Houston's Housing

Simmons says she wishes the city had done more to accommodate families who were truly working poor. "When people think of the low-income and homeless, they don't think of families," she says. "But you have 300 people a night sleeping in shelters and 4,000 a year passing through the doors. Half of them are children. When what low-income people can afford of these units are one-bedrooms, the city is missing the mark, because most people at risk of being on the street are families."

The rent restrictions imposed by the RTC affordable housing program are supposed to remain for the life of the properties, or, according to deed restrictions that accompanied the sales, for 40 years. But as anyone who's ever driven past an apartment complex knows, who owns a property frequently determines the kind of future it has.

In Spring Branch and other parts of the city, if beat-up apartment complexes are considered hell, the owners are often viewed as the anti-Christs -- particularly if they are owners who live somewhere else. Which makes the city's sale of four RTC complexes to Joseph Guglielmo a bit puzzling.

Not so much because Guglielmo is from Los Angeles, but because that -- and the fact he could rustle up $15 million -- is about the extent of his credentials as an apartment complex owner. Or at least, that's all the city is willing to impart. And attempts to find out more from the man himself are fruitless: his Texas Development Investors, the name under which he bought the city's apartment complexes, has no local address or phone. It doesn't turn up in any of the Los Angeles directory assistance listings, and neither does a number for his Wilshire Boulevard office.

Uzick, who handled the brokering of the city's sales to Guglielmo, admits that the investor doesn't have much experience with residential property. Rather, Guglielmo has been successful in commercial real estate, completing "about $8 million in acquisitions and sales."

Uzick says he visited Guglielmo, who gave him a tour of a few of his holdings, including a movie studio and office buildings in Fresno and L.A. That was enough for Uzick "to verify he had the funds to close the transactions and to renovate."

Apparently that wasn't always the case. California court records show that in the mid-1980s, Guglielmo was sued by two banks for failing to pay back loans totaling $400,000. Newspaper accounts also document troubles the investor had with the Guarantee Building, a historic office building in Fresno.

Last year, the Fresno Sun reported that Guglielmo wanted to sell the building because many of the tenants had moved out or were planning to. The story said the building's management owed Pacific Gas & Electric $13,000 in unpaid utility bills and had not paid a $15,000 deposit.

Another story, this one in the Los Angeles Business Journal, said Guglielmo was part of "several troubled partnerships" with VMS Realty Partners, some of whose dealings were linked to the Prudential-Bache real-estate scandals during the 1980s.

According to the newspaper account, VMS had filed for a Chapter 11 bankruptcy in 1991 to avoid foreclosure on two Wilshire Boulevard office buildings. The paper quoted a tenant of one building as complaining that "everything has become second-rate."

But, according to sources both here and in Los Angeles, Guglielmo's dealings are rarely that public. Indeed, for a wealthy real-estate investor, he is surprisingly inconspicuous as an owner of record. He is registered as a principal in few business entities, according to California corporate records, and those firms don't turn up as owners of much property.

Sources say Guglielmo has a reputation for "tying up" properties through a web of partnerships by buying them and then trying to sell them quickly for a profit. One Houston source says that Guglielmo, prior to buying the four apartment complexes from the city, owned a dozen properties in Houston, some of which he acquired from the RTC. The source said he learned that Guglielmo had traveled as far as Hong Kong in an attempt to sell them.

"He was considered something of a flake by the local real-estate types," the source says.

Uzick shrugs off such reports about Guglielmo, saying he was convinced the buyer would prove a reputable owner. One reason Uzick cites was Guglielmo's willingness to engage a local management company to oversee operations at Willow Creek, Southwest Village and the two Bellfort Southwest complexes. Uzick says he sent the buyer a list of choices. Guglielmo settled on Insignia Management Group -- a firm Duddlesten Management Group merged with last year.

One complex owned by Guglielmo that could use an attentive owner is Willow Creek. The complex was built in 1971 and, over the last decade, has fallen into disrepair. The sheer size of the place -- 1,682 units -- and the magnitude of the rehabilitation needed suggest it has a ways to go before it becomes a moneymaker. And that's assuming the complex, which has a 95 percent occupancy rate and is located in an area of the city that hasn't received much attention, can remain viable until then.

An analysis of the property prepared before the city bought Willow Creek revealed a couple of environmental concerns, including the presence of asbestos in the drywall. Also, leaking underground tanks stored at a Coca Cola bottling plant next door was said to possibly pose a risk of contamination, though there was no mention of what substance might be leeching into the ground beneath the complex.