Spiros Zorbalas, the slumlord of South Mpls, sold his properties following city pressure [UPDATE]

Spiros Zorbalas on the cover of City Pages in January 2008.
Spiros Zorbalas on the cover of City Pages in January 2008.
Will Staehle

On Wednesday, Minneapolis City Council Member Gary Schiff announced that Spiros Zorbalas, better known as "The Slumlord of South Minneapolis," will no longer be the landlord of broken boilers, rodents and roaches, and overflowing dumpsters. Not because he's changed his ways, but because, following a legal battle with the city, Zorbalas finally sold his local properties.

Zorbalas and his company, UPI apartments, owned 38 buildings with 752 units and over 2,000 mostly low-income tenants, according to Schiff. Since he bought his first buildings in the late 1990s, 2,131 violations and more than 200 lawsuits have been filed against him, and at least three city laws have been directly inspired by him.

A Zorbalas timeline:
- 2008: The Slumlord of South Minneapolis: Rodent and roach infestations. Overflowing dumpsters. Frigid heating vents. Meet Spiros Zorbalas... [Cover]
- 2010: Spiros Zorbalas update: Are notorious properties getting cleaned up?
- 2011: Spiros Zorbalas faces rental license revocation hearing

The announcement that Zorbalas is bowing out comes as the city prepared to revoke his rental licenses, its latest move in five years of efforts against the notorious property owner.

That revocation process began years ago with three of Zorbalas's buildings. At the time, Zorbalas tried to form shell corporations to protect him from city oversight, but as we reported, a judge didn't buy it and recommended that the landlord be, well, evicted.

Local real estate investor Steve Frenz bought Zorbalas's buildings December 18, and over the past month, has been quietly bringing them up to code.

When Schiff heard about the deal, "I breathed a big sigh of relief," he says. If Frenz or another buyer hadn't stepped in, the city would have been in the unenviable position of condemning Zorbalas's buildings and evicting his tenants. Now, Schiff says, the tenants can stay put, and Frenz "is catching up on 15 years of deferred maintenance."

The city has learned from its fight with Zorbalas. "It has required closing numerous loopholes in city ordinances that allowed this problem to get this big," Schiff says. "The next time somebody allows an entire inventory to fall into disrepair, and the next time someone targets immigrants to take advantage of, we will be able to respond faster."

The MSP Business Journal talked to Zorbalas for his take on the sale. He chalked up some of the code violations to his attention shifting into other markets, and says he decided to sell "after I looked at the deal and realized how lucrative it was."

He maintains that he was a decent landlord. "I don't think I got a fair shake," he told the Journal. "Aren't there cockroaches in every building in the Twin Cities?"

At the time of our first expose on Zorbalas, in 2008, the 49-year-old responded to City Pages's investigation by saying, "There'll be a little hoopla for a week. Big deal. We're going to keep running our business."

It took five years, but Zorbalas won't be running his business in Minneapolis anymore.

Here's our full cover from 2008:

Spiros Zorbalas, the slumlord of South Mpls, sold his properties following city pressure [UPDATE]
Will Staehle

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