San Marcos cracks down on troubled apartments

San Marcos officials have moved to crack down on an apartment complex that they say had become a hub for criminal activity and had a number of units in such poor condition that they weren’t safe for residents.

Sutton Apartments, an 84-unit complex on Linda Drive just off Interstate 35, has racked up code violations, safety concerns and criminal complaints over the past year, with those issues increasing over the summer, the city said.

Only about 15 units at the property remain legally occupied, San Marcos Police Commander Tiffany Williams said, and another 25 are in various stages of the eviction process or are under notices to evacuate. The remaining 44 units are supposed to be vacant, she said.

The apartment complex, which was built in 1970 and previously was called the Nest, is east of Interstate 35 in the Blanco Gardens neighborhood. The property was sold to a group of real estate investors in May 2022, county records show. The property has been operated by a new management company, Bellaire Multifamily, since mid-august.

The months of reported issues at the Sutton culminated in a significant police operation last week, with the city sending 35 to 40 officers to the complex. Officers went through the 44 vacant units, searching for people trespassing and illegally staying there, police said.

A written statement on behalf of Sutton Apartments, issued through a public relations firm, said the complex’s owners and managers “agree with the city that the property has major issues that must be addressed.” The statement said some residents have been relocated from “problem apartments” or allowed to leave without penalty, and “eviction proceedings have been undertaken where appropriate.”

The Sutton’s website still shows apartments currently available, with rents ranging from $1,399 to $2,199 per month.

Problems ‘escalate’

Over the past year, the city’s code compliance team received “consistent complaints from residents” at the complex and attempted to gain “voluntary compliance,” San Marcos said in a written statement.

Williams said code enforcement staffers were working with the previous management company at the property, and in that process, identified potential mismanagement of money. That “did not equate to anything criminal,” she said, but the city began communicating with the owners, who were allegedly unaware of the scope of the issues at the property. The new management company took over in August.

On Aug. 17, after issues “continued to escalate in severity,” the city’s code enforcement and the Fire Marshal’s Office served a health and safety warrant at the property, which allowed inspections of the units in the apartment complex. Williams said those inspections were “very revealing.” The complex was cited for violations included sewage backup, lack of hot water, fire hazards, absence of smoke and carbon monoxide detectors, and missing fire extinguishers, according to the city.

The inspections identified units that needed to be vacated or were empty and required repairs before being leased again. Some tenants left after receiving evacuation notices, while others chose to stay, the city said.

“The substantiated code compliance violations created uninhabitable conditions for tenants,” the city said.

Residents in 14 of the units were given notices to evacuate in late August, said Elizabeth Wills, executive director of the Blanco River Regional Recovery Team, a nonprofit that provides housing services.

Some units were left empty due to evictions throughout the summer, which was related in part to the timing of a change in city eviction regulations, said Williams, of the San Marcos Police Department. The San Marcos City Council ended the city’s disaster declaration due to COVID-19 on June 30, which also ended its eviction delay ordinance. The rule had required landlords to provide tenants a 90-day notice and a chance to pay overdue rent, fees or charges before proceeding with evictions.

Police officers also been called to the area with increasing frequency in recent months, city officials said. Since June, San Marcos police responded to 82 calls for service, most commonly for assaults, weapons concerns and criminal trespassing, the city said.

That pattern continued in the two months after the health and safety warrant was served, Williams said.

The Sutton’s management company suspected people were in the units that were supposed to be vacant, but didn’t feel safe knocking on doors and kicking people out, Williams said. San Marcos police began planning for a “mass presence” and got a criminal trespassing affidavit, giving authority to arrest anyone on site who wasn’t legally allowed to be living there.

On Oct. 13, more than three dozen officers and staffers — from the San Marcos Police Department, city marshals and fire marshals offices, the city ode enforcement department and the Hays County Sheriff ’s Office — arrived at the complex, the city said.

Officers checked all 44 units that were supposed to be empty and found no unauthorized people, but found “ample evidence” that people were living there, including extension cords running from units with power to those without, Williams said. She said there was evidence that people were tipped off when police arrived.

During their operation, police made two arrests, but neither of them were related to the illegal occupation of apartment units, Williams said.

She said the police department was prepared to offer financial help to families who were struggling and in situations where an arrest for criminal trespassing “would not be appropriate,” but said no one requested that assistance.

“These are not families who are down on their luck. These are folks who are exploiting this property,” she said. “It has led to quality of life issues for the entire neighborhood and the residents who are righteously there, as well as legitimate safety concerns.”

Williams, with the San Marcos Police Department, said the city will continue following up on “specific units that we know are tied to criminal activity” and will be working to see if evacuation and eviction processes can be expedited in certain cases.

Patrol officers have been asked to maintain a presence at the Sutton.

In its written statement, the Sutton apartment’s ownership and managers said: “We appreciate the efforts of the San Marcos police to assist in dealing with criminal activity on the site.”

Ownership changes

The Sutton apartment complex is owned by an entity called SWE1518LD Holdings LLC, which bought the property on May 10, 2022, according to the Hays Central Appraisal District.

State records show the company was formed in March 2022. In November 2022, the company filed a document to operate under the name Nest Apartments. In August, SWE518LD Holdings LLC filed again with the secretary of state’s office to operate as Sutton Apartments.

Craig Chase, a real estate agent and investor in Boise, Idaho, was listed in state records as an agent of SWE518LD Holdings. Reached by phone, he declined to comment on the situation at the Sutton.

A form filed with the U.S. Securities and Exchange Commission lists Chase, Chris Miller, and Benjamin and Timothy Cedarland as executive officers and promoters of the company, all with an address in North San Antonio. Miller and Chase are co-founders of Smart Wealth Equity, an “all-inclusive real estate investing platform.” The Cedarlands are the founders of ABG Capital Partners, a multifamily real estate investment company. ABG’S website lists the Nest in San Marcos — the former name of the Sutton complex — as one of its projects.

Bellaire Multifamily, which is based in Dallas, has been managing the property since mid-august. Online reviews identify the previous management as Asset Living, which advertised a job opening for a leasing consultant at Sutton in 2022.

The company, which says on its website it manages more than 200,000 units in 40 states, couldn’t immediately be reached for comment.

Blanco River Regional Recovery Team, which manages federal housing funds, has worked to get residents both into and out of the complex.

Wills, the executive director, said the organization has funding to help pay application fees and security deposits, or to pay for short-term hotel stays when needed. Wills said her agency has paid “quite a few application fees and security deposits at the Sutton Apartments,” some as recently as May.

But in August, Blanco River Regional Recovery Team identified potential fraud, she said. Money from the organization, which cannot legally be used for rent, was being “misallocated on the ledgers in some cases,” she said. The organization stopped helping residents move into Sutton at that time, she said.