After hundreds of issues with landlord Ray Peterson’s properties and years of prosecution, the city of Madison intends to file a public nuisance action against him to try to force his properties into shape.
City Attorney Michael May and Assistant City Attorney Jennifer Zilavy sent a memo Tuesday to Mayor Paul Soglin and the City Council laying out their plans to file the motion 15 days from the notice. If successful, May said, a receiver would take control of Peterson’s properties and bring them up to code, possibly selling the properties to cover those costs if necessary.
“I think we had just kind of reached a tipping point,” May said. “We were having difficulty collecting the money and more and more cases and more and more citations. The thought was that so much staff time and action and energy is being used on the Peterson properties that maybe there is a way in one big action to take care of the problems.”
Peterson, who is 90, owns 44 properties throughout the east side of Madison, including his own house and a few vacant properties. His properties are valued at more than $6.5 million in 2015, according to city assessor records.
Peterson has had longstanding and consistent issues with his properties, drawing 71 building inspection complaints in 2014. And a 1990 Wisconsin State Journal investigation found that he had the most complaints per landlord that year.
From May 1, 2010, through May 1, 2015, there have been 277 building code cases generated against Peterson, involving 1,311 violations, according to the memo.
“Mr. Peterson has violated the City of Madison building code ordinance hundreds upon hundreds of times and the City fails to see even a minimal improvement in the manner in which Mr. Peterson maintains and manages his rental properties,” the memo says.
Building inspection has referred many of those cases to the city attorney’s office, which issued 29 cases in 2014.
In a recent ruling, Judge Daniel Koval issued a judgment against him of $455,848 for a case combining 10 complaints. That brought the total amount Peterson owes the city in outstanding judgments to $669,991, according to the memo.
Peterson has said the city is targeting him and believes he is providing a service for those who might otherwise be homeless. He doesn’t believe his properties are rundown and has said he has a difficult time keeping contractors to do the work the city requires.
The city has rejected that idea and plans to force his properties into compliance with this action, which May said could be faster than other alternatives, like waiting for Peterson to sell.
"We were concerned that any of the other remedies could take who knows how long," May said.
If the action is successful, a receiver is appointed by the court and takes control of the properties, making improvements to bring them up to code. The receiver could then either charge that cost against the properties, be paid by the owner or ultimately sell the properties to a third party to recover the costs, May said.
“It’s a way to take control of property that’s deemed a public nuisance and bring it up to a stage where it is no longer a public nuisance,” he said.
He’s not certain if they’ll include every property Peterson owns in the motion, “but certainly many, many of them,” May said.
Tenants, however, have raised concerns prior to the memo about where they would go if the properties are sold. While many had significant issues with Peterson, they felt they were left with few options in Madison’s housing market due to bad credit, homelessness or eviction records.
If the properties are sold, May said the tenants would be allowed to stay until their lease term expires.
“(The) idea is that there would be no impact on the tenants, except maybe their house would get fixed up,” May said.
Once those leases expire, however, it’s uncertain whether a new property owner would continue leasing to those tenants, or at what price.