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In October, Mary J. Strauss and her husband Patrick B. Strauss stood up at a Presbyterian church near their $1.6 million home in Chevy Chase, D.C., and testified about their faith.
She grew up Catholic, he Southern Baptist. The couple recounted their passion for good works: preparing sandwiches for the homeless, making a “T-shirt memorial” for victims of gun violence, even helping a Syrian refugee with dental problems. They volunteered. They gave thanks.
“I’m excited to help plan things that make our community stronger,” Mary told the congregation. “I feel like I’ve found my team, where we all have a part to play in the effort to make this world more like the place God wants it to be.”
Yet on the other side of the District, low-income tenants across more than 1,300 units owned by Sanford Capital—the Bethesda-based company Patrick co-founded in 2006—reside in living hell. Bedbugs, faucets that run feces-stained water, vermin, vacant apartments left open to squatters, and no heat or air conditioning are common at its buildings.
Although Mary Strauss says she’s never interacted with any Sanford Capital tenants, two people City Paper interviewed contradict that claim. They live in Sanford buildings above the Congress Heights Metro station and recall encountering both Strausses at a community meeting almost four years ago.
At that meeting, one of them, Robert Green, shared his nightmarish experience of living in the company’s property. Mary Strauss came up to him afterward, he says. She reminded him of Katharine Hepburn, a “charmer” with her looks and voice. “‘Things are going to change,’” Green recalls Mary saying. “‘I’m going to get involved and get things done. Me and my husband are really concerned about people and how they live.’”
He says Patrick then approached, requested a list of Green’s problems, and promised to stay in touch. Green and Mary exchanged numbers. He recalls her characterizing him as “‘one of the good tenants’” and telling him that he could call anytime. “I don’t know what that number was because nobody ever answered the phone,” Green says, laughing. “It wasn’t nobody at all.”
Green and fellow tenant Ruth Barnwell, as well as their attorney Will Merrifield and tenant advocate Caroline Hennessey, all remember a second meeting Patrick Strauss attended. It took place in the basement of the Congress Heights property in May 2014. Again, the tenants asked for improved conditions, and Strauss promised to make repairs. “He just blatantly told a lie in front of all of our faces about what was going to be done,” Barnwell says. “It never happened.”
City Paper reporting shows that Patrick and Mary Strauss signed loan agreements for 17 of 19 properties Sanford has procured since the company’s founding. In almost every case, the Strausses signed as members of an entity called Incyte Capital, which was incorporated in 2000. Bethesda resident Aubrey Carter Nowell also co-founded Sanford and signed those mortgages as a member of various LLCs.
Over the past three years the Strausses have struck out on their own in real estate. Mary has approached tenants at at least four properties the couple was seeking to acquire—one of which they ultimately did, and flipped, after emptying it of residents. Tenants say she has offered some people as little as $2,000, dramatically less than industry standards, to forfeit their rights to buy buildings under D.C. law.
Sanford Capital currently owns more than 65 buildings across D.C. Most Sanford tenants are black or Latino, low-income, or working-poor. Many pay full rent, while more than 330 receive government housing vouchers totalling an estimated $3.7 million a year—taxpayer money that directly subsidizes Sanford.
D.C. Attorney General Karl Racine has sued Sanford Capital over conditions at two of its properties, and Mayor Muriel Bowser’s administration is now inspecting the company’s portfolio. Just last week, Racine motioned to add Nowell and Sanford’s head property manager Todd Fulmer as defendants in one of the lawsuits, potentially making them personally liable for damages.
The Strausses have largely avoided scrutiny for their role in the company. Neither is named in the attorney general’s litigation. A spokesman for Racine says Nowell told city lawyers that Patrick Strauss was no longer with Sanford.
But last May, the Strausses signed a refinanced EagleBank mortgage for Terrace Manor, a Ward 8 complex subject to Racine’s litigation. The refinance followed his first complaint against Sanford that January, and the original mortgage stipulates that the site be kept “in good condition.” By May, D.C. had cited the company with 129 housing code violations at Terrace Manor—25 of which posed a “serious threat” to tenant safety. Forty-seven of 61 total apartments were vacant.
Patrick Strauss did not respond to requests for comment. When City Paper called Mary Strauss last week to discuss her and her husband’s involvement with Sanford, she said she could not speak because she was “hoarse” and “sick,” but requested an email.
In a written statement, Mary acknowledges that she and her husband co-signed acquisition loans for Sanford properties. She adds, “I have never had any role, official or unofficial, with the company or how it is managed. My husband has not been involved in the management or operations of Sanford since approximately 2012.”
That appears to be false. City Paper obtained a 2014 tax-certification affidavit that Patrick Strauss signed as a principal of Sanford Capital, in addition to October 2014 emails between him and D.C. officials regarding Sanford’s redevelopment plans for its Congress Heights property. In them, he used his Sanford Capital email address.
