AG Settlement with Pinnacle Group for Rent Overcharges

New York Daily News - http://www.nydailynews.com/ News probe helps put hit on Pinnacle BY JUAN GONZALEZ DAILY NEWS COLUMNIST Monday, December 18th, 2006
State Attorney General Eliot Spitzer, who launched a probe in September into allegations that Pinnacle Group LLC had illegally overcharged many rent-regulated tenants for apartment renovations, has reached a deal with the company, one of the city's biggest owners of rent-stabilized units.
Under the deal, Pinnacle will allow an independent investigator appointed by Spitzer's office to review all rent records for the company's nearly 20,000 rent-regulated units. The company agreed to repay any rent overcharges that the investigator uncovers, according to a source with knowledge of the negotiations.
As part of the agreement, which was still being finalized yesterday, Pinnacle will admit no wrongdoing. In addition, the company has agreed to pay $100,000 to the AG's office for the cost of the investigation, the source said.
The deal comes less than two weeks before Spitzer will leave office and be sworn in as governor.
The AG's probe and separate investigations of Pinnacle by the Manhattan district attorney's office and the state Division of Housing and Community Renewal were all launched after the Daily News revealed in a series of articles this year that Pinnacle had filed more than 5,000 eviction proceedings over the past two years against its tenants - nearly one for every four apartments it owns.
The News investigation also found many cases where Pinnacle had inflated the costs of its repairs for vacant apartments and then doubled or tripled monthly rents far above what rent laws allow.
The company's aggressive tactics spawned widespread opposition and numerous protests during the past year from many of its tenants as well as from political leaders and housing advocates in Harlem, Washington Heights and the Bronx, where the bulk of Pinnacle's housing stock is located.
"We are not in a position to comment on any aspect of the review by the attorney general's office at this time," said a spokesman for Pinnacle last night. "The Pinnacle Group, however, has been cooperative throughout this process."
But some tenant groups who heard of the settlement yesterday called it a slap on the wrist to a huge company.
"This agreement is too nice to Pinnacle," said Luis Manuel Tejada, a spokesman for the Mirabal Sisters Cultural Center in Washington Heights. "You just can't tell them to return rents they've overcharged to tenants without also penalizing them for violating state housing laws."
"It sounds like it's, 'Let's pay it off and let the whole thing go away,'" said Kim Powell, of Buyers and Renters United to Save Harlem. "This agreement does nothing about the massive eviction proceedings or poor management procedures at Pinnacle. It's only a part of the problem being solved."

Read Agreement:


ATTORNEY GENERAL OF THE STATE OF NEW YORK
COMMISSIONER OF THE NEW YORK STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL
In the Matter of
PINNACLE GROUP NY, LLC
ASSURANCE OF DISCONTINUANCE PURSUANT TO EXECUTIVE LAW § 63 (15)
PURSUANT to the provisions of Article 22-A of the New York General Business Law and Section 63(12) of the New York Executive Law, Eliot Spitzer, Attorney General of the State of New York ("the Attorney General"), and Judith Calogeio, Commissioner of the New York State Division of Housing and Community Renewal ("DHCR"), pursuant to Rent Stabilization Law, Unconsol. Laws Section 26-S16, caused an inquiry to be made to determine whether certain persons or entities have been or are engaged in wrongful practices or illegal acts concerning certain rent-stabilized properties and apartments owned or managed directly or indirectly by Pinnacle Group NY, LLC and/or its current or former affiliates and subsidiaries (collectively, "Pinnacle") with respect to the computation of rent increases for vacated apartments based upon the costs of improvements to those properties and apartments during the four-year period between December 15,2002, and December 15, 2006 ("the Inquiry").
WHEREAS, on or about August 29,2006, the Attorney General and DHCR served a subpoena on Pinnacle, seeking certain documents in connection with the Inquiry; and
WHEREAS, Pinnacle has cooperated in the Inquiry by producing responsive documents; and
WHEREAS, Pinnacle is committed to complying with all applicable laws and regulations, and has advised the Attorney General and DHCR of Pinnacle's desire to resolve the Inquiry; and
WHEREAS, Pinnacle has undertaken and will undertake certain actions, set forth below, to ensure that its accounting for and allocation of the expenses it incurs in improving the apartments and properties it owns are accurate, and that any rent increases which are set based on such improvements and/or based on other appropriate factors are correctly and lawfully computed; and
WHEREAS, the Attorney General and DHCR find the actions set forth below to be undertaken by Pinnacle, appropriate and in the public interest; and
WHEREAS, Pinnacle believes that it is, and at all times, has been, in compliance with New York law, and Pinnacle has cooperated fully with the Attorney General and with DHCR throughout this Inquiry; and Pinnacle is entering into this Assurance of Discontinuance ("Assurance11) so that this matter may be resolved amicably, without further cost or inconvenience; and
WHEREAS, Pinnacle is willing to enter into this Assurance without admitting that it has violated any law, or that it otherwise committed any wrongful or improper act, and the Attorney General, pursuant to Section 63(15) of the New York Executive Law, is willing to accept this Assurance in lieu of commencing any statutory proceedings, and DHCR is willing to accept this Assurance in lieu of commencing any further overcharge proceedings on its own initiative, IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES
1. THAT this Assurance shall be binding on, and apply to, Pinnacle Group NY, LLC, its affiliates, subsidiaries and all of their current and former officers, directors, employees, and agents, and any partners of any of them, as well as any successors in interest to any of them

2. THAT for all rent-stabilized apartments owned or managed by Pinnacle, Pinnacle will comply with all applicable laws including but not limited to the Rent Stabilization Law, Local Law 1969, No. 16 of the Administrative Code of the City of New York ("RSL") and regulations thereto, as they may be from time to time modified, including but not limited to:
(a) RSL §§ 26-511 and 26-512 and 9 N.Y.C.R.R. §§ 2522.1 and 2521.1 incalculating the rents charged for rent-stabilized apartments owned or managed by Pinnacleimposed as a result of individual apartment improvements and major capitol improvements andnot imposing rents in excess of the permissible limits;
(b) RSL §26-517(f) and 9N.Y.C.R.R. §2528.3 by registering with DHCR the rent amount for each rent-stabilized apartment owned or managed by Pinnacle each year; and
(c) 9 RY.C.R.R § 2522.5(c) by attaching a rider to the leases of tenants of rent-stabilized apartments owned or managed by Pinnacle who sign a vacancy lease, which rider states, in relevant part, the amount of the prior legal regulated rent, if any, and how any increased rent was calculated, as well as a statement that the increased rent was calculated pursuant to the Guidelines of the Rent Guidelines Board and the Rent Stabilization Code.
3. THAT Pinnacle has retained a forensic accounting and investigative firm acceptable to the Attorney General and to DHCR, Forensic Investigative Associates ("FIA"), which will, within one hundred eighty ( 180) days of the execution of this document by the Attorney General and by DHCR audit all rents set by Pinnacle for the four year period between December 15,2002, and December 15,2006, for each rent-stabilized apartment owned or managed by Pinnacle which was vacated within that four year period; and
(a) Should FIA find any rent that cannot be justified based on statutory increases and/or documented improvements and/or other applicable provisions of law, Pinnacle will credit to the tenant (or refund to the fonner tenant) the amount of the overcharge plus interest calculated in the manner approved by DHCR, no later than thirty (30) days from completion of the audit;
(b) For each apartment for which a rent overcharge is identified, Pinnaclewill, no later than thirty (30) days from completion of the audit, revise Pinnacle's rent records toconform with the correct rent as determined by FLA, provide current tenants of those apartmentswith written notice of the lawful stabilized rent, amend tenants' leases, as appropriate, and file with DHCR an amended and superceding rent registration statement for each apartment wherethe rental contained in the current registration statement exceeds the lawful rent as calculated by FIA;
(c) If there are tenants to whom refunds are owed as a result of this audit whocannot be readily located, Pinnacle will take all reasonable steps, as agreed by the AttorneyGeneral and DHCR, to locate the tenants. At a minimum, these efforts shall include Pinnaclesending each such former tenant at his or her last known address a copy of the notice that arefund is due the tenant and of the procedures for obtaining the refund. Pinnacle shall pay therefund due a former tenant within 30 days of receiving a request from such former tenant or hisauthorized representative or within 30 days of learning of the former tenant's currentwhereabouts, hi the event that any of these tenants cannot be located. Pinnacle will maintain themonies for their refunds in an escrow account for one year. After that time has elapsed, if thetenants' whereabouts remain unknown, these funds will be disbursed in a manner agreeable tothe Attorney General and DHCR; and
(d) Within 90 and 180 days from the date of the execution of this Agreement, Pinnacle shall provide the Attorney General and DHCR with verified compliance reports in the form of an affidavit stating in detail (he steps and procedures taken or instituted by Pinnacle to comply with the terms of this Assurance. The compliance report shall include the following:
i. the amount of rent overcharges refunded to each current and former tenant;
ii. copies of all letters or notices sent to tenants pursuant to this Assurance and a description of all efforts made to locate tenants entitled to refunds;
iii. copies of all revised rent records showing the correct rent amounts as calculated by FIA;
iv. copies of all notices provided current tenants of those apartments of the lawful stabilized rent;
v. copies of leases amended as provided in para. 3(b) above; vi, copies of all superseding rent registration statements filed with DHCR pursuant to paragraph 3(b) above;
vii. such additional supporting documentation as the Attorney General requests to demonstrate that FlA's calculation of revised rents and/or overcharges was justified;
h. the name of the financial entity holding the escrow account and an accounting of the funds contained therein; and
i. a copy of FlA's audit report (included in the second compliance report).
The compliance reports shall be sent to Assistant Attorney General Herbert Israel,Consumer Frauds Bureau, Office of the Attorney General, 3rd Floor, New York. New York 10271 or such other person as may be designated by the Attorney General; and Office of General Counsel, Division of Housing and Community Renewal, 25 Beaver Street, 7th Floor, New York, New York 10004 or such person as may be designated by the Commissioner.
4. THAT FLA will also review and approve Pinnacle's current procedures forcomputing rents on newly vacated apartments:
(a) If any of Pinnacle's procedures are found not to be in compliance withapplicable law and DHCR regulations, Pinnacle will promptly implement the recommendationsof FIA for revised procedures; and
(b) For a period of one year from the date of the signing of this Assurance,FIA will monitor Pinnacle's ongoing compliance with the approved procedures for tracking thecosts of renovating individual apartments and for setting rents on newly vacated apartments
5. THAT this Assurance concludes the Inquiry brought by the Attorney General andby DHCR and any action that the Attorney General or DHCR could commence against Pinnacleoi any of its current affiliates or subsidiaries, or any of their current or former officers, directors,shareholders, employees, and agents, and any partners of any of them, arising from or relating tothe subject matter of this Assurance; provided however, that nothing contained in this Assuranceshould be construed to preclude claims by the Attorney General or by DHCR to enforcePinnacle's obligations arising from or relating to the provisions contained in this Assurance.
6- THAT no amendments, modifications or variations of the terms of this Agreement shall be valid unless made in a writing executed by both Parties.
7. THAT this Agreement shall apply to and inure to the benefit of the Parties and their respective successors and assigns, parents, subsidiaries, affiliates, predecessors, present and former directors, officers, shareholders, members, partners, employees, representatives and agents
8. THAT this Agreement contains the entire agreement and understandingconcerning the subject matter hereof between the Panics, and supersedes and replaces all priornegotiations, representations, promises, proposed agreements and agreements, written or oral
9. THAT nothing contained herein shall be construed so as to deprive anyindividual of any remedy under the law including the right of any tenant or former tenant to filean overcharge complaint with DHCR with respect to the subject matter of the Inquiry arid forDHCR to adjudicate it in accordance with the RSL and Rent Stabilization Code. This Assuranceshall not confer on any person any tights as to a third party beneficiary or otherwise againstPinnacle.

