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City Council pillories "slumlord" Nine Lives, LLC for profiting off poor conditions

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At Wilmington’s Tuesday city council meeting, council members raked a landlord over the coals for being a "slumlord,” and ordered two of his buildings be repaired or torn down.

Wilmington City Council periodically holds hearings to decide whether to order certain buildings to vacate, close, and be repaired or torn down. It’s a part of the regular process to make sure buildings meet minimum housing standards, and many of these hearings include discussions of helping low-income homeowners make repairs.

But that was not the tenor of the hearings this week. Two properties came before council, both managed by the same man: Jeremy Bailey. Three people have died in these buildings in the past six months, according to Brian Renner, the city’s code enforcement officer.

212 N. 11th Street

Renner through a presentation on 212 N. 11th st., a duplex so badly damaged by leaking pipes that the floor on the occupied upper-story apartment has gone soft. In photos provided to council, the kitchen sink in that tenant-occupied apartment is floating between two cabinets, with buckets underneath to capture the leaking water.

"We can see here the way that kitchen sink is in. He's actually using his cane to balance out that kitchen sink,” Renner said.

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City of Wilmington
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The sink in this tenant-occupied home is partially help up by a cane, and hovers over two buckets.

The unoccupied first-floor apartment was filled with leaking water, to the point it was running out the front, Renner said. When he went to inspect the property the day before the hearing, he saw that a squatter had moved into one of the bedrooms as well.

Water is causing problems throughout the structure: some is leaking from the upstairs shower through into the downstairs unit, warping the floor to the point that it's rotted. And outside, water is running over an electrical outlet.

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City of Wilmington
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Water flows over outdoor electrical components in this photo from 212 N. 11th St.

Councilmembers were uniformly horrified by what they saw, and said so. Freshman councilman Luke Waddell pointed out that the property owner and manager of failed to comply with state law.

"They're having to pay rent to live at this property," he said, "the owner is required by North Carolina law to keep the property in fit and habitable condition if you're going to have a tenant there. [It's the] worst thing I've ever seen.”

After the presentation, Mayor Bill Saffo had to repeatedly ask the property manager, Jeremy Bailey, to step forward to meet the council. He had arrived at the meeting in his Tesla, wearing basketball shorts and tennis shoes, and initially stayed seated when the council asked the property owner to step forward.

When Baily did eventually step up to the podium, he explained that his attention had been elsewhere.

"This was just a subject of us being on another project, and, and me not getting the kind of feedback I really needed to know what was going on at this address. I do apologize," he said. "I'm embarrassed for it.”

Repeated warning, little improvement

But Bailey had been repeatedly notified by the city about the condition of this property. The Aug. 2 hearing was the final notification in a more than year-long process to try to get the property owner to fix the problems. The initial inspection for the property was in April of last year, and the first housing code hearing was in January.

Despite all those notifications, Renner said little has been done.

“We've had multiple conversations with the property manager and their maintenance employee about the conditions on this property, as well as some others. But these violations have persisted. And the unit has remained occupied through all of this," he said. "And obviously, it's deteriorated significantly since we started our case in April of last year.”

Council did not take Bailey’s excuses for the condition of the property lightly. Councilman Kevin Spears confronted him at the stand.

"This didn't just happen overnight," Spears said. "You said he hadn't been paying rent. I don't blame him."

Bailey said he hadn't been demanding rent, and that's why "it kind of just existed."

He added that in the past few months, conditions have gotten a lot worse, and that he was unaware.

Spears pushed back on those excuses. "This is horrible. This is one of the most horrible things that I've seen since I've sat up here, this is downright despicable," he said. "This is — this is a humanitarian issue. You have people, two people died. I'm not saying what I was gonna say but I can understand why. That's not fit for anybody to live in.”

In a case of bipartisan agreement, every member of council expressed similar sentiments. Neil Anderson said, "you're basically a slumlord, and you're just getting what you can get, and doing nothing. And it's profitable for you. And you don't care about human beings, man."

Councilman Charlie Rivenbark compared the conditions to that created by a previous landlord who had come before council.

"I wish there was some way we could sentence him to have to live in one of his units," he said.

The ownership of the duplex is a bit complicated: The trustee on the deed is Devon Bolla, a Californian who appears to be the same woman who has been investigated for identity theft for a scam related to legal services. But the owner of the LLC, ROI Trust, is registered as Megan Kay Lee Jackson. Jackson is Bailey's business partner and is also the registered agent for Colonial Arms LLC, the company which owns 813 Castle, which also came before council. She did not appear in person, however.

Council voted unanimously to give Renner the authority to demolish the building if it's not repaired to minimum standards within 180 days. They also ordered the tenant to vacate within three days, for his own safety.

Colonial Arms

The duplex was not the end of the problems for Jeremy Bailey at that council meeting. Next up was his boarding house, also known as Colonial Arms. Renner pointed to severe electrical safety issues, with loose wires open to the hallways, dark corridors, and a section of the ceiling distended with water from the HVAC system. Rivenbark described the photo as, "like a swimming pool."

Renner went on to describe the building as maze-like and pointed to numerous disturbing problems.

"There is a hole in the kitchen wall that goes into the utility room and the damaged sink fixture in that bathroom," he said.

Bailey suggested he’s been working on repairs at Colonial Arms by tearing out flooring and adding in lights, but Renner said otherwise.

"I've been at this property June 17, July 8, and August 1 and have seen very few changes except for paint," Renner said.

That boarding house was determined to be unfit for human habitation and marked to be vacated in April. But despite that vacate order, Bailey continued to illegally collect rent on tenants there through July.

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Kelly Kenoyer
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Property Manager Jeremy Bailey appeared before Wilmington City Council to defend his derelict properties.

Overall, Bailey had more to say in defense of the boarding house, and said he’s made some significant repairs.

"This building is gonna get a major upgrade and deserves it. It's been needed a long time,” he said. He added that he has intentionally used the building to provide housing to people who may not secure a lease otherwise. "This building in particular has been a stepping stone for a lot of transitional people.”

Bailey and his partner, Megan Jackson, own at least 18 rental properties in New Hanover County between them. And Mayor Saffo wasn’t taking his excuses.

"You've got exposed wiring somebody can get electrocuted. You've got unsanitary bathrooms and kitchens. I mean, do you go in here at all? Or you just say, 'here, give me your money and just walk in the door?'" he asked Bailey.

Saffo added, "Because it looks it sounds to me, that's what you're doing. You're just taking the money. You don't even care what the heck's going on inside. Unfortunately, you give him property owners and property managers a bad name. This is horrifying, man.”

Council voted unanimously to give Brian Renner’s office the power to vacate, close, and demolish Colonial Arms within 180 days if the repairs aren’t made. And council members suggested they'd like to take the bulldozer to the buildings themselves.

All the attention on these two properties gave Rivenbark some other ideas, which he directed at Renner. "Does this raise a red flag for your office? I mean, are you looking at their other stuff?"

Renner responded that his inspection office is aware of several of Bailey's properties, and that one of the others — a duplex, would come before Council in the coming months.

Click here to view the full public hearing, and select PH4 and PH5.

Kelly Kenoyer is an Oregonian transplant new to the East Coast. She attended University of Oregon’s School of Journalism as an undergraduate, and later received a Master’s in Journalism from University of Missouri- Columbia. Contact her on Twitter @Kelly_Kenoyer or by email: KKenoyer@whqr.org.