In response to a follow-up email about these documents and the recollections of Sanford tenants that they had met her, Mary only addresses the latter. She says she attended a community meeting in Ward 8 “a number of years ago” and does not “remember anyone approaching me to try to discuss anything having to do with Sanford.”
Patrick Strauss is a serial entrepreneur, but at least three of his business ventures have met legal trouble. In 2011, the federal government alleged that Patrick and his father Michael Strauss “promoted and sold several fraudulent tax schemes, including sham cemetery investments.” Patrick settled the case without admitting to the allegations. Years earlier, a business associate accused Patrick of violating an oral agreement to share profits. The associate won the case, but Patrick prevailed on appeal.
The Strausses have recently been involved in real estate in Brightwood Park, a frontier of gentrification, as well as Woodley Park, a neighborhood with stable, high rents. Property records, business registrations, and interviews show the couple has targeted buildings in deep disrepair. In all cases, current and former tenants report feeling that Mary deceived them, as her actions gradually proved to contradict her words.
One property consisted of two buildings at 9th and Gallatin streets NW, which the Strausses bought for $3 million around the end of 2014 from David Nuyen, one of D.C.’s most notorious slumlords. Nuyen was sentenced to two years behind bars in 2001 after racking up over 2,000 housing code violations, fabricating lead paint disclosure forms, and misleading investigators. (In an interview, he once called black residents “dirty.”)
Nuyen gave the Strausses an unsecured $1.5 million loan to purchase the buildings, while EagleBank, which has provided more than $46 million in debt financing to Sanford, initially loaned them $2.1 million. The couple sold the property, which contained more than 30 units, for $5.2 million about a year later.
Marta Buruca lived in apartments at both buildings over 16 years and served as tenant association president. Speaking through a Spanish translator at her daughter’s apartment, she says it took between four and five months for the Strausses to buy out all the residents. Buruca says the couple paid most tenants no more than $25,000 to leave but paid leaders of the tenant association much more.
Although Mary Strauss wasn’t “aggressive” and “never treated anyone badly,” Buruca says she was persistent. “She would come every day, and she would bring these papers for people to sign,” Buruca says. “Once she got one person, she would start calling a new person, and she would just keep making all these calls.”
A couple of things about the situation rub Buruca the wrong way. She says Mary recruited two tenants to help convince others to take her offers, paying them up to $50,000 and giving them three months of free rent. Upon learning of the $5.2 million sale price for the property, Buruca becomes apoplectic. “It makes me feel defrauded … mad and sad.”
The tenants, many of whom were immigrants, didn’t know about Sanford Capital or the Strausses’ background, Buruca adds. “What we knew is what they told us in meetings: that they wanted to help us, by offering us money to not live in these bad conditions anymore.”
She continues, “I don’t have an idea of how much she offered to everybody in total. The only thing I have is that … for some people who have come to this country, they’ve never had $10,000 or $15,000 or $20,000 offered to them, so they take it and they run.”
Whether the Strausses are to be praised for their tenacity or criticized for their tactics depends on who you ask. “They’re in the displacement industry,” says Rob Wohl, a tenant organizer at the Latino Economic Development Center who has worked with residents at three properties the couple has sought to purchase. “They either take advantage of people not knowing who they are and by bedazzling them, or by hoping people will get hopeless [about their living conditions] and take disadvantageous buyouts.”
But real estate professionals have lauded the Strausses. In a February 2016 press release, firm Greysteel touted the fact that the 9th and Gallatin street property was “tenant free,” making for a “unique investment opportunity.” “The owner’s ability to do this created tremendous value for both parties in the transaction by eliminating complications associated with the District’s Tenant Opportunity to Purchase Act,” it said. TOPA gives tenants the right of first refusal when their apartments go for sale and is designed to prevent landlord abuses.
Despite their claims of no lasting association, it appears the Strausses’ connection with Sanford Capital is starting to catch up with them. Last year, the couple failed to acquire an ailing, six-unit building in Woodley Park, where Amanda Gant lived and served as president of the tenant association. Mary Strauss canvassed the building in June and by July was following up with perfunctory emails to tenants, who were paying between $500 and $950 a month in rent. Two units were vacant.
She initially offered $12,000 for the tenants to assign their TOPA rights to her and to move out. That’s when the calls started coming. “She was testing the waters,” says Gant, who never met the Strausses in person. “I kept it vague and just hung up.”
Another interested buyer contacted the tenants and tipped them off to Patrick Strauss’ role at Sanford. “After talking a couple of times, he said, ‘I don’t think you want to do business with them,’” Gant remembers. “‘Do your Google search.’”
Google the tenants did, but they held what they found in their back pockets while the Strausses entered a two-week bidding war with the other interested buyer. At the end of it, the Strausses were offering $28,000 to buy the tenants’ TOPA rights, $3,000 more than their competitor. The tenants deliberated and decided not to go with the Strausses. In August, they signed agreements with the other bidder.
