To say that perennial candidate Gary Gates has a difficult relationship with the city of Houston would be an understatement.
Gates, who is running in the Texas House District 28 special election, defaulted on a $1 million loan from the city. He was also sued because of the amount of crime at one of his apartment complexes.
Gates, a multimillionaire landlord, bought Deerfield Apartments, a bankrupt complex, in 1987. When Gates bought the complex it was considered a “Class C” property, filled with older units that needed rehabilitation.
Within a few years, Gates received a $1 million loan from the city of Houston to help pay to rehabilitate the Deerfield Apartments. Gates struggled to make the payments and eventually defaulted on the loan in 2000.
In 2006, Gates negotiated a settlement with the city agreeing to forgive $300,000 in interest and reduce the principal by $500,000 provided he met certain conditions. Chief among those was renting the property to low-income residents at particularly low rates.
A year later, Gates used his agreement with the city as a bludgeon to force the city to withdraw a lawsuit declaring the Deerfield Apartments a nuisance. In 2007, Houston filed suit to close Gates’ complex because of a rampant amount of crime on the property.
“The lawsuit documented 55 offenses on the property over a two-year period, ranging from prostitution and drug offenses to sexual assault and capital murder,” according to a report from the Texas Tribune.
Gates had also been sued by the family of Jose Luis Briones, a 9-year-old who was shot in the back during a 2004 robbery at the Deerfield complex.
Briones’ family accused Gates of neglecting the complex. Gates settled with the Briones for $3,500.
Other Deerfield residents complained about automatic weapons fire and a broken security fence. One resident emailed then-Councilman M.J. Khan to ask for a security guard.
Gates hit the city of Houston with a countersuit. He alleged that City Hall had made “an arbitrary and capricious decision” to single out Deerfield Apartments.
The lawsuit claimed that the city was violating his companies’ right to equal protection under the law and that any requirement his company hires a security guard would amount to an “unconstitutional tax.”
Gates also argued that Houston’s lawsuit breached the loan agreement. The city wound up dropping its lawsuit, but Gates’ countersuit is technically still open — although it’s been inactive since 2014.
Although the city of Houston dropped its 2007 lawsuit, it wouldn’t be the last time Gates would face potential legal action over the conditions at one of his apartment complexes.
There are currently three active lawsuits in Harris County alleging Gates tolerates dangerous conditions at his properties. Two of the cases allege that faulty or poor conditions at his properties have caused injury.
The third lawsuit concerns a robbery and murder at one of Gates’ apartment complexes.
Gates’ habit of getting sued over conditions on his properties prompted Wayne Christian to call him a “slum lord.”
Christian, who beat Gates in 2016 for a spot on the Texas Railroad Commission, asked how “can the people of Texas trust Gary Gates to … protect our communities when he does not even seem concerned about the safety of the tenants who rent from him?”
