Shifting Foundation

Two decades ago, the Burkitt Foundation saved the historic enclave of Hyde Park. But now the foundation is pulling out, and Hyde Park -- as well as many of the social service agencies it houses -- may really become a thing of the past.

According to Joseph Ryan, such grants "appear to be inconsistent with the stated goal of the foundation." And according to the foundation's guidelines for submitting proposals, it "seeks to foster and promote the interests of Catholic educational organizations and other Catholic activities." Yet the articles of incorporation are so broadly drawn as to permit donations to almost any nonprofit organization. "That's because a lawyer drew the charter," explains William Ryan. "You don't want to draw them narrowly, you want to draw them broadly, which gives you the ability to change your mind and do something different."

That's just what the directors did when they decided to sell the houses they had been amassing for two decades. But almost as curious as the decision to sell was the decision to buy in the first place. Real estate is not the most common form of investment for foundations -- tenants, maintenance and taxes can put a strain on foundation management.

C.O. Ryan admits that the foundation never fully articulated its goal in amassing its properties. And while they didn't have much connection with Bess Burkitt Crane, who lived in Westmoreland, they did, through the yellow Victorian that had been the longtime Ryan home, have a connection to the Ryans. In 1982, the Ryans sold the Victorian to Covenant House, a shelter for troubled teens. Then in 1985, Covenant House sold it to the Burkitt Foundation.

Meanwhile, the whole area had gone into a slide. Throughout the '70s, homeowners had moved out and tenants had moved in. "What we figured," C.O. says now, "was that if people just came in and bought up those properties they'd tear down the nice old houses there and put up a lot of cheap apartments and it would turn into a slum."

So the Burkitt Foundation stepped in as a savior, protecting the homes while allowing them to house nonprofit organizations. "The only way the Burkitt Foundation could justify buying and holding these properties," C.O. says, "was to devote them to charitable uses." That kept the properties largely untaxed (only one, the Firehouse Community Center, fails to meet the stringent requirements for charitable use exemptions). It also kept the properties from being counted as part of the foundation's investment base, 5 percent of which must be given away each year.

Now, says C.O., "We could do more with the money that we get out of selling." Or put another way: Now that the Montrose real-estate market is headed in the right direction, the foundation is willing to bid the neighborhood good-bye. The foundation's two directors who don't live in Houston -- particularly, C.O. says, Bishop John McCarthy of Austin -- are proponents of the property sales.

William Ryan says it's his "understanding" that the houses won't be torn down. Last week, though, surveyors working for Perry Homes visited one of the Commonwealth houses. Demolition, they said, is next on the agenda.

Meanwhile, Robert Ryan has told some people that the old Ryan home, the yellow Victorian, will be moved to Sam Houston Park, though that was news to Jane Ellen Cable, the woman who runs the historical park. But whether the Hyde Park houses are moved or demolished, the likelihood is that they will be replaced by high-density housing. And area residents aren't happy about it.

Nor are they happy about losing their neighbors. While over the years Montrose residents have complained about some of the shelters and social services in their midst, the Burkitt enclave has maintained a quiet harmony with its community.

"They are the dearest neighbors," says Pat Teer, the Original Hyde Park Civic Association's block captain for the cul-de-sac. "They're really a tribute to our neighborhood. They keep up their property."

Over the years, the foundation has spent thousands of dollars to fix up and maintain the homes -- $142,000 on taxable improvements alone. Still, with tenants themselves responsible for many types of repairs, the upkeep was not a financial albatross. Last year, the foundation spent only about $50,000 -- one-half of 1 percent of its total assets -- on repairs and maintenance.

But despite the money invested in the houses, C.O. says the foundation never wanted to be "permanent landlords." The foundation, he says, has made the decision to sell. And the decision is final.

When signs reading "Ryan's Real Estate Brokers" appeared in front of the Hyde Park houses, neighbors questioned the propriety of the foundation paying a broker's fee to one of its president's sons (though it's legal to do so). For that matter, some wondered what influence the real-estate Ryan might have had in the decision to sell.

People who have known Robert Ryan over the years describe him as a wheeler-dealer. In the 1980s, he did business with real-estate rogue J. R. McConnell, who ended up electrocuting himself in jail while awaiting trial for fraud. Robert even purchased some properties from McConnell for the Burkitt Foundation. In one lawsuit (from which he was eventually dropped), Robert was accused of fraudulently borrowing money and falsifying tax returns for McConnell.

In another lawsuit, Robert was accused of forging a deed purportedly signed by his longtime lover, Eugene Checchi, awarding him the title to the home they shared. In turn, Robert accused Checchi's cousin and guardian, Natalee Holmes, of forging a deed that gave title to Checchi. The judge ruled that Holmes had the valid document.

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