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

* Did Kelley use his influence to delay a demolition order issued by the Building and Standards Commission in March 1994 until he could secure the earnest money contract on the house?

* Did Kelley attempt to receive free services from BFI, a city contractor whose City Hall public relations liaison, Don Fitch, apparently set up the firm's account to haul trash and materials away from the house while Kelley worked on it?

* And what of Kelley's relationship with Solomon Ventures? He started out as the firm's attorney, but now appears poised to buy a piece of real estate that Solomon's trustee wrestled out of bankruptcy court for a mere $250.

Not long after Wiley Smartt encountered the cycling Kelley and his wife, the councilman showed up at a March 23, 1994, Building and Standards Commission hearing. Woodlands Heights residents testified to the condition of the house at Norhill and 7 1/2, and a city building official recommended that it be demolished.

According to Jan Hirst, Kelley then stood up and said he was representing a "contractor buddy" who wanted to buy the building and renovate it, possibly for use as an "old folks home." Kelley, who had championed the recent passage of an ordinance that offers tax breaks for the renovation of historic properties, also said the house might be of historic value and asked that demolition be delayed until his friend could buy it.

Despite the councilman's comments, the commission ordered that the owners secure permits to begin rebuilding or demolish the property within 30 days. And in May 1994, according to city records, a "demolition hold" was placed on the property -- meaning that the only permit that could be issued was for demolition.

An inspection the following month found the building "vacant and open," a violation of the original order. Yet the building remained standing. It was around this time that Hirst began having difficulty getting answers from the city's Neighborhood Protection office, which administers the dangerous building and demolition process.

"Suddenly, my communication was cut off," Hirst says. "They wouldn't talk to me anymore."

In August 1994, Hirst and her neighbors obtained a letter written by Bill Stephens, the lawyer and aide in Kelley's Council office. Stephens had written the letter to a couple who had shown interest in the property, threatening them with a lawsuit if they attempted to obtain the title to the house.

"My client has engaged me for the last nine months to secure good title for this historic building," Stephens wrote. "... I need documentation as quickly as possible in order to appeal the city of Houston's order of demolition."

Stephens' client was Ray Pratts, who was negotiating the purchase of the property for Solomon Ventures Inc. Stephens told the Press that the house at Norhill and 7 1/2 was a "test case" for the real estate firm, which was trying to obtain the title to that and other property owned by the J.R. McConnell estate.

McConnell committed suicide in the mid-1980s, after his multimillion-dollar real estate empire crumbled. McConnell had taken out multiple mortgages on his properties, and when he filed for bankruptcy, his estate became a legal jungle of fraudulent titles and lawsuits among competing interests.

According to Stephens, he and Kelley were both working for Solomon Ventures on the McConnell properties. In September 1994, with Kelley and Stephens' help, Pratts bought the deed to the Norhill house for $250. Not long after that, Hirst learned that the Norhill house was no longer going to be demolished.

"That's when we knew somebody was trying to stop the demolition," says Hirst.

Hirst found out who last Thanksgiving, when Kelley, his wife and Stephens started showing up at the house on weekends, wearing tool belts and clearing away debris. Still, Hirst says, Kelley denied having an interest in the house. She says Stephens told the president of her civic association that the house was owned by "a public official who does not want publicity."

Hirst's suspicions deepened when, through an Open Records request, she learned that beginning in early December 1994 at least six extensions to the original demolition order were issued to the owner, who was listed as Ray Pratts. Meanwhile, the Kelleys and Stephens continued work on the house, albeit too slowly to suit the civic association.

"He kept telling us another 30 days, another 30 days and it will get done," Hirst says. "But they took the roof off and left it off for months."

Hirst kept pressing city officials to demolish the building or explain why they wouldn't, while trying to prove Kelley owned the building. She figured she got what she needed early last summer, after she became angry about two overflowing BFI dumpsters on the property.

Hirst called BFI, and a woman told her that the dumpsters were ordered by Kelley's law firm, Bradford & Kelley, Bill Stephens and Ray Pratts. She says the woman also told her that the account was set up by Don Fitch, who is BFI's City Council liaison, and that the fees for one of the dumpsters were billed back to the company.

"I said, 'Oh, wow, this is interesting,' " Hirst recalls.
But it wasn't as interesting as a phone call she received from Kelley shortly after she filed her ethics complaint. She says the councilman was agitated and tried to bully her with the threat of a lawsuit. And again, she says, Kelley told her he was merely helping a friend who wanted the property.

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