Since I first became a candidate for the City Council in 2013, residents have come to me with horror stories from inside the Acropolis Gardens. Though Astoria has become one of the most attractive neighborhoods outside of Manhattan, many within its walls say living conditions continued to deteriorate inside this 618-unit co-operative. I was troubled to find out earlier this month, through an article in The Real Deal, that alleged poor management by the Shareholder Board brought the Acropolis to the brink of foreclosure by a Wells Fargo-managed fund. The mortgage default in question is, according to multiple lawsuits filed against the management company and the board, apparently the latest in a series of refinancings over the last five years that have driven up the debt on the Acropolis. On Thursday, October 18, Judge William Kuntz agreed the board should be placed in receivership, paving the way for an unbiased third party the power to review the co-op’s books and records and make changes where necessary.
While I am pleased by Judge Kuntz’s decision that a receiver is necessary, it is shameful we have gotten to this point. The foreclosure action is one of four main legal cases surrounding the Acropolis, as hundreds of families, many of whom are renters paying regulated rates, worry if they will lose their homes. A derivative suit against Steven Osman, property manager Metropolitan Pacific Properties, Inc., and another two dozen defendants accuses the board members of filling their own coffers at the expense of the Acropolis. They are accused of operating almost in secrecy, flaunting their bylaws, and miscalculating maintenance costs. Some of these concerned residents brought these concerns to a town hall I hosted with Speaker Corey Johnson, where we pledged to act quickly.
After five years of fielding these constituents’ calls — with my staff doing as much as possible to work with City agencies — I am calling for a full investigation into the Acropolis Gardens shareholders board and managing agent for the sake of nearly 1,500 residents, many of whom have felt voiceless for the last decade.
As I previously made clear, my Council tenure has been marked by unacceptable incidents at the Acropolis. While some of my colleagues have also spent their whole term fighting for improvements at a single development, this should not be business as usual.
It took a dangerous fire in April 2015 to reveal some units had an illegal, faulty gas line. The FDNY rightly shut the line off, and the City ordered the Acropolis to fix the issue immediately. Unfortunately, hundreds of units went without cooking gas or hot water. Public Advocate Letitia James and I rallied outside the Acropolis that June to call for an immediate fix to the problem. Still, two months later, at least four buildings were left without power. Many were forced to cook on camp stoves or hot plates, which endangered the entire complex given their tendency to start fires. Management told some residents gas wouldn’t be restored for “at least three more weeks.”
Problems at the Acropolis would only grow from there. As early as 2016, my staff and I got complaints of black smoke billowing from the buildings’ exhausts. This was troubling to me as an Astoria resident, the Chair of the Committee on Environmental Protection, and as a father whose son suffers from asthma. For those reasons, and my duties as a Council Member, we worked with the Department of Buildings and the Department of Environmental Protection to rectify the issue.
And then, this summer, a constituent called my office about construction in the neighboring apartment. Renovation work inside the unit activated hazardous asbestos, which potentially endangered the entire building. Our unsuccessful attempts at contacting Metropolitan Pacific eventually led to us contacting the Department of Buildings. Inspectors finally issued a stop work order because the unit didn’t have a construction permit.
This is not to champion our responsiveness. Rather, it is to express frustration that almost 1,500 in western Queens continue to live in subpar conditions year after year. You can understand then how upset I was to hear the building was not just in physical ruin, but also potentially in dire financial straits. We spent five years treating independent symptoms while the disease spread like wildfire. Residents have complained that the board has not met in public since 2010, yet a derivative lawsuit filed earlier this year alleges it makes serious financial decisions in secret. Evidence laid out in that civil case claims the debt on the Acropolis ballooned from $12.5 million in 2013 to $45 million in 2017. The plaintiffs also allege Mr. Osman funneled $220,000 in co-op funds to his mother. The board, according to the lawsuit, also did not calculate maintenance fees on a per-share basis.
All the while, the complex’s 17 buildings have racked up hundreds of violations, which those opposed to board leadership say are neglected. Based on multiple legal filings, the Board appears preoccupied with fighting off legal efforts to prevent the shareholders from meeting on November 19 — which some concerned residents argue would be the first time a shareholders’ meeting has been called in eight years — instead of paying its bills.
This is particularly troubling given the explosive New York Times report accusing Donald Trump, in concert with his parents and siblings, of cooking books to skirt tax rules — inflating rents based on bogus costs. We should channel the same outrage from that report to what is alleged to have happened here. Speaker Corey Johnson and I took this very seriously when residents brought their grievances to us on Oct. 4.
Since the news of the foreclosure threat broke, I have reached out to acting Attorney General Barbara Underwood’s office; Public Advocate James’ office; District Attorney Richard A. Brown’s office; Queens Borough President Melinda Katz’s office; the Department of Housing Preservation & Development; the Department of Buildings; and the Department of Environmental Protection.
Receivership will hopefully right this property financially, as well as give the public clarity as to how the complex has been managed over the last decade. Residents deserve to know why they have been brought to this point, how their homes were allowed to deteriorate, and who is at fault. This is the second time in the last 25 years the Acropolis potentially faces financial collapse. I’m determined to make sure this doesn’t happen a third time. Astoria has become one of the fastest-growing residential real estate markets in New York City. Which is why it would be a disgrace to watch from the sidelines as an entire block of buildings literally falls apart at the seams.