Austin controversies

Liberal death match: Nau’s Enfield Drug and the Old Austin Neighborhood Association

May 31, 2016

Take a careful look at the once grand — OK, reasonably nice — and now profoundly dilapidated house below:

611 west lynn

Yes, Virginia, it is a dump, an eyesore, and a pox on the landscape. Yet the amateur preservationists at the Old West Austin Neighborhood Association, your Editor’s “own” neighborhood association, believe that the owners of this fire hazard should be deprived of the right to sell the valuable lot to a developer who might build something nice on it.

Because that would “change the character” of the neighborhood, itself a silly notion in a neighborhood that is a wonderful eclectic mix of new and old houses, apartment buildings, townhouses, and commercial buildings. The character of Old West Austin is its ever-changing diversity of architecture. Preservation for its own sake is not this neighborhood’s friend.

And, no, the house in question isn’t even “old” by the standards of much of the country, having originally gone up in 1890. The house is of no known historical or architectural significance.

Ordinarily, neighborhood busybodies destroy property rights without compunction simply because they can, but in this case there is a complicating consideration: It is owned by the same family that owns Nau’s Enfield Drug, an ancient and old school pharmacy with an actual soda fountain that everybody reveres and almost nobody patronizes. Nau’s is a genuine local landmark, having supported our neighborhood, which until quite recently was not so nice, since the 1930s. Sadly, Nau’s is now losing money, or making so little that it cannot sustain its owners (the Labay family), because much nicer places making much better food — yes, that must be said — have eroded the lunch counter trade, and other retailers, including HEB, chain pharmacies and convenience stores, have killed the rest of its business. Affluence has all but done in Nau’s, just as it has made the .62 acres underneath 611 West Lynn Street more valuable by an order of magnitude.

The neighborhood hanky-twisters purport both to love Nau’s, even if they don’t actually buy anything there, and to prefer the Labay family’s unairconditioned and collapsing house over literally anything else that might be built there. Since the sale of the latter is considered essential for the survival of the former (please do not ask us to explain that reasoning, we only report on the Austin liberal’s mind), this has put the Old Austin Neighborhood Association in to a defensive crouch. And, as everybody knows, an activist’s defensive crouch is comedy gold for normal people.

First up, one Rosemary Merriam, bold emphasis added:

“OWANA has long opposed the demolition of this house,” Rosemary Merriam, then the chair of the Old West Austin Neighborhood Association, told the Historic Landmark Commission on Jan. 25. “We think it has considerable historic value to our neighborhood, and we support the (city) staff’s recommendation that it be given historic status.

“I sympathize with the Labay family,” she said. “I understand the expense. We also pay taxes in our neighborhood, which are extraordinary.”

Ms. Merriam claimed the needed repairs are mostly cosmetic (something Labay disputes), and, she said, “I’ve never seen any attempts at major upkeep” on the house. Labay told the commission the family can’t afford the repairs.

Merriam knows not whereof she speaks. Or maybe she is being disingenuous. Your Editor has twice renovated — or underwritten the renovation of — old homes of roughly the same vintage (1870 and 1900), including one in Austin. It would cost at least $1 million to bring that house up to snuff, by which we mean to suitability for occupants willing to pay $1.5 million for the lot under it, the current appraised value. The house in question does not have air conditioning. This is Texas. When the hapless contractor rips off the walls to install HVAC, he will find that the wiring is dangerous, the plumbing is shot, and that raccoons have been living in the walls for seven years. It will be re-framed, rewired, and plumbed room by room, floor by floor. No doubt all of the windows will need to be replaced — we guess that expense alone would exceed all of the profits of Nau’s Enfield Drug for years. And we shudder to think what the bathrooms and kitchen will cost for a house that needs to be worth $2.5-$3 million when finished.
Point is, Ms. Merriam is either entirely ignorant of such things, or disingenuous. We suspect the latter. (And this rather brilliant letter to the Statesman agrees.)

Ms. Merriam is, however, an economic genius compared to this dude:

Alexander Shoghi, who is doing a substantial rehab work on an 1890 home across the street from the Labays’ vacant house, told the Historic Landmark Commission that allowing demolition of 611 West Lynn could “set a very dangerous precedent where a person can choose to not reinvest in one’s property, not maintain it to the point of it becoming uninhabitable and then eventually be able to sell it at a higher profit than would otherwise be available had they maintained it.”

Never mind that the trucks supporting this guy’s renovation — which we are certain has exceeded $1 million and probably $2 million — has been snarling morning traffic on West Lynn, your Editor’s regular commuting route, for at least the last year, that may be the most economically illiterate thing ever said by somebody who is not Bernie Sanders. It takes decades for a house to fall in to this level of disrepair. The economic value lost in that period would vastly exceed the upkeep, never mind the wear and tear on the people who have to manage the mess. People with once nice houses do not let them deteriorate to the point of collapse because they are long-term investors. They do so because they do not have the money to keep their house up. The argument that the Labay family let the house fall apart because they were hoping for a killing in real estate is so silly we’re surprised Milo Minderbinder didn’t think of it. And we know Shoghi is disingenuous, because he is a rich guy who used to work for Lehman Brothers. Investment bankers are first and foremost salesmen, and Shoghi is definitely selling in this case.