10. THAT the parties represent and warrant that their signatories to this Assurancehave authority to act for and bind the respective parties.
11. THAT the acceptance of this Assurance by the Attorney General and by DHCRshall not be deemed or construed as an approval by either of any of Pinnacle's past practices.
12. IT IS FURTHER UNDERSTOOD AND AGREED THAT Pinnacle shall payto the Attorney General the sum of $ 100,000.00 as costs of this investigation pursuant toExecutive Law § 63(15).

WHEREFORE, the following signatures are affixed hereto this 18) day of December, 2006
ELIOT SP1TZER
Attorney General of the State of New York
120 Broadway
New Yodrl^ 027,1-0332
Francine James
Assistant First Deputy Attorney General
-
JUDITH CALOGERO
Commissioner of the New York State Division of
Housing and Community Renewal 25 Beaver Street,,?"1 Floor New Yoi k, Ne^York 10004 ,
s .'• ,' , V Si <~- V •'"> / !'By: / ^ Z_________

Viewers are advised if they would like a copy go to www.oag.state.ny.us

100 Families Won't Be Having Turkey At Home

More than a hundred families in a Washington Heights building may not be able to cook Thanksgiving dinner in their homes, because of a broken gas main they say the landlord isn't fixing fast enough. NY1's Solana Pyne filed the following report. “One of the things that you look forward to is just smelling all the foods, you know, during the holidays. You're not going to get that here this year,” said building resident Ramon Breton. That's because residents of these buildings can't cook this Thanksgiving. They've been without gas since Con Edison showed up about a month ago. “A tenant complained that there seemed to be a leak of gas. They checked in the basement and they found there was a leak in one of the pipes. They shut down the gas for the whole building,” said building manager Juan Lopez. The Pinnacle group, which owns and manages the building, called in a plumber to check out the buildings' gas pipes. They all failed integrity tests and are being replaced. Meanwhile, heat and hot water are running off a backup boiler, but tenants can't use their stove or oven. “We have to be buying food out there in the street every day,” said Elizabeth Valdez. “And nobody's going to reimburse all that money that we're spending there.” “This is one of those emergencies that they should pay overtime and either have more crews, or have weekend workers. I don't see that,” adds Ramon. Several residents said the same thing: that crews have not been working Saturdays or Sundays, but the building manager says they're wrong. “I have them working seven days a week. They're here at seven in the morning. They're still here. Usually they wait for tenants to come back from work and they'll keep working,” said Lopez. Lopez says six more workers will start this week. But in Ramon Breton's apartment, the work that has been done has created its own problems. “We've had more mice than ever. We're averaging about three a day,” said Ramon. To try to make up for all the inconvenience, Pinnacle has ordered Thanksgiving dinners for residents. “We catered with Amy Ruth to provide 130 meals for the tenants. So we're doing four meals per apartment and we're going to serve them in the lobby on Wednesday,” said Richard Harley, Community Affairs for Pinnacle. But everyone who spoke with NY1 said they'll be eating elsewhere on Thursday. The building manager says gas will be restored piecemeal as the pipes in particular parts of the building are replaced. If it stays on schedule, he says the work will be done by Christmas. Residents say they're resigned to hoping management's right and that they'll at least be able to cook Christmas dinner at home. – Solana Pyne

http://www.ny1.com/ny1/content/index.jsp?&aid=64515&search_result=1&stid=8

Pinnacle Group: One big city landlord and many little headaches

Landlord's battle illustrates trend of buying deteriorating buildings for big profits
By Jen Benepe

