Douglas T. “Chase” Fonteno is the headache that won’t go away for Dallas authorities. Beyond his empire of adverse-possession slum houses, he also has effectively blocked city efforts to redevelop several acres of real estate at a commercially strategic intersection south of downtown.
Nine years ago, Fonteno and his associates acquired a dilapidated 228-unit apartment complex in South Dallas known as Summer Breeze. In his big-talking, wheeler-dealer way, Fonteno promised on his company’s website to renovate the complex and give it Miami pizazz — palm trees, water features, landscaping and updated amenities.
He dubbed the new venture Tuscany Palms and listed himself as the company’s president and sole director. But as Fonteno has done in other real estate ventures, he shuffled deeds and mortgage trusts back and forth among various entities, all of which led back to the mailing address of Fonteno’s parent company, Hilton Head Properties.
These paper trails typically lead to confusion. At one point in 2010, Fonteno, as president of Summer Breeze, foreclosed on Fonteno, as president of Tuscany Palms. Who knows why? He hasn’t returned repeated phone calls seeking comment over the past 18 months. The foreclosure happened as he was preparing a bankruptcy filing to forestall city demolition orders on the derelict complex.
This saga began in 2005, when Summer Breeze and Hilton Head promised a $2 million investment “with the goal of creating a unique environment in affordable housing” on Hatcher Street at S.M. Wright Freeway. Instead, the companies perpetuated — and allowed to further deteriorate — a sprawling, partially boarded-up magnet for drug users and vagrants.
Fonteno launched this venture almost simultaneously with Hilton Head’s debut on the Dallas real estate scene. Touting entrepreneurial success, he moved into spacious offices with panoramic views on the 38th floor of a downtown office building. A press release proclaimed Fonteno one of Dallas’ “hottest CEO bachelors.” It made no mention that he was a felon convicted of securities fraud.
Much of what he portrayed as entrepreneurial success involved acquiring scores of houses by filing legally dubious adverse-possession deed claims. He would offer other people’s houses for sale, apparently hoping that neither the legal owners nor the purchasers would detect that he had no authorization to do so.
While Fonteno cultivated a highflying image, residents at Summer Breeze were coping with water and gas service that had been cut off because management didn’t pay the bills. Elderly resident Flossie Crane told a Dallas Morning News reporter in 2006 that her water supply consisted of a bucket filled from a neighbor’s hose.
Years passed, during which a new owner briefly stepped in. But Fonteno foreclosed and regained ownership. All the while, city citations piled up. In 2010, the city finally sought and obtained a demolition order. Fonteno’s company filed for bankruptcy, which blocked the demolition.
“Every time we were close, the majority owner would file for bankruptcy protection,” then-assistant city attorney Melissa Miles complained at the time.
But Fonteno behaved as if “he” were the injured party. “The city has gone so far beyond what is allowed, it’s nuts,” he complained of the demolition effort. It’s as if keeping a slum intact was better than admitting defeat.
“Was it [bankruptcy] filed to stop them from tearing down this property? Absolutely,” he said at the time.
Imagine the gall of Fonteno, unabashed exploiter of the poor and proud claimant of other people’s houses, to assert victimhood when code enforcement officers and city lawyers zeroed in on his drug-infested, eyesore apartments. Yes, it’s nuts.
Finally, in December 2010, the city cleared the first of several legal hurdles and began demolishing the apartments. As tractors moved in, City Council member Carolyn Davis expressed dreams that the empty acreage could become home to quality retail, like maybe a Gap store.
More recently, others say Wal-Mart has expressed interest in the site, especially now that S.M. Wright is slated to be replaced with a retail-friendly boulevard.
But despite all the liens and lawsuits, Summer Breeze still holds title to the land, now empty and covered with weeds.
Since 2011, the city has filed more than 1,300 labor liens against Summer Breeze for post-demolition maintenance costs of up to $360 per lien. In order for local taxing entities to recover more than $500,000 owed by Summer Breeze, authorities obtained a court order to sidestep Fonteno’s title and auction the property.
In August, most of Summer Breeze’s 27 lots went on the auction block at the county courthouse, valued at $12,000 to $37,000 each. In a basement room packed with bidders, no one raised a hand at the auctioneer’s call.
He halved the asking price. Again, no bidders.
The auctioneer finally offered the lots for the rock-bottom price of only $3,900 each. Silence. No one, apparently, wants to touch properties so heavily encumbered by Fonteno’s debts.
No Wal-Mart. No Gap. That’s how the dreams for a strategic southern Dallas neighborhood’s recovery are trampled by the man who calls himself “the real estate cat burglar.”
Editorial writer Tod Robberson may be contacted at trobberson@dallasnews.com.
