Lloyd Kelley's Dream House

The controller-elect's fixer-upper is a real sore spot and something of a mystery to neighbors in the Woodland Heights

Dozens of times over the past few years, Wiley Smartt has been asked the same question. He might be taking out the trash or washing his car in front of his Woodland Heights home, when a passerby would stop, point at the old brick house next door and ask:

"What's the deal with that property?"
Smartt would answer that the two-story building at the corner of Norhill and 7 1/2 had long been vacant and open to Mother Nature and drug-dealing riffraff, who had once set it on fire. The eyesore was tied up in bankruptcy proceedings, he'd say, and the local civic association was trying to get the city to tear it down.

So it went one pleasant late-winter day in early 1994, when Lloyd Kelley and his wife, Theresa, stopped to chat with Smartt while riding by on their bicycles.

"Why, you're Kelley the cop," Smartt said, referring to Kelley's old job with the Houston Police Department. Actually, by that time he was Kelley the councilman, having been elected to an at-large post only a few months earlier. Smartt recited what he knew about the run-down property. And after exchanging a few pleasantries with the handsome young couple, he watched them pedal away.

Wiley Smartt didn't get that close to Lloyd Kelley again until the morning of December 12, at a hearing conducted by the city's Ethics Committee. This time, Kelley, who was elected city controller last month, wasn't with his wife or on a bicycle. He was with his lawyers, who were on an angry rampage, accusing almost everyone involved -- including Smartt and his Woodland Heights neighbors -- of a "political vendetta" for suggesting Kelley had used the power of his office to halt the demolition of the house at Norhill and 7 1/2 .

The hearing grew out of a complaint filed against Kelley last June by Jan Hirst, vice president of the Woodland Heights Civic Association, which has been fighting for almost three years to have the dilapidated structure torn down. The civic association thought it had succeeded in March 1994, when the city's Building and Standards Commission ruled that the house should be demolished.

That has yet to happen, and Hirst thinks she knows why.
"What this is really about now is what Lloyd Kelley has been able to do with the system," she says. "I don't think the Ethics Committee is going to enable anyone to tear down this building. But his involvement in this wasn't right, and we felt people needed to know."

Trouble is, the extent of Kelley's involvement is extremely difficult to discern. For much of the last year and a half, since he and his wife laid eyes on their dream house, Kelley has said he's had no ownership interest in the property, but rather was representing a friend who wanted it. But at the initial hearing on Hirst's complaint on October 30, it was learned that the councilman, who was in the midst of a campaign to replace George Greanias as city controller, had claimed ownership of the property on the financial disclosure statement he's required to file with the city secretary's office.

Then, at the December 12 hearing, an attorney for Solomon Ventures, a real estate development firm that is one of Kelley's law clients, produced an affidavit that said the company actually owned the house. The confusion mounted when a Kelley aide said the controller-elect had signed an earnest money contract with Solomon Ventures, and is currently trying to weave through a tangle of legal obstacles to get clear title to buy the house. If and when he succeeds, someone -- either Kelley or Solomon Ventures -- will also have to pay some $20,000 in back taxes owed to the city, the county and the Houston school district.

Kelley, who is usually willing to talk about almost anything -- and rarely measures his words in doing so -- uncharacteristically refused a request by the Press to answer the questions raised in Hirst's complaint. Probably a wise move; a couple of months ago, Kelley told a radio audience that Hirst and her civic club were a "bunch of whiners."

Alan Blakemore, a campaign consultant who is overseeing Kelley's transition from councilman to controller, agrees with that assessment.

"Prior to September, Lloyd had no financial interest in the house," Blakemore says. "You can make this as Machiavellian as you want. But the basic problem the lady has is that she wants it torn down. It's a nuisance to her."

Blakemore acknowledges that Kelley has in fact wanted to own the house since he first laid eyes on it. But the consultant insists there's a huge difference between Kelley's actually owning the property and the fact that he hasn't quite completed the transaction, and that's the difference between a legitimate ethics complaint and Hirst's, which Blakemore dismisses as "ridiculous."

That kind of logic may have something to do with the fact that among the new controller's first orders of business will be an appearance before the Ethics Committee on January 8, a week after he's sworn in.

Among the questions Kelley will be called upon to answer are:
* Why did he repeatedly deny an interest in the property, even after Woodland Heights residents saw Kelley, his wife and his part-time Council aide, Bill Stephens, doing minor repair work on the house?

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