706 Riverside Drive In today's tight rental market, any New York City landlord should be sitting pretty.Unless of course, he happens to be Joel Weiner, owner of the Pinnacle Group.Weiner and his company have come under increasing criticism as they have bought up an estimated $1 billion in distressed buildings in Upper Manhattan and parts of the Bronx over a two-year period.The complaints have come from tenants' groups, legal aid lawyers and elected officials who say the company has been overly aggressive in raising rents through false major capital improvements (MCIs) and by trying to remove rent-stabilized tenants.The allegations have spurred recent investigations by both the state attorney general and the Manhattan district attorney.If anything, the public tempest about Weiner and the Pinnacle Group (which is backed by the real estate investment fund Praedium) reflects changing times.Deteriorated housing stock, once the bane of a landlord's portfolio, is now a primary source of double-digit growth.Reversing the status quoThe company's business model is a factor: Praedium seeks to invest its money in large numbers of deteriorated properties, make repairs and create a healthy rent roll that will yield a profit within one to two years.But most tenants in the new Pinnacle acquisitions, observers say, are more familiar with the old "slumlord" model, where the landlord lets the building go and the tenants stop paying the rent because they're living in a slum; a downward spiral where no one wins.Most of the 104 properties that Pinnacle purchased from landlord Baruch Singer in 2005 for over $500 million were in severe disrepair, and a number of tenants had stopped paying rent years earlier, said Ken Fisher, a former Brooklyn member of the City Council and Pinnacle's legal representative.It's a situation that can lead to clashes with the tenants as they scramble to pay unpaid rent, or balk at new charges that come with building improvements, Fisher noted.These factors have figured significantly in the negative backlash in part because Pinnacle is the only landlord to undertake such a massive buy-out in the areas, or even in the city, some observers said.Condo conversionsComplicating the picture, some of the properties might be converted to condos: Pinnacle has asked the attorney general's office to approve seven non-eviction plans, most of them on Riverside Drive. One has already been approved.Although Weiner has owned property in New York for 30 years, public opposition to him crystallized when residents of Pinnacle's prime Riverside Drive properties learned of his intent to take their buildings condo. This created fear that they might lose their rent-stabilized apartments, said Kim Powell, a resident in a Pinnacle building who started BRUSH, or Buyers and Renters United to Save Harlem.Another group attacking Pinnacle, the Mirabel Sisters, is run by Luis Tejada, a superintendent at 619 West 140th Street who was fired when Weiner took over, Fisher said."They want to throw out people with rent-controlled apartments, but people here can't pay more rent," said Tejada.Pinnacle has also come repeatedly under the sting of the New York Daily News' reporter Juan Gonzalez, who discovered that Pinnacle has sent out 5,000 dispossess notices for the 21,000 units the company owns, a figure the company has not denied, according to press reports.Gonzalez also provided powerful accounts of tenants -- including a 78-year-old woman and her nine cats -- being forced out of their apartments.A recent account of Pinnacle's actions by the New York Times detailed alleged cases of fraud -- including false billings and cost of renovations that were exaggerated -- that are being examined by the district attorney and the state attorney general's office.In one instance, Pinnacle allegedly recorded using 160 light bulbs, 75 pounds of grout, and 130 gallons of paint for the renovation of a single two-bedroom apartment in Harlem in order to justify raising that unit's rent to $1,900.Pinnacle lawyers acknowledge they made mistakes in the case, according to the Times, and the couple occupying the apartment was awarded $10,000 in rent credits, though they claim they are owed $15,000 more.Pinnacle's lawyers also continue to legally challenge some of their claims, the Times reported.Uphill public relations battleThe company has been engaged in an uphill public relations battle ever since.While not disputing the figure of 5,000 dispossess notices, Fisher pointed out that the number is misleading, because multiple notices can be sent to the same apartment, or an apartment could have changed hands during the two and half years the notices were sent out.The number of apartments targeted for eviction is closer to 2,500, or 12 percent of Pinnacle's total portfolio, he said. That is less than the city average of 15 percent, or 320,000 dispossess actions out of 2.1 million units citywide, he claimed."In the first year that Pinnacle owns a building, there is usually a higher number of dispossess cases because there are a large number of tenants who haven't been paying rent," Fisher explained.He said when Pinnacle bought the Dunbar Building, a landmark structure that takes up an entire block in Harlem, the arrears were $4 million on a $1.3 million annual rent roll.He also said that BRUSH and several of the tenants at 706 Riverside Drive were using their stance against Pinnacle as a way to negotiate a lower asking price for their apartments, many of them two- and three-bedroom apartments with sweeping river views and original prewar detailing -- worth an average of $1 million, out of reach for most people living in the building.Currently, most of the rent-stabilized, two- to three-bedroom apartments in the building average just $1,100 a month in rent, confirmed Powell.Fisher said BRUSH and Powell were disingenuous because, although claiming to represent all tenants in Harlem, they had only expressed dissatisfaction with Pinnacle.As to former super and current Pinnacle opponent Tejada, he was fired for incompetence, said Fisher, who showed a reporter pictures of the building he was supposed to care for, 619 West 140th Street, surrounded by garbage.Finally, Fisher noted that the rent payments made by the woman with nine cats had not been properly accounted for by the previous landlord, and that her case had since been resolved.It's also about the system"Many of the cases that Pinnacle brings are not legitimate," said Ken Rosenfeld, director of legal services of the Northern Manhattan Improvement Corp., a nonprofit organization that provides legal services to tenants in the area. "They just sue."But while tenants' rights advocates, elected officials and lawyers interviewed for this article stated repeatedly that they loathed Pinnacle's tactics, sources noted that the state Legislature created the platform for a company to bring action against tenants who know little about how to navigate landlord-tenant court.A lack of public funding for court representation means that many low-income tenants will lose their homes, said Susan Russell, chief of staff for City Council member Robert Jackson, a Democrat whose district includes many of the up-and-coming Riverside Drive addresses."This is a capitalist society -- what are we supposed to say, that residential property should not be profitable?" she asked. Because 92 percent of landlords have lawyers in housing court, while only 8 to 10 percent of tenants are represented, Jackson's office contributed $50,000 toward tenant court representation, "to level the playing field."Observers also agreed that the law governing the state Department of Housing and Community Renewal should enable the agency to do an accounting of charges related to rent increases, and not expect the tenant to do an after-the-fact investigation on a rent number that he or she may not even suspect is inaccurate.Rosenfeld said the blame also lay in the "extreme" lack of affordable housing in the city, and the inability by government to deliver alternatives.Pinnacle responded that, when it buys a property, it must take legal action if a tenant owes rent. Many of the rental records that Pinnacle inherits are a mess, said Fisher, and have created unnecessary dispossess notices."The real problem comes with relatives of people who have lived in these apartments for years," said Russell, who said many find themselves out of a home if they don't have a solid contract with the previous landlord."There are a lot of concerns about gentrification, but it is not being created by Pinnacle," added Fisher.Powell said that Pinnacle sued practically everyone when they bought a building, but that the majority of the tenants didn't qualify for legal aid. "All of them won, but they didn't get their money back," money that could have been spent toward buying their own apartments, she said.Making good on a bad startStill, Pinnacle says it's not only different from many landlords, but that it also provides fair, affordable housing while government has long ago stopped trying to house middle- and lower-class New Yorkers.Fisher said that Pinnacle's intent is to upgrade a property once it has been purchased."In 2005, Pinnacle purchased 6,006 units and we spent $11.5 million on building renovations and $9.7 million on renovation of apartments," he said. Since then, 416 units have turned over to other tenants, but only $4.4 million was allocated to rent-increase calculations, he added.When Pinnacle purchased the Dunbar, there was "broken furniture, a loan shark ring, a brothel, and drug gangs operating out of some of the apartments," said Fisher. "But if you go today the graffiti is gone, the place is spotless."Reporter Wayne Barrett decided against putting Pinnacle on his "10 Worst Landlords" list in the Village Voice because their record was unclear, he wrote.Rosenfeld, who has represented some tenants in court against other big owners in the area like Prana (see below), agreed that Pinnacle had received more attention than other landlords who engaged in the same, or even worse, practices in the area."But when you enter into New York City real estate in such a big fashion and make so many purchases, you unite tenants against you because you are so big," Rosenfeld said.In Pinnacle's favor, Weiner had attended public meetings and made himself accessible, noted Russell.Fisher acknowledged that the company had made some mistakes and had since hired two community outreach staffers, met with more than a dozen elected officials and community leaders, and joined organizations that reach out to tenants.Necessary improvements?Part of the brouhaha is that one person's justifiable building improvement is another person's gingerbread. When MCIs are made, the major capital improvements can be used as a way to increase rent-stabilized rents."Our allegations have been overcharging in rent and capital improvements," said Powell, whose tenants' group raised $6,500 for an independent engineer's assessment of 706 Riverside Drive, which they determined will require an additional $2.8 million dollars worth of work."Flags, gold paint and security cameras," she noted, "are not for the benefit of the tenants."But one man's unneeded gold paint is another's sorely needed paint. Fisher tells the story that someone was complaining that the elevator in 706 Riverside Drive needed to be replaced, and Joel turned to Kim Powell and said, "You told me not to do that because you didn't want an MCI.""That is an example of the level of complexity and acrimony that you might not see in other cities," Fisher said.Funds find profitability, controversy as landlordsThe prospects for growth in changing areas like Washington Heights and the Bronx have attracted large investment funds looking for big profits.Although tenants are quick to attack the Pinnacle Group as making cosmetic improvements to attract higher rents and then passing the charges along to existing tenants, other landlords in the area with a similar financial model have operated quietly out of the limelight.New York City property records show that Prana Growth Fund owns more than 42 properties in the area, most of them in the heavily Dominican areas of Washington Heights, where tenants are less likely to wage public battles because they don't speak English. Prana quickly sold 600 West 161st Street when news of their lawsuits with tenants started becoming public, according to sources.Extell Development recently bought up five buildings from Broadway to Riverside Drive on 137th Street, but tenants say they received notices of the new ownership in their rent slips, and the office number they were given always goes to an answering machine. A spokesman for Extell, George Arzt, said that the company had no intention, so far, of turning those buildings into condos, and would make itself more accessible to tenants in the future.Operated by Kurt McCracken, Richard Esposito and Peter Larsen, Prana, which is based in San Francisco, is described by investment adviser Kochis Fitz in their newsletter as a company that "looks for opportunistic investments in inefficient markets that are generally characterized by unsophisticated, capital-constrained buyers and sellers, significant government regulation (primarily rent control), and a large variance in rents for similar units."The newsletter notes that Prana seeks such investments in urban areas and "once purchased, the objective is to achieve positive cash flow within 12 months." Their long-term goal says Kochis Fitz is "significantly increasing rent rolls," while managing tenant turnover, focusing on tenant relations, and making "cosmetic improvements."Yet tenant groups, local representatives and even legal aid lawyers for the most part were unaware that the company is operating in Upper Manhattan or that many of its tenants have experienced such aggressive tactics when Prana bought out their buildings.Attorneys Robert Sokolski and Daphna Zekaria successfully represented tenants in actions against Prana in 2004 and 2005. Ana Ingersoll, president of a tenants' group at 600 West 161st Street, said the building had 1,023 code violations."Many [of the apartments] are in obvious disrepair: Faucets leak, paint is peeling, bathrooms are moldy, and some stoves have been without gas for months," reported the Gotham Gazette in 2005; the newspaper noted that Prana had not returned its phone calls. In San Francisco, Prana has gained a reputation for "systematic evictions" of tenants of buildings it acquired, according to tenants and lawyers who represented them.Praedium Group, the big backer behind Pinnacle's two-year buying spree, has an investment strategy that reads like a carbon copy of Prana's:"Our strategy," the company wrote on its Web site, is "centered on pursuing middle-market assets with a total cost of less than $75 million each, and focusing on "value enhancement" opportunities, which includes "deterioration of the asset's physical condition; inadequate repairs and maintenance, an ownership that has failed to aggressively manage the current tenant/leasing base," and several other criteria that define distressed properties.Both Prana's and Praedium/Pinnacle's business models seek to upgrade the properties well beyond the level at which they had been operating. But while Pinnacle owner Joel Weiner has appeared publicly to address tenant issues and responded positively to pressure from the media, Prana has made itself completely inaccessible to the public; every single one of their publicly listed numbers is a fax machine. Repeated calls to their offices in San Francisco went unanswered.

NEXT MEETING TBA

COME LEARN WHAT YOUR RIGHTS ARE AS A TENANT. ASK QUESTIONS ABOUT HOUSING LAWS. IF YOU LIVE IN A BUILDING UNDERGOING A POTENTIAL NON-EVICTION CONDOMINIUM CONVERSION GET THE FACTS.

GET EDUCATED AND STAY INFORMED!

WHEN: NEXT MEETING EARLY DECEMBER TO BE ANNOUNCED

WHERE: ?


PINNACLE TENANTS: HAVE YOUR BUILDING REPRESENTATIVE OR TENANT LEADER CONTACT US TO GET MORE INFORMATION



Contact Information:

BRUSH
Hamilton Grange Station
Box 98
New York, NY 10031
646-248-6915 or harlembrush@yahoo.com


HAD ENOUGH! - JOIN BRUSH!

Broken or no locks; Broken mailboxes; Defective windows; Walls/ceilings cracked/buckling/holes; Lead paint; Leaks, Peeling paint in hallways or dirty hallways;
Elevator not working; Stairs broken or loose; Mold; Garbage problems
Fire escapes rusty / broken / defective / missing; Unsecured basement or roof; Exposed wiring; Rent overcharges;No rent receipts given; Rent receipts incomplete (no date);
Inadequate or no super service, missing Co2 Detector

HAD ENOUGH! - JOIN BRUSH!

Questionable major capital rental improvement increases, eviction notice, succession right issues, or any legal action.

HAD ENOUGH! - JOIN BRUSH!

If your Landlord is harassing you in any form or fashion...

HAD ENOUGH! - JOIN BRUSH!

PRESS RELEASE

June 10, 2006
VOL. I No. 2

BRUSH has been at the forefront of many media discussions regarding the management practices of The Pinnacle Group. During the month of May, the New York Daily News ran countless articles about the plight of many tenants living in Pinnacle-owned buildings. As a result, various community boards convened a special meeting to discuss the management practices of the company and New York State Attorney General Eliot Spitzer was called upon to take action.

In the Wednesday, June 7th edition of the New York Daily News, Juan Gonzalez again assails the nefarious practices of Pinnacle, the New York State Division of Housing and Community Renewal has launched an investigation trying to discern a pattern of conduct, Cardinal Egan of the New York Archdiocese of the Catholic Church is speaking at the rally on Saturday June 10th in Washington Heights, and the Housing Committee Chair of the New York State Assembly, the Honorable Vito Lopez of the 53rd Assembly District in Brooklyn is launching an investigation. Also, the Village Voice ran an article about BRUSH’s attempt to preserve affordable and quality housing by examining the management practices of companies like Pinnacle. The President of BRUSH, Kim Powell was featured on cable TV with Amy Goodman of Democracy Now! (a cable news program), and the New York Daily News Columnist, Juan Gonzalez, to talk about the “overpriced” proposed condominium conversion plans filed by The Pinnacle Group with the New York Attorney General’s Office.

BRUSH is currently working with tenant associations, legal service agencies, and various non-profit organizations in an effort to challenge the practices of companies like The Pinnacle Group. Thus far, through their general meetings held each month, BRUSH has put pressure on The Pinnacle Group, and successfully forced them to dismiss a few of the eviction proceedings the company brought against tenants.

As a result of the pressure of the community the Pinnacle Group has called upon BRUSH to assist them in developing their community ties. BRUSH has met with the company and reports that their efforts to improve and enhance the company’s relationship with the community is an evolving process.

Elected officials as well as community–based organization, such as, Mirabal Sisters have now joined in BRUSH’s efforts to challenge the company’s practices. BRUSH is currently working with various organizations and other New York City boroughs to organize and develop strong tenant associations.

