-be owners of blighted properties try to use other methods — the countywide Vacant Property Recovery Program, or the borough’s tax abatement program — rather than conservatorship. The reason: Those other mechanisms give local elected officials some say, ensuring that the resulting transactions fit with community goals. Community leaders have little leverage in conservatorship cases.
Luxemburg suggested that the law could be amended to require that would-be conservators first try to negotiate with the property owner, check with the municipality about whether the property has been cited for code violations, and seek input from neighbors before petitioning the court.
Eric Vanistendael, a Lawrenceville-based community development consultant who has filed five conservatorship petitions, said that a few amendments to the law could rule out abuses. Conservatorship could be restricted to publicly accountable nonprofit entities and to people who live or work close to the targeted properties.
The law is “going through growing pains — 10 years of growing pains in Pittsburgh,” said Vanistendael. “There are precedents we can see elsewhere that give it legitimacy, make it work for communities, and it can be done above board.”
From acquaintances to foes
Back on Peebles Street, Taiani said he’s pursuing conservatorship over Wilson’s property “by the book, through the court system. There’s no end around, runaround here.”
Since Walko has retired, the fate of the property lies in the hands of Judge John T. McVay Jr., who has taken over the conservatorship docket.
Taiani said he is willing to work with the Wilson family. “They’ve told us that it’s their property, they’ll do what they want with it.”
Wilson said she wishes it hadn’t come to this. She’s known Taiani since he moved nearby, in 2003, “and he knows me” through a mutual friend and encounters during his political campaigns. She said she’s determined to fight to keep a house in which her mother lived for decades, and which she sees as a key piece of the family legacy.
“My mother used to say that they’re not making any more land,” Wilson said. “So it’s extremely important to our family to hold on to this property, so I have something to pass on to my two boys, and my grandson.”
Rich Lord is PublicSource’s economic development reporter. He can be reached at email@example.com or on Twitter @richelord. Amanda Su contributed.
This story was fact-checked by Kellen Stepler.
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