Council and advocates will release an extensive study on Milbank\u2019s abandoned Bronx properties, which have forced tenants to live in dangerous conditions<\/p>\n
City Hall \u2013 Speaker Quinn, Council Member Annabel Palma, joined by the Legal Services of New York City in the Bronx, The Northwest Bronx Community and Clergy Coalition, and the Urban Homesteading Assistance Board, announced a new citywide housing program that will help tenants living in overleveraged buildings that are dangerous and in utter disrepair.<\/p>\n
This is a program that will enlist the help of pro-bono engineers and architects to survey distressed and overleveraged housing buildings across all five boroughs. Tenants\u2019 ability to access building information is often limited to a list of violations each building has. But with these architectural services, tenants and their partners will have explicit information on how extensive the damage is, what repairs are needed and how much repairs will cost.<\/p>\n
\u201cWe\u2019ve fought Milbank over and over again and we will continue to fight until tenants are in livable conditions,\u201d said City Council Speaker Christine Quinn. \u201cBut at least, now, we have one more weapon in our arsenal \u2013 information. Having reports detailing the repairs and the cost is essential to helping these tenants; it is bringing knowledge to power. That\u2019s why this program is so important and will continue to be as we try to tackle other over-leveraged buildings across the five boroughs.\u201d<\/p>\n
“We stand together today to send a clear message to owners of distress and overleveraged buildings: you will be held accountable for providing tenants with safe and habitable conditions,\u201d said Council Member Annabel Palma, Chair of the General Welfare Committee. \u201cI applaud the Speaker for her leadership on this issue and Baer Architecture Group for their survey, which will empower these tenants and lay the foundation for other residents living in unsafe conditions to challenge irresponsible owners.”<\/p>\n
\u201cI applaud my colleagues Speaker Quinn and Council Member Annabel Palma for their continued efforts on behalf of tenants living in distressed buildings,\u201d said Council Member Fernando Cabrera. \u201cI have personally visited some of the buildings being discussed today and have been outraged at the conditions many new Yorkers are being forced to endure. I am proud to stand with my colleagues and housing advocates in the fight to help tenants all over the city get what they deserve: acceptable living conditions.\u201d<\/p>\n
“This new program will help level the playing field,\u201d said Maggie Russell-Ciardi, executive director of Tenants and Neighbors. \u201cIt will arm tenants with the information they need to determine what a truly supportable mortgage or sale price for their buildings would be. And it will help tenants refute false claims by owners and lenders that everything is fine in buildings that are heading rapidly towards financial failure.”<\/p>\n
\u201cI am elated that the City is stepping up to the plate to tackle predatory equity head-on,\u201d said Bronx Borough President Ruben Diaz Jr. \u201cThe Millbank portfolio has been d\u00e9j\u00e0 vu all over again, after this borough had to deal with the abandonment by Ocelot and Hunter Property Management. The hard-working tenants of the Bronx have a right to live in clean, safe conditions and not to have their quality-of-life subject to someone\u2019s balance sheet mistakes and bad decisions. The assessment from the pro-bono architects will show what happens, and in order what we need to prevent banks and property owners taking advantage of this City\u2019s residents.\u201d<\/p>\n
The citywide program was born out of a pilot where UHAB and The Northwest Bronx Community and Clergy Coalition worked with Baer Architecture Group to do an architectural and infrastructural study on Milbank\u2019s distressed Bronx properties. To read the entire report, click here.<\/p>\n
The portfolio of 10 Bronx buildings with 554 apartments, with almost 3,300 building violations, is in severe physical distress following a previous overleveraging by Milbank Real-Estate, a private equity firm out of Los Angeles. The tenants have endured horrible living conditions since Milbank over-leveraged their buildings. Water leaks, mold, cracked and peeling lead paint, collapsing ceilings, broken locks on entrance doors, useless intercoms, rat and roach infestations, busted boilers, and electrical fires are commonplace throughout the portfolio.<\/p>\n
The study found that estimated costs for repair will be:<\/p>\n
\u2022 Average of $26,500 of repairs in each unit
\n\u2022 $500,000 \u2013 $1 million for building-wide repairs
\n\u2022 To fix all 10 buildings will cost between $19.7 million to $24.7 million<\/p>\n
The study confirmed tenant concerns and found that every roof, entry door exterior window, heating supply line and electrical system for each of the 10 buildings needs to be replaced. And that the building\u2019s kitchens and bathrooms are in desperate need of renovation as they are in utter disrepair. <\/p>\n