Donations and suggestions may be sent to:

BRUSH
Hamilton Grange Station
Box 98
New York, New York 10031

NEXT MEETING: TBA

For more information:
Contact 646-248-6915 or kimlpowell@aol.com or harlembrush@yahoo.com

AS LANDLORD GROWS, SO DOES CRITICISM

Marilynn K. Yee/The New York Times
Tenants at a building at 706 Riverside Drive who have formed a group to oppose Pinnacle. Pinnacle Group has become one of the biggest property owners in neighborhoods from Brooklyn to the Bronx.

By TIMOTHY WILLIAMS
Published: September 3, 2006
Not long ago, Joel Weiner was a small player in New York City’s residential real estate industry. The properties he owned were neither extensive, nor impressive.

But during the past two years, Mr. Weiner, 57, and his firm, the Pinnacle Group, have spent more than $1 billion on hundreds of apartment buildings and quietly become one of the biggest property owners in neighborhoods from Brooklyn to the Bronx.

But Pinnacle has had problems as it expanded: It is the subject of criminal investigations by the Manhattan district attorney and the state attorney general’s office; it has been denounced by Representative Charles B. Rangel and other politicians; and it has been the subject of angry community meetings and rallies and petitions signed by thousands of people who object to its business practices.

Last week, the attorney general’s office subpoenaed Pinnacle documents, including rent registration forms, as part of its investigation, Pinnacle officials said.
The antipathy generated by Mr. Weiner and Pinnacle is the city’s latest entry in the time-honored landlord-versus-tenant struggle, between those who want to keep their rents down and those who want to raise them. But this one is being played out with perhaps greater passion because of a tight housing market and the breakneck speed of gentrification in recent years, which has seemed to transform many formerly undesirable neighborhoods overnight.

Critics accuse Pinnacle of buying buildings and firing superintendents within weeks. Questions have also been raised about whether the company has violated the city’s rent-stabilization laws by sometimes raising rents higher than is legally allowed, through such measures as passing along the cost of questionable renovation expenses. In one case, the cost of installing five toilets was passed on to a tenant in a two-bathroom apartment.

The critics also say the company has been engaging in harassment to force people out of their apartments. Tenants describe being put through a Kafkaesque tangle of eviction notices slipped under doors at night, and of legal challenges made to their right to live in longtime apartments.
In some buildings, one-quarter to one-half of the tenants have received so-called dispossess notices — typically the start of the eviction process — within a few months of Pinnacle’s purchase of the property. The company’s practices, its critics say, are a case study in the gentrification of some of the last working-class neighborhoods in Manhattan.

“We’ve been living here since it was the drug capital of the world, now we are sitting on a commodity,’’ said Rafael Gomez, 48, who lives in a Pinnacle building in Washington Heights, adding that people ask how “do we end up in such a beautiful neighborhood when we are poor people?”

Mr. Weiner denied criminal wrongdoing and said his goal was to be recognized as a model landlord. He has acknowledged raising some rents, but said the increases were necessary so he could provide safe, quality housing. His lawyers maintain that any errors Pinnacle may have made in seeking to evict tenants or in overcharging on rent have been the result of honest mistakes. The company rightly says costs of improving apartments can be legally passed on to tenants.

Mr. Weiner has not disputed that his company has sent out 5,000 dispossess notices to tenants in its approximately 21,000 apartments in the past 29 months. That, say adversaries, is itself cause for alarm.

“When you are trying to evict one out of four tenants, that is what lawyers call prima facie evidence,” Congressman Rangel said. “It is something that screams out for a criminal or civil or legal remedy.”

Mr. Weiner agreed to be interviewed, but did not want his photograph taken because, his lawyers said, he wanted to protect his privacy and because he had received a death threat on the Internet.

Mr. Weiner, who was born in Brooklyn and lives on Long Island, said his objective was to simply get tenants to pay their rents. And he makes no apologies for Pinnacle’s aggressiveness in moving to evict those late on rent or otherwise not legally entitled to live in his buildings.

“When you are in the trenches and you try to turn around a building, it’s not easy,” he said. He has hired a team of prominent lawyers, including former City Councilman Kenneth K. Fisher and Benjamin Brafman, a defense attorney whose clients have included Michael Jackson.

Mr. Weiner describes himself as a hands-on owner who visits his properties frequently and is a stickler for cleanliness, order and the removal of building code violations.

Although much of the criticism about him has focused on gentrification, Mr. Weiner said his recent purchases of buildings in neighborhoods like Washington Heights, Harlem, Inwood and the South Bronx would not necessarily lead to wealthier tenants moving in and displacing
current residents.

“I don’t want to call it gentrification,” he said. “I want to call it meeting community needs.”
He said he typically raises rents after he buys a building in order to pay for the major improvements he must make because previous landlords have neglected many of the properties. Pinnacle legally passes those costs on to tenants in higher rent bills. “This is a very tough business,” he said. “I have a passion for doing it, and doing it right.”

In December 1997, Pinnacle owned 267 apartments in the city, and Mr. Weiner, though wealthy, was unknown, even to many of his competitors. But by May of this year, after an infusion of cash from the Praedium Group, a real estate fund that specializes in investing in inner cities, Pinnacle’s holdings had jumped to 21,642 apartments.

From May 2004 to May of this year alone, the number of Pinnacle-owned apartments had tripled, with most of the recent purchases concentrated in Upper Manhattan and the Bronx. Among its acquisitions — for $500 million — was the 2,900 apartment portfolio of Baruch Singer, who had become one of Harlem’s most notorious landlords because of the number of code violations and fines his buildings incurred.

Kim Powell, who in November 2005 helped start an anti-Pinnacle group called Brush — Buyers and Renters United to Save Harlem — said the group’s primary problem with Pinnacle was how it treats renters. “They have shown an absolute disregard for tenants,” Ms. Powell said.

The Pinnacle model has been to purchase what it refers to as distressed properties — typically apartment buildings that have numerous code violations, are in poor repair, and house many tenants who are behind on rent. The tenants in the 104 Singer buildings, for example, were in arrears for a total of $4.3 million, according to Pinnacle.

The company cleans up the building, often starting at the basement. It scrubs graffiti, installs exterior lighting, cameras and new front doors, and works on code violations. The rent-stabilization laws allow some or all of the cost of that work to be passed on to tenants in the form
of higher rents.

Vacant units often get complete makeovers, including new kitchens. Landlords can also increase rents on vacant apartments by as much as 20 percent under state rent regulations. As a result, rents paid by incoming tenants are often significantly higher than what previous renters of the same apartment had paid.

Tenant advocates say Pinnacle is intent on raising rents to the $2,000-a-month threshold, which would remove the units that are vacant from rent-stabilization protection.
The law would then allow a landlord to rent those apartments for whatever the market will bear.

“That’s their business plan,” said Ken Rosenfeld, director of legal services for the nonprofit Northern Manhattan Improvement Corporation. “They’re testing the waters, they’re pushing the envelope.”

Mr. Weiner however, said that few of his apartments had reached the $2,000 level, and that he usually charges tenants less than the legally allowed rent because the current market cannot support higher rents. The city allows an occupied rent-stabilized apartment to be deregulated after its rent hits $2,000, but only if the tenants’ household income is at least $175,000 for two years in a row.

The Manhattan district attorney’s office and the state attorney general’s office have sought Pinnacle work invoices, eviction records, responses to tenant complaints and other documents to try to determine whether there is a pattern of fraud, whether the costs of renovations were exaggerated and false billings were submitted, officials said, speaking on the condition of anonymity because the investigation is ongoing. Some of the accusations against Pinnacle, as well as some details of the investigations, have been reported by The Daily News.

Mr. Weiner said he was cooperating with the inquiries and has pledged to change Pinnacle’s business methods if either office requests it. The company has also hired two community outreach workers with the goal of forming a community advisory panel that would help guide Pinnacle operations.

Further, the company said it was willing to turn over the files of the 1,256 cases it is currently litigating against tenants to elected officials so they can be examined. Finally, it has agreed not to seek to evict elderly tenants without first contacting the city Department of Aging.

“I am looking every day to improve the operation,” Mr. Weiner said.

Many tenants however, say they have had unsettling encounters with Pinnacle and its lawyers.
Karen Flannagan, 53, said that even after she had presented Pinnacle documents that established her residency rights to her Harlem apartment after her mother died, the company slipped an eviction notice under her door and took her to court. Her mother had been the leaseholder and the family had lived in the apartment along with Ms. Flannagan’s teenage daughter for several years.

“Here I am trying to grieve, and I am having to worry about me and my daughter being thrown out,” she said.

After two years and 10 appearances in housing court, Pinnacle abruptly dropped the case a few years ago, she said. Pinnacle lawyers, however, said recently that Ms. Flannagan’s original documents had not been sufficient, though in a statement this week the company said it regretted any inconvenience it had caused her.

Marjorie Charron, 56, and her husband, Ted Charron, 59, moved into a Pinnacle building in Harlem in 2001, paying $1,900 a month for a two-bedroom apartment. They were told by Pinnacle that by law, the company could have charged as much as $2,500.

When the couple realized that other tenants were paying far less, they found out that Pinnacle had claimed to have performed $20,000 worth of remodeling work on the apartment before they moved in, which gave the landlord the right to raise the rent by a corresponding amount.
When they examined Pinnacle’s invoices for the work done on the apartment, however, they found that the company had included charges for 160 light bulbs, 75 pounds of grout, 130 gallons of paint, a $198 nail gun and a $424 drain cleaning device. They also found that some items listed as installed were not there, including oak flooring and a pedestal sink.

Other costs included maintenance work such as painting walls and sanding floors, the costs of which are not permitted to be passed on to a tenant by a landlord.

Five years later, the couple was awarded $10,000 in rent credits from Pinnacle, although they say the company owes them at least $15,000 more. Pinnacle lawyers acknowledged having made mistakes in the Charron case, but continue to legally challenge some of the couples’ claims.
“The average person can’t do this, so by default, Pinnacle wins almost every time,” Ms. Charron said. In a statement this week, Pinnacle said the items had been “inadvertently misallocated” and apologized.

In another case, Erica Martinez, who lives in a Pinnacle building in Washington Heights, received a $1,317.83 rent credit from Pinnacle after the State Department of Housing and Community Renewal ruled that she had been overcharged. In addition, the agency ordered Pinnacle to pay her triple the amount of the overcharge — or a total of nearly $4,000 — because the overcharge had been deemed “willful.”

