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For rehab king Stu McGowan, it's all about local color


Published August 10, 2005 at 6:18 p.m.

Stu McGowan and his crew - MATTHEW THORSEN
  • Matthew Thorsen
  • Stu McGowan and his crew

There's nothing beige about Stu McGowan, owner of approximately 25 brightly colored rental properties in Burlington's Old North End. Over the past five years, he's bought up and rehabbed some of the worst housing stock in the city. On compromised corridors such as Convent Square and Archibald Street, the old gray has given way to splashes of optimistic orange, purple, vermilion and fuchsia.

No less eye-catching than his growing real-estate empire is McGowan himself: tall and tattooed with a buzz-cut dyed day-glo green. His Vermont Paint T-shirt matches his hair, but the pink socks and work boots are delightfully incongruous. Cruising the hood in his '72 purple El Camino, cellphone in hand, he looks more like a movie producer than a landlord.

In fact, he's a developer with a social mission - Burlington's own anti-Trump. McGowan's goal is to revitalize neighborhoods in a way that doesn't force poor families out. Until now, he's done it with affordable apartments. He's never raised rents on his 100-plus tenants, half of whom are on Section 8. Last Friday, in what appears to be a new trend in Burlington's toughest neighborhood, he was scheduled to close on his first two condos. From now on, McGowan says, he'll mostly be buying and fixing up units to sell, not rent.

All that rehab work provides jobs and vocational training. McGowan hires local youth, who work for him at a starting wage of $9 an hour. A veritable one-man Youthbuild, he whips the team into shape with a combination of tough love, personal magnetism and New Jersey swagger. He seems more like 30 than 42. He calls his company ShoeLess Konstruction - "with a 'K' because I work with kids," McGowan says. Need a business card? The logo is tattooed just above his left bicep.

If he had a business motto, it might be: "Karma goes a long fucking way in this work," McGowan suggests.

On a recent morning, he's overseeing a painting crew at the house next door to his home at 105 Intervale Avenue. More than half of the dozen neighborhood teenagers are black - a mixture of African-Americans and African refugees. The rest are white and Asian. McGowan points out two boys he umpired in the Old North End Little League. Another, who was apparently afraid of heights the previous day, proudly informs McGowan that he's over his phobia. The boss sends him up the tallest ladder with a brush and a bucket of bright-green paint.

At 35 1/2 Convent Square, a three-unit apartment building that's being gutted, McGowan's college-age daughter Emma is installing brand-new windows. She's working with her Vietnamese "brother" Thach, one of four kids McGowan and his wife Joan Watson have taken in since they moved to the neighborhood in 1989. Once an aspiring veterinarian, McGowan rescues animals, too. The family "jungle room" is home to a menagerie of birds and reptiles.

Around the corner, at 14 Convent Square, the scene is a little more upscale. A middle-aged Vermont carpenter is putting the finishing touches on two customized apartments that McGowan is selling as condos - the first time he's done this. Both units have new wood floors, with hand-cut tiles marking the entry to the bottom-floor apartment. The second-story space features track lighting and a sleek, black gas range.

Although it's a new direction for McGowan, he insists "condoizing" advances his larger development goals. He worries that only out-of-staters will pay $250,000 for duplexes that used to go for $150,000. "I don't want to see gentrification. I want to see stabilized, moderate-income housing. But the big problem is, the vast majority is still rental," McGowan says. "I want people to start owning their own properties. I think the thing to do is to create affordable housing that can be sold."

McGowan is first to admit that there's a practical side to his altruism. After Burlington's recent property reassessment doubled his tax bill, the numbers weren't working at one of his buildings. "I went, 'Wait a minute. I've got enough houses. Why don't I condo it?" Although it costs more to separate the utilities, and there are additional legal fees, McGowan says he makes more money selling the units individually.

The price tag - $140,000 - was just right for Esther Maynard, soon-to-be-owner of the 800-square-foot top-floor apartment at 14 Convent Square. Her boyfriend, Derek George, is buying the slightly larger unit below for $170,000.

In Burlington, anything under $160,000 is considered affordable, according to Brian Pine, a housing expert with the city's Community and Economic Development Office. Two people with combined annual earnings of $44,000 - calculated as 80 percent of the median income - can make home ownership work. Although he wasn't aware that McGowan was going condo, Pine fully supports the concept. In the Old North End, "We need more ownership units," he says, "and we need them delivered at an affordable price."

