'Capone House' still haunts
By SUSAN TAYLOR MARTIN, Times Senior Correspondent
Published October 14, 2007
In an area of stuccoed ranch houses, it stands out - a two-story, wood-sided home with almost as many windows as there are weeks in the year. Neighbors call it the "Capone House," supposedly built in 1926 by legendary Chicago gangster Al Capone as either a brothel run by his girlfriend or a convenient hideout from the feds. Today the mystery is overshadowed by another puzzle - what happened to the current owner, a man who last year bought the Capone place and eight other St. Petersburg houses, all now in foreclosure proceedings? Most were purchased from the same investor, who himself has a dozen properties facing foreclosure.
"It's typical of the frenzy in the market," says Rick Eagan, who lives near Capone's purported haunt.
Vacant for months, the house dates back to Florida's first real estate boom, another heady era that ended with a resounding crash. It was also a time Capone was feeling the heat in Chicago, where he was wanted in connection with two notorious murders.
Capone is known to have visited Pinellas - the Don CeSar hotel lists him as one of its "famous faces" - and it's not inconceivable he liked the idea of his own place on what was then a prime waterfront site. According to a history by the Shore Acres Civic Association, a 1926 photo shows the house situated on Tampa Bay with sand extending across what is now Venetian Boulevard.
"This would have presented the ideal situation for transporting goods, especially liquor, across the bay" during Prohibition, the history says. It also notes that in 1926 a road led from the house to the new St. Petersburg Kennel Club, now Derby Lane, which could have provided Capone with "a gambling and possible money-laundering outlet."
The 10-room house has 50 windows, allowing for cross ventilation, but also giving occupants a superb view in all directions of any approaching G-men. Another possible sign of Capone's presence - two fish over the fireplace, reflecting the gangland phrase "sleeping with the fishes." It is said that fish appear in every house he built.
In 1931 Capone pleaded guilty to income tax evasion and was sentenced to 11 years in prison. The Shore Acres house was sold that very year.
Since then, the house has had several owners, including real estate investor Scott Lubik, It was not his first connection to a place with an unusual history: Lubik inherited, then sold, a famed Atlantic City mansion said to have been a long-ago hangout of the Philadelphia mob, and later of Frank Sinatra.
In 2005, Lubik bought the Capone house and two adjacent lots for $550,000. He moved to Ocala and last October sold the house alone to Carlos Javier Diaz for $740,000 - a 35 percent increase over what Lubik had paid for the house with two extra lots.
Although the Pinellas real estate market was already slowing, records show Lubik sold 14 other houses to Diaz and his wife, Martha Garzon Mizar, between April and October of 2006. Most were small, rundown places south of Central Avenue and were financed with little or nothing down.
The couple made the purchases separately, with Diaz buying some and his wife others. Each claimed to be "single" or "unmarried" on the mortgages despite the fact they have been wed since 2001.
From the borrowers' standpoint, there are two main advantages to being listed as "single," real estate experts say. One, a couple could buy more properties without lenders knowing they were amassing so much debt. And two, if one spouse can't make the payments on a particular house, only that spouse's credit is harmed.
SunTrust Mortgage, which financed most of the houses, would not say how thoroughly it checked out Diaz and Mizar before making the loans.
But "in general, the majority of loans were made over a period of time when credit was more readily available for investors for non-owner-occupied homes," says spokesman Hugh Suhr. "As the market has changed, we have adjusted our requirements and products accordingly, and these loans are not indicative of any broader, systemic issue. As evidence, SunTrust's foreclosure rate is currently half of the industry's overall."
Diaz and Mizar could not be located for comment. Corporate records show the couple were officers in two companies started last year, J.N.D.M. Home Investors in Miami and a flooring company in Ocala. Neither is still active.
In the past few months, foreclosure proceedings have begun on the Capone house and 24 others the couple bought in St. Petersburg and Ocala. Lenders also have started to foreclose on 12 Pinellas properties still owned by Lubik. He is "out of the country" indefinitely, an associate said, and did not respond to an e-mail request for comment.
Today, the Capone place sits empty and staring, a warning on its blood-red door that "entry by unauthorized persons is strictly forbidden." City crews had to come out last summer to mow the weeds, which had grown so high they nearly hid a garish fountain and two life-size statues of lions added in recent years.
Eagan, a transportation specialist who lives nearby, wonders what effect the abandoned-looking house will have on the otherwise-tidy neighborhood. Studies have shown that homes in foreclosure can reduce the value of other properties.
The Capone house has not yet gone on the market, and "I'd be surprised if it's worth more than $400,000 or $500,000," Eagan says. "But it has historical value to the community."
And as Halloween draws near, it could be good for a few chills as well.
Legend has it that a ghostly figure sometimes appears in the windows or doorways. It's said to be dressed in a period black suit.
Times researcher Carolyn Edds contributed to this report. E-mail Susan Taylor Martin at firstname.lastname@example.org.
[Last modified October 13, 2007, 21:42:56]
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