Pinnacle lawyers said the company had made mistakes in the Martinez case, but had not done so purposely.

In another case, Pinnacle has attempted to pass on charges to tenants for the $21,700 cost of new front doors in one of its buildings in Harlem, even though they were replaced several years earlier. The state eventually quashed the attempt and the tenants’ rents were not increased.
“Pinnacle, if by the second or third overcharge they had said, ‘Something’s wrong, lets make it right,’ I would have given them credit, but they never have,” said Hazel Miura, a tenant organizer in the Bronx.

Another Pinnacle tenant, Mark Gordon, was charged through his rent for the cost of five toilets for his apartment in 2001, even though he had only two bathrooms. Pinnacle’s invoices also included the cost of replacing electrical wiring that appeared not to have been replaced and a double billing for the installation of kitchen cabinets.

Mr. Gordon said three years and $10,000 in legal fees later, Pinnacle resolved the case by agreeing to lower his rent. While at the time, Pinnacle did not admit making any errors, the company recently acknowledged making a mistake.

But Pinnacle’s lawyers said that in only about 50 cases had the company been found to have overcharged tenants and that only about 6 percent of its units were currently under litigation. Pinnacle says that most of the tenants it has moved to evict have failed to pay rent for at least two months.

Mr. Weiner said he instructed his employees to work out cases with tenants amicably, and that he only used the courts as a final resort. His lawyers say that despite handing out thousands of dispossess notices, no more than 351 people have actually been evicted since 2004.

ELIOT GOES IN PURSUIT OF PINNACLE

NEW YORK DAILY NEWS
Sep 1, 2006
By JUAN GONZALEZ

ATTORNEY GENERAL Eliot Spitzer has subpoenaed thousands of tenant records of the Pinnacle Group LLC, one of the city's biggest owners of rent-regulated housing.
The subpoena, issued Tuesday, is part of a widening probe by Spitzer into allegations that Pinnacle has systematically charged tenants who moved into renovated apartments far higher rents than state housing law allows.
"We received a records request in the form of a subpoena," company attorney Kenneth Fisher said in a written statement. "We had previously volunteered to cooperate with [Spitzer's] inquiry and are confident that Pinnacle's record of investing in and improving properties will result in a favorable outcome after the attorney general's office concludes its review."
Company chief Joel Wiener has defended Pinnacle's actions as legal and aboveboard.
Two months ago, Manhattan District Attorney Robert Morgenthau, in a separate probe, subpoenaed records the company filed with the state Department of Housing and Community Renewal to win approval for rent increases for major capital improvements.
Both investigations followed a series of reports in the Daily News earlier this year on Pinnacle's practices.
That series revealed the company had filed 5,000 eviction proceedings in Housing Court since January 2004 - one for every four of its tenants. The company has doubled or tripled the rents for its vacated units after installing new kitchens and bathroom fixtures. In several cases reviewed by The News, Pinnacle's higher rents were based on fictitious improvements it had claimed to state regulators.
At the Winthrop Gardens, a 330-unit former Mitchell-Lama complex in the Bronx, for example, DHCR recently ordered 19 rent rollbacks on renovated apartments, and the agency is reviewing eight more complaints.
Some tenants won up to $8,000 in back rent, and in at least two cases, DHCR awarded tenants triple damages, which can be assessed whenever the agency deems an overcharge "willful."
Pinnacle has claimed "clerical errors" at Winthrop.
"Any large organization is going to have a certain error rate," Fisher told The News earlier this year.
The Spitzer subpoena has demanded rent records and invoices for all apartment and building-wide improvements at Winthrop and for other Pinnacle properties throughout the city, a source familiar with the investigation said yesterday.
A spokesman for Spitzer declined to comment. But one law enforcement source said the AG's office is working closely with DHCR staff on the probe.
Pinnacle's applications for rent increases based on building- wide improvements - commonly known as MCIs - have also become a focus of Morgenthau's investigation.
In late June, a few weeks after the DA issued his subpoena, Pinnacle withdrew two applications for MCI rent increases it filed with the state, DHCR officials said.
One application was for $46,000 the company said it spent on a new roof at 86-06 35th Ave. in Queens; the other was for $36,000 for a new roof and entrance doors at 91 Fort Washington Ave. in Washington Heights.
"It's unusual for a company to voluntarily withdraw an MCI application," DHCR spokesman Peter Moses said.
Asked about the sudden withdrawal of those MCI applications, a spokesman for Pinnacle cited "business reasons."

This Is A Wakeup Call!

DOWNTOWN EXPRESS
Volume 19 • Issue 11 July 28- - August 3, 2006

PINES IN THE SKY FOR TRIBECA'S WEALTHIEST TENANTS

By Ronda Kaysen
The residents of 101 Warren St. will not need to trek upstate to enjoy pine trees — they’ll have a whole grove of them right outside their window.
The new luxury development currently under construction will come equipped with a bucolic grove of 101 Austrian pine trees set atop the building’s third floor terrace. The building’s sports center will open out on the grove, and all the residents in the 227 condo units will have access to the trees.
“There’s just the serenity and peacefulness of this grove,” said landscape architect Thomas Balsley. “The needles, the texture, the sound of the wind going through the pine trees above. It’s really an extraordinary experience, it’s almost religious. It’s one that would be transported to this roof as a gift to the residents of this building.”
The “gift” will be reserved for the condo residents only. The public and rental tenants in the building’s 163 rental units will not have access to the forest or any of the other amenities reserved for the condo residents.
“You’ll see the pines rising off from the roof, but you will probably have to go across the street to see them,” said Balsley.
In 2005, the Lower Manhattan Development Corp. set aside $15 million in Community Development Block Grants for 77 units of affordable rental housing at the lot, formerly called Site 5B. “They will have their own amenity rooms in the rental building,” Jeffrey Sussman, executive vice president for the developer, Edward J. Minskoff Equities, Inc., said in an e-mail. Rental tenants will have a separate fitness room and lounge and a different address: 89 Murray St.
The 1 million sq. ft. development has no public plaza, either. “The rental building was the giveback for the community,” Lawrence Kruysman, Sunshine Group’s director of sales for the property, told Downtown Express.
The Skidmore, Ownings & Merrill-designed building will open at the end of 2007 and already, buyers are grabbing at the luxury abodes, which range from $1.2 million for a one bedroom apartment to a whopping $16 million for a five-bedroom 34th and 35th floor duplex. Nearly 50 percent of the units have sold since they hit the market in April. “Sales have been great,” said Kruysman.
Promotional materials boast a Whole Foods Market, a sports center and the building’s proximity to P.S. 234, “the city’s top ranked public school.”
A promotional video shows a future Tribeca family—equipped with a handsome couple, their two curly-topped young children and miniature dogs—reveling in their sleek, modernist abode.
Current Tribeca residents have long complained that 234, which is currently at 120 percent capacity, will be further squeezed by the new residential developments in the neighborhood.

http://downtownexpress.com/de_168/pinesinthesky.html

Another Battle In The Gentrification War

http://walkthrough.nytimes.com/
Jul, 28, 2006
8:50 pm

The building at Broadway and 151st Street, where Christine Timm’s family considered an apartment before finding a bigger and better deal in the suburbs, is owned by the Pinnacle Group, which buys undervalued buildings in Harlem and Upper Manhattan.
Last spring, a group called BRUSH, an acronym for Buyers and Renters United to Save Harlem, sprang up in protest, accusing Pinnacle of harassing and evicting tenants, making substandard repairs and jacking up rents. The BRUSH blogsite details the controversy. – JOYCE COHEN

Tenants to Spitzer: Investigate This!

By Kristen Lombardi
Village Voice
Posted In The Streets
May 25, 2006

Tenants gained some ground in their ever escalating battle against the mega-landlord known as the Pinnacle Group, the most hated landlord in upper Manhattan these days.
This week, the Voice wrote about the litany of complaints that tenants have lodged against Pinnacle and its owner, Joel Wiener, which include everything from aggressive evictions to intentional harassment to possible fraud. Today, tenants took their complaints straight to Attorney General Eliot Spitzer, calling on the state's top cop to open a criminal investigation into the real-estate firm's tactics.

Dozens of tenants, members of the Mirabal Sisters Cultural and Community Center, in Washington Heights, gathered outside Spitzer's downtown offices on Broadway Street, carrying signs that read SPITZER INVESTIGUE A PINNACLE and DEMANDAMOS INVESTIGAR A PINNACLE, and chanting,"What do we want? Justice! Now!" City Councilman Robert Jackson, a Harlem Democrat and prime Pinnacle foe, made an appearance, complete with rousing remarks. And then Luis Tejada, who heads the Mirabal Sisters, delivered this message to Spitzer, a.k.a., Champion of the Little Guy: "We are here to tell you to investigate this company because Pinnacle is one of the big landlords in New York and is abusing the poor people of this city."
Thirty minutes into the demonstration, Henry Lemons, Spitzer's deputy chief investigator, descended from his office to the lobby to meet with Tejada and tenants. Tejada handed Lemons a 2,000-strong petition requesting a formal inquiry into Pinnacle for, as the petition states, "illegal rent increases and overcharges, deceiving management practices, illegal eviction, discrimination, and harassment." In an accompanying letter, the group also demands the attorney general review all Pinnacle eviction cases, repair complaints and harassment complaints, and rent increase applications in order to stop what is called "the frauds and abuses of Pinnacle."