\u201cDuring our tour of the individual units and buildings, what surprised me the most has the lack of attention that the property owner(s) paid to what at one point was a small repair issue,\u201d said Brian Baer, of the Baer Architect Group who did the analysis on Milbank portfolio. \u201cIt was clear that the \u201cdo nothing\u201d approach was their modus operandi, which caused these little problems to escalate into building-wide systemic problems. The owners could have spent very little to repair the small problems when they first surfaced. Due to the neglect and the method of operating, the next owner will need to spend much more, for much larger problems.\u201d<\/p>\n
\u201cArming tenants with concrete information that allows them to better advocate on their own behalf is exactly in line with the self-help philosophy that is at the core of UHAB\u2019s mission,\u201d said Andrew Reicher, Executive Director of UHAB. \u201cWe also believe that residents are necessary partners in the redevelopment of any distressed property, so this is a very important tool for the Milbank tenants.\u201d<\/p>\n
The Milbank properties are expected to be sold next week to an entity that has refused to be identified despite repeated requests from the tenants and the elected officials for the buyer to come forward.<\/p>\n
“LNR has stalled in court for months & tried to pass the buck by arranging this sale & transfer,\u201d said James Jantarasami, attorney from Legal Services- NYC. \u201cIf LNR weasels out of the case by selling before the court decides our motion, we will make sure the new owner\u2019s feet are held to the same fire by filing 7A proceedings.”<\/p>\n
Milbank Real Estate purchased the rent stabilized properties in 2007 during the height of the real-estate bubble. Advocates questioned the financial sustainability of the $35 million mortgage debt, and placed the portfolio on their \u201cwatch list\u201d of potentially troubled buildings.<\/p>\n
\u201cThe tenants have been fed up for a long time, and now they\u2019re also knowledgeable. Whoever buys these buildings better consider themselves warned, because we will not rest until every repair in every single unit is complete,\u201d said Sergio Cuevas, a tenant leader at one of the Milbank buildings and a member of The Northwest Bronx Community and Clergy Coalition.<\/p>\n
The portfolio has been in a steady state of decline since its owner, Milbank Real Estate, defaulted on its $35 million mortgage. In March of 2009, the mortgage holder, a $3 billion commercial mortgage-backed security trust controlled by Wells Fargo and serviced by LNR Partners, Inc., initiated foreclosure proceedings. The foreclosure judge appointed a receiver who is charged with collecting rents and managing the properties, but due to the high number of vacancies in the buildings, along with the already severely distressed conditions in most of the units, the income from rent collection is not adequate to properly maintain the portfolio.<\/p>\n
LNR, the financial company that controls the $35 million mortgage, is planning to transfer the property, leaving the properties saddled with excessive debt. The tenants represented by Legal Services NYC- Bronx are planning to file what is known in NYC as a 7a motion, which is an application to have a court-appointed building manager who will then ensure that all rent will go toward repairs and maintenance.<\/p>\n
Milbank unfortunately is not an isolated problem. In December, Speaker Quinn announced the formation of a new Predatory Equity Task Force, which has and will continue to monitor problems resulting from the continued fallout of the housing bubble, and perform rapid response when these problems threaten the welfare of building tenants. <\/p>\n
The Task Force has two main goals. First, it tracks buildings that are currently \u2013 or at risk of becoming \u2013 physically or financially distressed, and responds quickly to urgent problems. The Task Force pressures owners and lenders to maintain their buildings or sell to a responsible owner approved by the City. Second, the Task Force will continue to explore the core issues behind these problems, and propose new initiatives and policy changes at the federal, state, and city levels.<\/p>\n
The Task Force has brought together a number of housing advocates and experts, and is co-chaired by Housing and Buildings Committee Chair Erik Martin Dilan, Council Members Inez Dickens and Annabel Palma, and New York City Department of Housing Preservation and Development (HPD) Commissioner Rafael Cestero.<\/p>\n
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Council and advocates will release an extensive study on Milbank\u2019s abandoned Bronx properties, which have forced tenants to live in dangerous conditions<\/p>\n
City Hall \u2013 Speaker Quinn, Council Member Annabel Palma, joined by the Legal Services of New York City in the Bronx, The Northwest Bronx Community and Clergy Coalition, and the Urban Homesteading Assistance Board, announced a new citywide housing program that will help tenants living in overleveraged buildings that are dangerous and in utter disrepair.<\/p>\n
…<\/p>\n