“I think they were trying to do a divide and conquer, trying to sweet talk and figure out how much they could pay each person to get what they wanted,” Gant says. “I wouldn’t do business with these people just out of my conscience. But we also felt it would be riskier to do business with them. How do we know we’ll get our money, or they won’t kick us out or litigate us all the way?”
Did the tenants feel like they dodged a bullet? “Those are the exact words we used,” she says.
Last fall, Arthur Williams was minding his own business when he got an unexpected knock on his door.
He’d returned to his one-bedroom apartment at 5509 9th St. NW in August after six months of chaos. Conditions at the building were so bad that the city condemned it in March and moved Williams and his neighbors into hotels. The city conducted repairs and reopened the building.
It was Mary Strauss who stood on his threshold, Williams recalls, but she only introduced herself as “Mary.” “No card, no nothing,” says Williams, president of the building’s tenant association. “She gives you this little letter with no heading on it.”
Mary told Williams she wanted to fix up the property, offering to buy his TOPA rights for $5,000, let the tenants stay, and keep rents the same. But the TOPA offer seemed pathetically low to him: The estate that controls the property had offered $20,000 for remaining tenants to move out as it began to market the building for sale.
“I knew something wasn’t right,” Williams says of the short conversation, adding that his neighbors also received Mary’s elevator speech and worried they would one day be driven out.
As recently as a couple of months ago, Mary returned to the building and again caught Williams off guard. This time, she brought her husband. Williams was on his way out when he saw the couple meeting with tenants in the first-floor hallway. He warned them not to sign anything.
“Then Patrick got a little huffy,” Williams says. “He was trying to raise his voice to drown me out as I was talking. But I raised mine a little louder to complete what I was saying.” A red flag for Williams was when the Strausses said they didn’t want to meet with any legal representatives for the tenants—only the tenants themselves.
After the meeting, the daughter of another tenant distributed a 2015 Washington Post article on the Sanford Capital complex in Congress Heights where Robert Green and Ruth Barnwell live. The article identified Patrick as “a principal of Sanford.” The tenants of 5509 were shocked.
Mary later called Williams to ask if the residents would work with her. He told her no and brought up the situation in Congress Heights. “Then it got kind of quiet,” he says, adding that he doesn’t recall if Mary said anything in response during the conversation. Williams hung up the phone.
“I was done with them,” he says.
When Mary began meeting tenants at 220 Hamilton Street NW about a year ago, some were charmed. “I mean, anybody can fall for her because she goes up to you in a very polite manner,” says David, a tenant who offers only his first name. “She’s always sweet.” Maurice, a resident who has taken to repairing the dilapidated building on his own, also remembers her as very civil.
The two men say the trouble with Mary came later. At first she told them that all the current tenants could stay and that she would make desperately-needed repairs, they explain. But after the tenants formed an association, she began calling some and offering them money to move out. She offered David’s family $5,000 to leave. They said no. David says she offered another tenant just $2,000 to move.
The tenants decided Mary was untrustworthy. The building was for sale and they had the first right to select a buyer under TOPA. They met with candidates and chose a company called MED Developers. But when the existing owner suddenly declared bankruptcy, their work went out the window. In an intense auction in bankruptcy court, MED lost out to a third-party purchaser, Vivienne Awasum, by $10,000.
Oddly, Mary Strauss was talking outside the courtroom with Awasum that day, and she stayed to watch the proceedings. The tenants felt doubly deceived when they learned this through their pro bono attorney Amanda Kleinrock of Georgetown’s Harrison Institute. Now they want to know: Is Mary still involved in their building? In court on March 2, Awasum testified that she was the sole owner of the LLC purchasing 220 Hamilton. But Awasum obtained that LLC from Mary Strauss, and official documents describing the LLC show that Awasum became its registered agent on March 14—12 days after she testified in court.
Awasum’s attorney Steven A. Loewy says in an emailed statement that Awasum is the sole owner of the entity in question and that “there are no other parties that share in the ownership or that share in any of the profits or proceeds if the property is sold.”
It’s been a long haul for the residents of 220 Hamilton. One of D.C.’s most prolific slumlords, Rufus Stancil, had owned the property since 1996. Now in his 80s, Stancil was ordered to live in one of his own decrepit buildings for 60 days after pleading guilty to 70 housing code violations in 2001.
David has lived at 220 Hamilton for 17 years, and Maurice 30. They say most tenants have been living there at least a decade. They do not know what will happen next.
As for Mary Strauss’ dealings with tenants, she says she feels she has acted appropriately.
“It is a priority for me to be honest and treat people with respect in all aspects of my life, and would be surprised and saddened to hear that someone who interacted with me felt otherwise.”