Lemons promised to deliver the materials to the criminal investigations unit, which would assign an attorney to review the matter.
Wiener declined to comment on this latest development. But sources close to the firm say the petition is laced with errors and misinformation.
Whether Spitzer believes the same or not? Well, stay tuned.
As Lemons told Tejada today, "I assure you that we will respond."

http://www.villagevoice.com/blogs/powerplays/archives/002646.php

Tenants take allegations of Pinnacle abuses to Attorney General for full investigation

by TALISE D. MOORERAmsterdam News Staff
Originally posted 6/1/2006

Fueled by a desire for justice, tenants from vast properties owned by Joel Weiner, owner of the Pinnacle Group company, who possesses significant holdings throughout Manhattan and the outer boroughs, took their protest of alleged abuses by the real estate giant to the offices of the State Attorney General Eliot Spitzer.Just one week since an unprecedented joint hearing hosted by Community Boards 9, 10 and 12 was held at Riverbank’s Civic Center to hear testimony, frontline protestors rallied outside the Attorney General’s office in lower Manhattan. During the afternoon thrust, tenants presented petitions with nearly 2,000 signatures to Henry Lemons, Spitzer’s deputy chief investigator, who vowed to review complaints and respond within two weeks.Luis Tejada of Mirabal Sisters, a principal voice for social justice and better opportunities for immigrants, low income residents and people of color, says that Pinnacle has unleashed an arsenal of abuses using legal proceedings to uproot longtime residents to make way for luxury housing.Pinnacle is accused of filing thousands of eviction proceedings on grounds of non-payment when tenants have actually proved payments; or brought holdover proceedings even after a tenant has gone through great length to prove their tenancy.“They [Pinnacle] have also managed to get HPD-sanctioned recovery of Major Capital Improvement (MCI) expenditures on their properties, and our research shows that in many instances MCI claims that some properties were padded, fraudulent or non-existent,” said Tejada.Citing examples of such irregularities, Tejada said a tenant’s rent at 610 Riverside Drive spiked to $1,300 from her regular $725 per month as a result of “exorbitant” repairs in her apartment. Other examples of “suspicious” accounting include claims to HPD that the company spent $40,000 on a new floor when they allegedly spent between $1,100 and $1,900; the purported use of 105 gallons of paint to paint one apartment; intimated spending $450 for three (3) fuses; and claimed they spent $21,000 for the front door at the Riverside property back in 1998.“We feel that HPD should bear some criminal accountability for allowing such claims by Pinnacle to persist,” said Tejada.In mutual dissent, elected officials including Congressman Charles Rangel, Assemblyman Keith L. T. Wright, Council Member Inez Dickens, Assemblyman Herman D. Farrell, Jr., and Council Member Jackson, confirm they also suspect that Pinnacle is using dubious tactics to jack up the rent or to evict people from their homes. “Although, their underlying intent seems disguised by legitimate court proceedings,” said Council member Robert Jackson, whose constituency is in the 7th Council District in upper Manhattan.“I represent many of the people who are here today, and if my people feel they have been discriminated against, and that Pinnacle is doing illegal things to displace them to get higher rent, clearly there needs to be an investigation,” said Jackson.Jackson said following last week’s joint CB hearing, he and several other officials have teamed up to identify the best protection for the people they represent. So far, several of them are pursuing a budget of nearly $250,000 to retain two attorneys, paralegals and support staff to take up and review legal remedies; and an autonomous network of resources is taking shape to counterbalance Pinnacle’s purported “takeover.”Calls to Pinnacle for comment were unanswered. Previously, Weiner claimed all his actions are above board.Pending the Attorney General’s response to tenant’s petitions, some elected officials and housing watchdogs believe that a surefire way to end this crisis and prevent others from springing up is to repeal the Urstadt Law, a 1971 law that essentially took away control of rent regulation from New York City’s local government, that was pushed through by then Governor Nelson Rockefeller, and strengthened by the incumbent Governor George Pataki in 2003.The Urstadt Law was named after Rockefeller’s then Housing Commissioner, Charles Urstadt.Skewed by a body of legislators from upstate districts, where few people rent but own private homes, these changes in the rent regulation laws, “have resulted in what some estimate to be more than 100,000 rent stabilized apartments in New York City becoming ‘decontrolled,’ with rents hiked to whatever the landlord wants to charge,” according to a Gotham Gazette report.Repealing Urstadt would help the city regain home rule over rents and evictions and make housing advocates work less onerous.

http://www.amsterdamnews.org/news/Article/Article.asp?NewsID=69974&sID=4

Sheriff Notices Outlaws

By Juan Gonzalez
NY Daily News
Friday, May 26th, 2006

With evidence mounting that Pinnacle Group LLC has become a landlord run amok, state Attorney General Eliot Spitzer has finally taken notice.
Spitzer, who made a name for himself ferreting out crooks on Wall Street, has been virtually AWOL when it comes to policing state rent laws.
But his office has been peppered over the past few weeks with complaints against Pinnacle - one of the city's biggest owners of rent-regulated apartments - from elected officials, community leaders and hundreds of irate tenants, some of whose woes have been detailed in the Daily News.
"Our office is looking into this matter," Spitzer spokesman Brad Maione said this week.
Yesterday morning, the Mirabal Sisters Center, a West Harlem community group, gave Spitzer more reasons to get involved: a petition signed by more than 2,000 upper Manhattan residents claiming that Pinnacle is systematically forcing out longtime tenants and then illegally driving up rents to newcomers.
Company chief Joel Wiener says all of Pinnacle's actions are above board, and an independent survey he commissioned shows most tenants are satisfied.
"[Rent laws] are a convoluted and complicated system that at times are unfair to tenants and at times unfair to landlords," offered Ken Fisher, a lawyer and former city councilman who now represents Pinnacle.
For the past three weeks, this column has detailed how scores of tenants in up-and-coming neighborhoods - many of them elderly - have been victimized by Pinnacle.
Some are too poor or too overwhelmed to challenge Pinnacle's eviction mill, and have simply moved away.
Others have fought back.
This column reported last week that four tenants at 706 Riverside Drive in West Harlem won major reductions the past few years in their rents and thousands of dollars in refunds from Pinnacle after they filed successful overcharge complaints with state monitors or in the courts.
Lizette Gonzalez is another tenant who prevailed.
In November, the state's Department of Housing and Community Renewal directed Pinnacle to give her an $8,000 rent refund and reduce her $1,437 rent by nearly $400.
Back in March 2004, Gonzalez, who works for a big Manhattan law firm, moved with her husband and child into a Pinnacle building on Olinville Ave. in Allerton, the Bronx.
At the lease signing, a Pinnacle representative told her the rent was $1,350 for the two-bedroom unit, which had just been outfitted with a new kitchen and bathroom. That went up to $1,437 the following year.
One day, Gonzalez happened to meet a daughter of the previous tenant of the apartment.
"You're paying too much for rent," the woman warned her.
Gonzalez rushed to the local office of the state Division of Housing and Community Renewal and asked to see a rent history for her apartment.
She was stunned to discover that the previous occupant was paying just $594 a month. Pinnacle had more than doubled the rent - simply by claiming a major renovation for the vacant apartment.
Under state law, a landlord is permitted an automatic 20% vacancy increase for rent-stabilized units. If major renovations are done, the landlord can hike the rent by an additional 2.5% of the cost of the work.
Rent laws under Gov. Pataki have become so protective of landlords that owners don't even have to produce proof of those improvements until a new tenant files a formal challenge with DHCR.
If no challenge occurs within four years, the price set by landlord automatically becomes the legal rent.
Most tenants, of course, don't even know they can challenge a rent hike. Gonzalez did - forcing Pinnacle to produce invoices for $9,189 for the new kitchen and bathroom.
Even though the repair costs had not been inflated, Gonzalez's new rent still far exceeded what state law allowed.
DHCR monitors who reviewed Gonzalez's challenge quickly concluded that Pinnacle was overcharging her. In a Nov. 25 opinion, the agency reduced her rent to $1,088, and it directed Pinnacle to refund $8,070 to her.
Then there's the example of Department of Education employee Anthony Casasnovas.
Last June, he and two roommates signed a lease for an apartment at another Pinnacle building, 3657 Broadway in West Harlem. When they moved in, the apartment had not even been painted or cleaned, and mildew was sprouting all over the bathroom ceiling.
Pinnacle told them the apartment's legal rent was $2,200, which would have removed it from rent-stabilization rules.
But the company didn't charge them $2,200 - it offered what it called a "preferential" or discounted rent of $1,800 for the first year.
A few weeks ago, Pinnacle sent Casasnovas a lease renewal form for June 1 that would have increased the "preferential" rent to $1,900, but still claimed a legal rent of $2,200.
Sensing something wasn't right, Casasnovas went to DHCR to get a rent history. He learned the apartment's registered rent had been only $683 in 2002. That year, when a new tenant moved in, Pinnacle nearly tripled it, to $1,700.
Housing experts whom Casasnovas consulted told him the landlord would have to show more than $44,000 in renovations to justify that rent.
"There's no way they put that much money in this place," he said.
Pinnacle hasn't notified the state that it raised Casasnovas' "legal rent" to $2,200. As far as the state knows, the last registered rent for that apartment is $1,700 - still a stabilized unit.
But in Pinnacle's convoluted world, that apartment is already free of rent controls. This week, with the help of his tenant association, Casasnovas filed a rent overcharge claim with DHCR.

http://www.nydailynews.com/news/col/jgonzalez/story/421191p-355459c.html

Granny vs. Landlord

May 24, 2006
By Juan Gonzalez
NY Daily News
What kind of landlord tries to evict a 75-year-old woman from her rent-controlled apartment while quietly pocketing welfare rent checks in her disabled husband's name?
Welcome back to the world of the Pinnacle Group - the landlord that's filed an astonishing 5,000 eviction cases since January 2004 against its nearly 20,000 rent-regulated tenants. Many of them are seniors, disabled people or immigrants unaware of their legal rights.
Josephine Colon and her husband, Abdias Venegas, have been ensnared in the Pinnacle eviction mill for nearly two years.
In August 2004, a month after the firm bought a group of buildings on Morrison Ave. in the South Bronx, it sued to evict Colon. Since then, the firm has tried to oust nearly two-thirds of the 300 tenants in the complex.
At first, Pinnacle claimed Colon owed $1,290 in back rent on the two-bedroom apartment, where she has lived since 1983.
"I didn't owe them anything, and I have all my receipts to prove it," Colon said last week.
Her portion of the rent on the $439-a-month apartment is permanently frozen at $267.20. That's because the city's rental assistance program for impoverished senior citizens directly pays her landlord any increases above that amount.
Colon brought to Bronx Housing Court the postal money order receipts for her share of the rent. Yet Pinnacle's lawyers insisted they had no records of receiving four of those payments.
They demanded iron-clad proof: tracking reports from the post office for each money order in dispute - some dating back to August 2003.
In January 2005, after Colon found those tracking reports and brought them to court, Pinnacle credited her for all but $446 - meaning the eviction efforts would continue.
On March 29, 2005, a Pinnacle representative, as part of a motion for a final judgment to evict Colon, signed a sworn affidavit in court that she was still in arrears - now for $229.
It took until June 2005 before Pinnacle finally dropped its nonpayment case, even though they still claimed she owed $90.
But Colon's fight isn't over.
Even before the nonpayment case was settled, Pinnacle started a new Housing Court eviction action against her, this time claiming a horde of cats in her apartment had created such a foul odor that she was a nuisance to the entire building.
Colon and her family acknowledge she kept as many as 13 cats at one point. Such a brood, as you might imagine, left a strong odor. But the family says she has since given away all but three cats and cleaned up the apartment.
An assistant to Civil Court Judge Lydia Lai inspected Colon's apartment on Feb. 23, 2005, reporting there was "smell of urine in the apartment" but "no smell in hall outside."
The judge herself conducted two inspections, including one last December. She agreed with Pinnacle's attorney that the smell "seems to have seeped into the walls" and required professional fumigation.
Obviously reluctant to throw an old lady and her husband out, the judge urged Colon to do a thorough cleaning job.
Colon complied. On Dec. 29, a city health inspector who visited the apartment reported it was clean. There were "some odors," the inspector noted, but "no odor nuisance in hallway."
Pinnacle's lawyers won't give up. Yet another inspection by the judge and a final hearing is set for early June.
But the most amazing and bizarre part of this story is how Pinnacle, while fighting to evict Colon, had quietly cashed 27 rent checks for more than $2,000 from the city's Human Resources Administration for her pad.
The first check was mailed in March 2005, according to HRA records. It was earmarked as rental assistance for her husband, a Guatemalan immigrant partially paralyzed in an accident a few years ago.
The checks have been mailed by the city every two weeks since then, in varying amounts.
"They've never told me anything about that money and haven't given me any rent statements since they took me to court," Colon said yesterday.
Pinnacle also didn't tell the Housing Court about the HRA money. When I asked Pinnacle about those checks, a spokesman asserted last night that payments began in June 2005 and were being applied to Colon's rent. They actually said Colon now has a credit of $1,444.
Even here they were wrong. According to HRA records, Pinnacle started getting the checks in March 2005. By the end of April, the company had received more than $2,256 from the city.
Why would Pinnacle seek to evict Colon when she had a rent credit? And why would they keep Colon's rent surplus a secret from her? As it stands today, Pinnacle owes Colon more money than it demanded from her when they first put her on this eviction mill.