McGowan never pictured himself playing this high-stakes Monopoly game. A UVM grad, he started his own video production company in 1987. Five years later, he founded another entity to distribute his work. But The Noodlehead Network turned into something else: a leading producer of educational videos by and for children. The kids literally ran the shows. McGowan eked a modest living from it.

In 1999, he started thinking about a "retirement plan. I had no savings. I was self-employed. I knew I'd be screwed," McGowan says. So he "planned" to buy one house in the neighborhood every summer as an investment property.

The ulterior motive was to keep the area friendly and to improve the housing stock. When McGowan and Watson moved to Intervale Avenue in 1989, "the Old North End was bad news," he recalls. "But our little pocket was stabilized," he says, thanks to an old-school landlord, who owned almost all the properties around them. Even after he moved his own family out of Burlington, Celse Martelle took good care of his buildings and the people who lived there.

He must have recognized the same quality in McGow-an. When Martelle died several months ago, the family offered McGowan first right of refusal on the house next door - the one the kid crew is currently painting purple and green. The inside is classic: back and front porches, sunny front room, pantry with built-in cabinets. The dark wood trim is in perfect condition.

Old-timers have been good to McGowan: Everett Pecor was already ailing when he agreed to sell McGowan a house on Walnut Street. "His last words to his son were, literally, Did you get me the check for that house?'" McGowan recalls. After Pecor's death, his sons offered McGowan four more of his father's properties - all of them on Archibald Street. The empire was born.

"I get calls all the time," McGowan says, noting that there's never been a single real-estate agent involved in any of his transactions. "Some I want. Some I don't want."

Actually, most of the calls McGowan receives - 80 to 100 per day - are not about new properties. They're from tenants, workers, inspectors, contractors, lawyers. Even if he wasn't "hands-on" and "officially in charge," keeping it all going would be a monumental task. "It suits me to a T," he says, noting the myriad skills used in producing video are directly transferable to his real-estate ventures. McGowan manages all of his properties himself, including showing apartments and choosing tenants.

His secret? "Nicotine gum," he suggests. "Can't live without it."

McGowan says he's "very picky" when it comes to renters. But that doesn't mean he won't take a chance on a prospect with a poor rental history, let someone accrue a security deposit on a payment plan. "I take a chance on 20 percent, and about 50 percent of those turn out to be problems," he concedes. It's not uncommon for him to charge more for one apartment so he can discount another.

"It's the beauty of the capitalist system," he says, sounding more like a socialist.

Pine praises McGowan for his commitment to folks on Section 8. "If you're worried at all about the tenant stiffing you on rent, or leaving you with a mess, you might just stay away from that program. He takes a gamble. That doesn't scare him away at all." Pine adds, "He's not too tolerant if he takes a chance on you and you burn him. He can't afford to be."

Managing the cash flow is the bigger challenge. McGowan describes it as a "real insane balancing act . . . I put between $75,000 and $150,000 into every house. You can't get that back right away." Despite a fruitful relationship with the Chittenden - the bank lends him money for improvements based on the estimated after-rehab value - McGowan says he has come "within a whisker of bankruptcy two or three times." The family's beach house in North Carolina has been refinanced on four occasions in five years. Although he's now on solid financial footing, he's not yet rolling in dough.

"Everybody thinks I'm a rich landlord," McGowan says. "I plan to be someday."

Of course, he may have to sell a few more condos first. And right now, that means attaching a screen door, demolishing a shed out back and satisfying some guy looking for insulation leaks in the crawl space beneath the first-floor apartment. It also involves lawyers - "one reason I haven't sold more houses," McGowan notes.

The question of painters has yet to be resolved. Technically, it's up to George and Maynard to choose an exterior color - now off-white - but McGowan has offered to pay for half the job if they'll let him "help choose" the colors. "That's how much I love painting houses," he says with a chuckle.

Actually, McGowan's color scheme has become a powerful marketing tool; his Vermont Paint T-shirt is no coincidence; he spends an estimated $40,000 a year there. Those bright blues and pinks serve a multiple purpose, the least of which is offering a visual inventory of his real-estate holdings. McGowan actually scored two places because the sellers tracked down "the guy who paints the houses."

It's "a big notice in these neighborhoods that things are changing," McGowan says. Some homeowners have responded by livening up their own places with bolder hues. Not everybody likes the color combos. But McGowan recalls one young man who came by the Intervale work site the other day, full of paint-job praise. "He said, 'When you're in a bad mood, you turn the corner and it just brightens you up.' I said, 'That's it, dude.'"

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