We have only the greatest sympathy for the Labay family. This is Texas, and ought to be a free country. They should be permitted to sell their property to a developer who will build a beautiful even if new home or homes on the land, whether or not they use the proceeds to keep Nau’s going. As for Old West Austin? We could do with fewer power-crazy control freaks.

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  • Reply Tex Lovera June 1, 2016 at 8:56 am

    Damned straight.

  • Reply LC Aggie Sith June 1, 2016 at 9:04 am

    Seems to me the OWANA need to watch a few episodes of Rehab Addict and get educated on the process.

    Seriously, it seems like OWANA and the City of Austin are being dictatorial in regards to someone’s property. One wonders what the association hopes to gain.

  • Reply D June 1, 2016 at 10:40 am

    Just start having big barbecues and parties and inviting the wrong sort.

  • Reply Shamus McGilicutty June 1, 2016 at 10:48 am

    Sounds like it would be a real shame if it just fell over one windy night.

  • Reply Jim June 1, 2016 at 1:56 pm

    I predict a mysterious fire….

  • Reply Strelnikov June 1, 2016 at 2:00 pm

    Austin is no longer part of Texas. It is an adjunct of San Francisco.

  • Reply Oldav8r June 1, 2016 at 2:17 pm

    Simple solution: OWANA buys the house for $1.5MM and rehabs it.. If you’re not willing to step up and do that then stop trying to spend other people’s money.

  • Reply John Reece June 1, 2016 at 2:18 pm

    It seems likely to me that Alexander Shoghi, as a contractor doing million-dollar rehabs, has enough capital to make a handsome profit by flipping the eyesore. Especially since as contractor he would be getting it done wholesale. So why hasn’t he stepped to the plate?

    • Reply Editor June 1, 2016 at 2:23 pm

      Shoghi is not a contractor, he is a private investor with a career history as an equity capital markets institutional sales guy. At least judging from his online information…

      • Reply Marty Johnson June 2, 2016 at 10:27 am

        But even so, other than the “getting it wholesale” part, John Reece’s logic seems correct.

        It is never used but a fair way to handle things like this is for someone (Shoghi, or some other entity committed to rehab rather than tear-down) to get a right of first refusal on any sale. The Labay’s put it on the market, and once they get an offer they would accept, the other entity has some specified period of time (and not a lot as that would degrade the value… maybe a week, which is plenty as said entity should already have had an appraisal and lined up their credit) to match that offer.

        The reason that isn’t used is, I think, that it defeats the whole purpose of bossing other people around with no consequences on the boss-er.

  • Reply Pettifogger June 1, 2016 at 2:44 pm

    Austin is part of Texas only in the technical geographic sense. Culturally, it is more tied to the Bay Area or perhaps the D.C. suburbs.

    Imagine the horror of living in Austin. When there, you are entirely surrounded by Texas.

    • Reply Editor June 1, 2016 at 2:46 pm

      Austin is much easier to handle with Texas surrounding it… But you are at least hinting at the meaning of “Blueberry Town”…

  • Reply Joe Bloe June 1, 2016 at 2:54 pm

    And the apartment building across the street, with a dumpster at the street, behind the fence, is the kind of character they are preserving?

  • Reply Just glad I don’t live in Austin | David Knights' Weblog June 1, 2016 at 3:24 pm

    […] Example 2. […]

  • Reply Tight5 June 1, 2016 at 3:25 pm

    When I see a story like this my first instinct is to check out google’s Street View of the surrounding neighborhood that so desperately cannot afford to have it’s character changed by the replacement of one house. As Mr. Bloe hinted above, generic ’70s apartments, some modern looking apartments, some weird walled compounds and a lot of smaller, architecturally insignificant looking houses in various states of upkeep. Yet another story confirming my observation that homeowners’ associations, historic committees, library boards, etc. are the incubators of petty tyrants who can only maintain any self esteem through sticking their noses into other people’s business.

  • Reply Ivar Ivarson June 1, 2016 at 4:47 pm

    Just publish a story that Donald Trump is going to stay overnight at this derelict and have a campaign rally first thing the following morning. The local LibProgs will peacefully toss Molotov cocktails through the windows and burn it down within hours because “hate speech” (i.e. anything they disagree with). Lot available for rational development and problem solved! Yes, it will be blamed on Trump’s ‘devisiveness’.

  • Reply Tina June 1, 2016 at 7:17 pm

    This is an excellent example of the wisdom of the phrase “It is better to ask forgiveness than for permission.”

  • Reply Joe June 1, 2016 at 8:27 pm

    It would be a real shame if that home was destroyed by a fire.

  • Reply eric ashley June 1, 2016 at 9:13 pm

    I remember standing one day in a 101 degrees in Texas. It felt like hammers were falling on my head. Just out of simple human decency, let these people have some air conditioning!

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