Pushed Off the Pinnacle

Tenants accuse mega-landlord of forcing them out
by Kristen Lombardi
Village Voice
May 23rd, 2006 11:47 AM
BRUSH tenants meet in Harlem: (from left) Marge Charron, Debbie Brown, Brenda Tyus Faust, and Kim Powellphoto: Stacy Kranitz
Pedro Garcia got a registered letter from his landlord last August, a few months after his parents moved from the apartment where he grew up in Washington Heights. Garcia, 28, who runs a family-owned grocery store, had lived with them in their rent-stabilized place on Riverside Drive for 15 years. In 2003, the Pinnacle Group bought the building, at 610 Riverside. By the time the letter arrived, Garcia had gotten used to hearing horror stories from his neighbors who'd found similar surprises in their mail.
His showed up after his parents bought a house and moved into it, leaving Garcia and his two kids in the apartment. Under city rental law, he should be able to continue living in the apartment. But Pinnacle moved to evict him, claiming he wasn't the legal tenant. His mother had signed the original lease, and she had tried to renew it in her son's name last year. "He wouldn't accept the lease with my name on it," Garcia says, referring to the company's owner, Joel Wiener. Nor would the firm cash his $620 monthly rent checks, letting him accrue $4,000 in arrears instead.
So Garcia has had to appear at Manhattan Housing Court. Twice, he has produced his birth certificate, utility bills, and rent receipts. Twice, Pinnacle has refused to settle.
"What he's doing to me he's doing to other people," says Garcia, his case still pending. "He wants to kick people out."
Over on West 150th Street, in Harlem, Ray Jones has also gotten a registered letter. His eviction notice from Pinnacle came last fall, after the company bought the 540-unit Dunbar Apartments, where he has lived with his family since 1967. Jones, 45, a retired corrections officer, has turned out to be one of hundreds of Dunbar tenants in jeopardy.
At first, Pinnacle took Jones to housing court for not paying rent. He was deliberately withholding his money to force the company to perform repairs on his rent- controlled apartment. In January, a judge ordered the landlord to fix eight code violations and compensated Jones, wiping away 30 percent of his $1,700 rent debt.
Next, the company challenged his legal tenancy. Over the past six months, he has appeared in housing court five times, armed with phone bills, old driver's licenses, and records dating back two decades to prove he has succession rights to his home. A judge ruled in his favor, yet Pinnacle still refused to give Jones new keys. To get a pair, he had to return to court—twice.
"I feel these are tactics," Jones says. "It's intentional harassment to try to get you out."
That sentiment came across only too clearly at a special May 15 hearing about Pinnacle, one of the city's largest owners of rent-regulated apartments. More than 200 residents from Upper Manhattan turned up for the forum convened by three community boards. There, for over two hours, politicians like Democratic U.S. representative Charles Rangel, of Harlem, and City Councilmember Robert Jackson listened to emotional testimonies from tenants. One of the renters called Pinnacle a "high-tech slumlord."
One by one, residents accused Pinnacle of aggressive court tactics—attempts to violate tenants' succession rights, for example, and to evict for bogus reasons. They complained that the company fails to make repairs, or delays repairs, or does shoddy improvements to raise rents beyond regulated limits. Mostly, they blasted the real estate giant for moving into their neighborhoods and moving them out.
Today, Pinnacle has come to epitomize the gentrification of northern Manhattan, where rents remain relatively low and apartments are large. The company has purchased dozens of buildings throughout Harlem, Washington Heights, and Inwood, quickly installing floodlights around the perimeters and posting trademark American flags out front. The effect is particularly pronounced at the now ultra- illuminated Dunbar complex, with its 40-odd buildings. "You probably can see the Dunbar from space now," says Michael Drake, who has lived there since 1967.
Nowhere is Pinnacle's stake in the area more apparent than along Riverside Drive, from West 135th north, where 12 or so properties shine brighter than the rest, their flags rustling in the wind. Wiener has owned some of these Riverside Drive properties since the 1990s. But he has quietly bought most of his 200-strong real estate portfolio in Manhattan more recently. A review of city records shows that he and his partnerships owned 19 buildings in 2003, and 37 a year later. Then, in August 2005, he purchased some 70 buildings in and around Harlem for more than $300 million in funding from the Praedium Group, a national private-equity firm. That doesn't take into account properties in the Bronx, Brooklyn, and Queens. Currently, city officials believe Pinnacle owns 420 buildings in all five boroughs, or 19,085 apartments.
Wiener declined an interview request from the Voice for this article. Instead, he issued a five-paragraph statement in which he insists his company's tactics are aboveboard. To hear him, the firm has never wrongly evicted a tenant. Nor has it done slipshod repairs or cosmetic improvements simply to hike up rent. Pinnacle, Wiener points out, has just done an independent survey of tenants and found that most are "satisfied."
"We work very hard to restore [buildings] into affordable, safe, attractive homes for our tenants," the statement reads. "We want them to be places we are proud of and places in which tenants are proud to live."
Try telling that to Kim Powell, of the newly formed anti-Pinnacle group Buyers and Renters United to Save Harlem, or BRUSH. A Pinnacle tenant for nine years, Powell, 45, who lives at 706 Riverside Drive, says she has been battling the landlord's methods. Case in point: In 1999, she noticed her bedroom wall bulging from water damage. Rather than fix the leak, she says, Pinnacle workers installed a layer of Sheetrock to disguise it. Last year, the Sheetrock crumbled and workers returned. Now, Powell says, the wall is buckling again.




"That's the kind of repairs Pinnacle does," she says. "It's one tactic."
BRUSH's Heidi Clyde counts herself a veteran of Pinnacle tactics too. Clyde, 28, has lived in her rent-stabilized apartment at 668 Riverside Drive since age two. Clyde's mother died in 1994, and Clyde remained in the apartment. Then in May 1999, Pinnacle bought the building. Within months, she says, "I started getting court papers from Pinnacle." In the next year, the company moved to evict Clyde repeatedly, claiming everything from nonpayment to illegal tenancy. Finally, in 2000, the company backed off and gave Clyde a lease.
"I've been fine since," she says. But hearing new tenants relay their court experiences has struck a chord for her. "It's obviously systematic."
Tenants and politicians alike fear that a pattern of gentrification is at work: A landlord gets existing tenants out, raises the rents, and in the long run, goes condo.
Says Councilmember Jackson, who has gotten involved with BRUSH, "By operation, Pinnacle is driving people out."
Not everyone believes that Pinnacle has a grand plan. Frank Ricci, of the Rent Stabilization Association, which represents 25,000 property owners in the city, including Pinnacle, doesn't buy the argument that Wiener is just looking to make a buck. Sure, some landlords pay too much for rent-regulated buildings, and they try to squeeze out existing tenants. But not Wiener.
"I don't believe that's his motivation," Ricci says. Two months ago, he says, Wiener came to visit him at the association, giving him a presentation on his real estate purchases. He showed him before-and-after pictures of buildings Pinnacle bought last August—including neglected structures owned by Baruch Singer, who ranks ninth on nycworstlandlords.com and made the NYC Housing Preservation and Development Department's list of "major problem owners" in 2003. During Wiener's spiel, Ricci relays, "he said to me, 'Look, I don't do this for the money anymore. I do this because I believe in preserving old buildings.' I have no reason not to believe him."
Besides, he says, Pinnacle has actually improved buildings. Over at the Dunbar, which had fallen into disrepair under Singer, city inspectors recorded some 2,000 violations before August 2005. Now, the number has dropped to around 400. City records show that the company has 19,470 violations to date, or an average of one violation per unit. As far as slumlords go, that's benign—indeed, city officials say the worst landlord has buildings with 20.9 violations per unit.
Even Pinnacle tenants say things have gotten better. Barbara Nienaltowski, of the Dunbar Tenants Association, says residents "were fighting a different kind of battle before." Under Singer, they couldn't get basic services. Security was weak. Trash littered the halls. Tenants had to fight for repairs.
Now, as it typically does, Pinnacle has installed 84 security cameras in the complex, as well as new doors and intercoms. It has improved the common areas, trimming gardens, collecting garbage, and cleaning out the flea-infested basements. Nienaltowski explains, "A lot of people here look out the window and think Pinnacle has done a good job, and they have. But the question is for who. Is it for the people who live here now or the people who will come and take our places?"
The threat of being pushed out has galvanized tenants to fight back. Back in November, for instance, Powell and eight other tenants got the idea to form BRUSH after receiving news that Pinnacle plans to convert their Riverside Drive buildings into condos. The company's asking price for their longtime homes? $800,000 to $1 million.
"There is clear displacement afoot," Powell says, "so we decided to put on the pressure."
And they have. In the past six months, BRUSH has spearheaded several community meetings drawing hundreds of angry Pinnacle tenants. In March, it pushed for the West Harlem community board to hold a hearing on the company, where board members say they heard more complaints about a single landlord than in recent memory. That month, after getting deluged by tenant phone calls, Democratic state assemblyman Keith Wright, of Harlem, joined BRUSH in what he calls "a good old-fashioned picket line" outside the company's midtown headquarters.
"You don't want this many forces to go up against you," Wright observes. Pinnacle critics may not have the deep pockets, he says, "But I go back to the old philosophy, 'The people united will never be defeated.' That's what has begun."
After last week's hearing, at least, elected officials are pledging to stop the so-called Pinnacle takeover. Congressman Rangel tells the Voice he's reaching out to local bar associations to round up lawyers to help tenants pro bono. And he plans to appeal to Mayor Michael Bloomberg. Perhaps the city could investigate Pinnacle, he says, or provide funding to save affordable apartments.
Other politicians have bigger ideas. Jackson talks about raising money for a nonprofit solely devoted to keeping Pinnacle in check.
For tenants, it's personal. "My roots are here," says Jones, who recently became vice president of the Dunbar Tenants' Association. "So I am not afraid to fight. I will organize, agitate, and do everything I can to ensure tenants don't lose their homes."

