When Columbia Heights police posted their notices on Stauch's properties, the bank called in his notes. His insurance company canceled his policies, and the federal Department of Housing and Urban Development revoked his ability to accept Section 8 rent payments. "His income went from $30,000 a month to practically nothing," says White. With no credit and no cash flow, White maintains, Stauch was forced to sell his properties to the city at a substantial loss--an average of $53,000 apiece for buildings which, according to tax records, were assessed at more than $70,000 each.
Meanwhile Stauch and his family battled the city's misdemeanor charges in Anoka County District Court, arguing that officials had improperly revoked their duplexes' licenses. City policies didn't require that a building pass inspection before license renewal, says White; they only called for an inspection to be performed. In addition, says White, the city singled out Stauch for punishment because he rented to minorities. "Landlords with white tenants had years to make their repairs," says White. He points to another Sheffield neighborhood property owner who was given two and a half years by the city to rid his buildings of lead paint. "That was a lot more hazardous [to tenants] than anything the city cited Lee for," says White.
But that's not the way the city sees it, says attorney Tom Malone, an attorney who has represented the city of Columbia Heights in the matter since 1994. "The fundamental dispute here is whether those properties were up to code and were something that people should live in," he says. "And the city decided they were neither." Anoka County District Court Judge Gabriel Giancola ruled in favor of the city on the misdemeanor charges, but his decision was overturned by the Minnesota Court of Appeals in 1994. Meanwhile the city had removed the buildings and sold the land to a private developer, who constructed the $110,000-to-$180,000 homes that now occupy the lots. In 1995, Stauch sued the city in federal district court; White says he plans to ask for $2 million in damages. The trial is set to begin January 7.
Malone, however, denies that Columbia Heights lowballed Stauch, adding that the landlord simply has an ax to grind. "The price of the properties was negotiated," says Malone, "and at the time, it wasn't an issue for Stauch. But now that the place has been cleared off, he's suddenly decided that it's worth more."
Correction published 1/27/99:
Because of an editing error, parts of the 1/6/99 City Beat story "On Closer Inspection" incorrectly identified the landlord who is suing the city of Columbia Heights. His name is Leland Stauch. The above version of the story reflects the corrected text. City Pages regrets the error.