Tenants Say Landlord is Pinnacle Point of Poor Housing Conditions in Harlem

by TALISE D. MOORER Special to the Amsterdam News
Originally posted 5/18/2006
For the first time in the history of Central Harlem, Community Boards 9, 10 and 12 came together to host a joint hearing (chaired by Jordi Reyes-Mont Blanc) aimed at ending dubious practices by greedy landlords that displace longtime villagers, and ending the reign of the Pinnacle Group LLC in particular, whose tenants describe as a slumlord who fattens its burse by operating sub-par to poor housing accommodations.Stepping to the microphone one after another, angry tenants detailed their disgust and frustrations over documented complaints they’ve made concerning poor living conditions within their apartments, owned and operated by Joel Weiner, principal of the Pinnacle Group LLC, the real estate company that has filed an astonishing number of eviction proceedings since 2004 against tenants who live in its nearly 20,000 Apartments.Purportedly, those cases were suddenly dropped within hours after at Pinnacle got wind of media inquiries.Weiner has been under fire lately from housing advocates who say his company harasses rent-stabilized tenants, in order to vacate apartments and sharply increase rents.Weiner claims all his actions are above board.One tenant from Amsterdam Avenue testified that one-week after Weiner took over property from previous the owner, called “Singer,” a notorious slumlord among the city’s Top Ten, the property went up in flames in what investigators allegedly label a “suspicious fire.” Another said she was offered to buy her apartment - which currently has 20 active violations - for $500,000, astronomical she says, considering her struggle to pay the current $600 per month. And Michael Drake of the Lombard Tenants Association said that more times than not, Pinnacle uses unskilled and unlicensed laborers to “fix” things, further compounded by use of inferior materials.Congressman Charles B. Rangel roused the capacity crowd who parked on the edge of their seats at Riverbanks’ Civic Center with an announcement that the Community Service Society has agreed to scrutinize every proceeding or summons brought to housing court by the Pinnacle Group. “You are the wind beneath our political wings,” said Rangel while expressing how moved and proud he is that the community has taken an organized stand. He added, “What we’re doing here is stopping a broader conspiracy to take our community away from us - by stealing away affordable housing,” stated Rangel.Rangel told the audience that they have also earned the appreciation of lawyers working on their behalf - knowing that there is unity in the community. Rangel noted the burden of proof in court in this instance, “should not be on the back of the single mother struggling to care for her family; not the senior citizen; nor any of us.”Activists including candidate for state senator, Bill Perkins, claim that the Pinnacle Group is a front and vanguard of devious efforts that allows landlords to hide their interests while the larger company gobbles up the housing stock for luxury condos, driving up prices beyond the reach of current tenants.Popular opinion among elected officials is that this type of practice in Harlem can conceivably be the dangerous prototype for break out groups elsewhere who will work to displace tenants, particularly in the remaining boroughs.Over the last decade The Pinnacle Group has purchased many buildings and hundreds of units within Manhattan, “many of which have already been converted to luxury housing and others remaining empty, possible evidence of warehousing for profit.”In response to an outcry from constituents, community organizations and leaders in greater Harlem and Northern Manhattan, namely Assemblyman Keith L.T. Wright (D-Harlem), mobilized a rally outside Pinnacle headquarters to send a message that unfair tactics and the harassment and unnecessary evictions of tenants located uptown would not be tolerated.“We have been in a long-term battle against gentrification practices and slumlords in Harlem; and, we are well acquainted with Baruch Singer-the notorious slumlord of the Dunbar Houses and five other buildings who reportedly sold his properties to The Pinnacle Group,” said Wright. He added, “In the last few years we have seen a population and development growth never before seen in Harlem. Unfortunately, some of the growth has been at the expense of our current residents, who at the hands of a select number of questionable developers are being pushed out of the neighborhoods they helped form. That is unacceptable and intolerable and must cease and desist.”Representatives of the Pinnacle Group declined an interview with the AmNews, but released a written statement defending their business dealings stating, “It is unfortunate that there are a number of baseless and simply erroneous charges circulating among tenants, public officials and within the community,” writes Robert Barletta, spokesperson for the Pinnacle Group.Pinnacle previously told the AmNews that their employees, “comprise a diverse and dedicated group that work together to provide residents of Pinnacle buildings with the services that all residents deserve.” And, to facilitate home ownership, Pinnacle admits having filed plans to convert certain of its rental properties to condominiums.

Battle Against Pinnacle Group Resembles '78 Riverdale Row

Norwood News
PUBLISHED BY MOSHOLU PRESERVATION CORPORATION
Vol. 19, No. 10
May 18 - 31, 2006

By HEATHER HADDON
Deirdre Burke and Laura Spalter thought something was fishy when their rent checks went uncashed and new leases weren’t issued after their Riverdale complex was sold. Those warning signs led to a protracted legal battle waged by tenants of the Vinmont Houses against their new landlord, Joel Wiener. That was 28 years ago. But today, Wiener and his current company, the Pinnacle Group, has been using many of the same tactics to push out long-term tenants, as the Norwood News has reported in a series of articles. In 1978, Wiener bought Vinmont, a small complex of 1- and 2-family homes along Mosholu Avenue and West 255th Street. The 30 units were the brainchild of Robert Weinberg, a prominent city preservationist and architect. He nestled Vinmont into a wooded area, constructing a series of affordable rental homes where residents did much of the maintenance work themselves. The charming houses, with front and back yards, are attached with shared utilities. They were a renter’s dream.“People loved them,” said Burke, the principal of PS 340 in North Fordham, who moved into the complex in 1975. “I paid $194 a month for … an apartment with a fireplace, with trees around it.”Wiener purchased Vinmont, and two neighboring complexes, after Weinberg’s death. The two did not share the same vision. Wiener’s goal was to sell off the homes for about $100,000 each within roughly six months, according to tenants. The ensuing battle lasted for over three years.(Wiener did not respond to questions for this story, but a spokesman for his company issued a statement. “It is absolutely ridiculous and unfair to ask Pinnacle about something from more than a quarter-century ago,” said the statement, released by the Marino Organization, a public relations firm retained by Pinnacle.) After the deal, tenants noticed that they stopped receiving rent increases, and rent checks weren’t even cashed. “At the time, we thought it was cool,” said Spalter, a longtime MS 80 teacher, who was then in her late 20s. Tenants eventually grew suspect, and started talking and meeting together. They were alarmed when Wiener fired the property’s longtime caretaker. And they were further angered when they realized Wiener intended to separate the houses into individual properties, sell them and evict those who couldn’t pay. His attitude was, “I’m an owner. I can do it and I will do it,” as Spalter put it. That didn’t sit well with tenants, even among wealthy residents who could have bought the complex outright. They stuck together and formed an association, first successfully moving to get Vinmont recognized as a rent stabilized property. Wiener brought in bulldozers to begin separating the connected sewer and water lines. Tenants went to court and got a restraining order to stop the work.The cat and mouse game cycled on. Wiener filed paperwork to carve out the different parcels later in 1978. Residents would sneak out in the middle of the night and dig up the pipes being installed. And in one of the most important victories, not one resident would let Wiener into their homes to shut off their water connection.“He intimidated the 80-year-old senior citizens, but they still said no,” Spalter said.The war escalated. Residents hired Sheldon Lobel, a lawyer specializing in zoning issues, and Spalter began a letter writing campaign. Burke mastered the pipe blueprints, and searched for permit irregularities at the Buildings Department. Wiener sent eviction notices, but never acted on them.Residents were relentless. “He was so afraid of us,” said Spalter, a lifelong Bronxite who has fought many civic battles. “One day he came to my door and [my husband] yelled out, ‘If he’s bothering you, I’ll go get the gun.’” The firearm was fictitious, but the tenants’ unified resistance was a real source of consternation for Wiener. Franklin Illfelder, a resident who was a teenager at the time, refused to let Wiener inspect his family’s garage. Illfelder, 50, who still lives at Vinmont, says Wiener shoved him in response.Finally, Wiener offered the 1- and 2-family homes to tenants for $50,000 and $60,000, respectively. With $20,000 in fees and a difficult legal road ahead, residents went for the offer, but not before making sure all tenants had a route to ownership. In 1981, Wiener sold them the properties. It was a huge, hard-fought and immensely satisfying victory. “This was the whole basis of our being,” Burke said. The fight was chronicled in a New York legal journal, according to Spalter, but tenants shied away from local reporters’ inquiries for fear it would distract them from their objective. As some of the original residents died or moved away, the story went untold. While the Vinmont battle is long over, thousands of other tenants in buildings bought by Wiener’s current company, the Pinnacle Group, are now facing an uphill contest against him. A growing number of tenants citywide are complaining about the same issues — harassment, eviction notices, the removal of existing building staff — since Pinnacle purchased over 400 rent stabilized buildings beginning in 2002. They fear that Wiener plans to convert their homes into condos. Burke’s and Spalter’s advice to these tenants is to stick together and fight hard. “If you are unlucky enough to live in a Wiener building, form a tenants association and get a lawyer right away,” Spalter said.

http://www.bronxmall.com/norwoodnews/news/N60518page2.html