BRUSH - BUYERS AND RENTERS UNITED TO SAVE HARLEM, INC.

New York Landlord's Portfolio Goes Into Special Servicing

2009-04-06T20:12:00.002-04:00

Pinnacle Group Not Meeting Financial Expectations on Upper West Side Portfolio
By Mark Heschmeyer
April 1, 2009
Standard & Poor's Ratings Services placed its ratings on commercial mortgage-backed securities (CMBS) GE Commercial Mortgage Corp. Series 2007-C1 Trust on CreditWatch with negative implications. The action comes primarily from problems with loans tied to New York landlord Pinnacle Group and its owner Joel Weiner. The loan, called the Manhattan Apartment Portfolio loan ($192.1 million), is secured by 1,083-unit apartment units in 36 apartment buildings on the Upper West Side of Manhattan. Most of the units in the portfolio are subject to rent-stabilization laws and the borrowers had intended to convert rent-stabilized units into market-rent units. The loan was transferred to special servicer LNR Partners Inc. on Feb. 26. Standard & Poor's preliminary analysis of the MAP loan indicates a 48% valuation decline since issuance in 2007. At issuance, Standard & Poor's estimated the borrower would be able to convert 88 units per year to market rents; however, only 14 units have been converted since issuance. Since its October 2008 review the interest reserve has declined 34% to $11.8 million. The master servicer, KeyBank Real Estate Capital, reported debt service coverage of 0.36x for the year-ended ended Dec. 31, 2008, compared with 0.40x for the year ended Dec. 31, 2007. Wiener has ownership and management interests in an estimated 100 buildings totaling approximately 20,000 rental apartment units in the New York City metropolitan area. Currently, New York City landlords cannot increase rental rates on rent stabilized units more than approximately 4% annually until they reach $2,000 per month and the tenant income exceeds $175,000 for two consecutive years. New York state is proposing tenant-friendly changes that could increase the rent trigger to $2,700 and the income trigger to $250,000. This can extend a unit's participation in the rent regulation program up to eight additional years, according to recent analysis by Fitch Ratings. The Manhattan Apartment Portfolio properties in GE 2007-C1 consist of 36 multifamily buildings (1,083 apartment units and two office suites) situated between West 100th and West 161st streets.
# of Bldgs # of Units Neighborhood Boundary
21 484 Upper West Side Between West 100th and West 108th streets
4 104 Morningside Heights Between West 113th and West 115th streets
6 311 West Harlem Between West 127th and West 139th streets
2 53 Hamilton Heights Between West 147th and West 148th streets
3 131 Washington Heights Between West 156th and West 161st streets

Controversial Pinnacle Group Sheds Uptown Property

2009-04-06T20:03:00.002-04:00

The NewYork Observer
By Dana Rubinstein
March 25, 2009 3:32 p.m

Controversial landlord Pinnacle Group has shed one of its uptown properties for $12.5 million, according to city property records.
A group called Latham Properties, affilitated with the budget Latham Hotel on East 28th Street, bought 169-175 East 101st Street, a 119-unit apartment building, on February 26.
The buyer could not be reached for comment. The seller had acquired the building in 2004 for $9.4 million.
Pinnacle Group, which, according to a July 2007 New York Post article titled "'Slum Bum' Hit with RICO Suit," owns 420 buildings in Manhattan and the Bronx, has been the subject of repeated attacks by housing advocates for its tactics in turning affordable units into market-rent apartments.
According to a 2006 Village Voice exposé, a community forum on Pinnacle's alleged abuses attracted 200 residents:
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.
In January of 2008, Pinnacle hired Eastern Consolidated to market a portfolio of its properties, hoping to get more than $70 million for 384 apartments, according to an article by my colleague Eliot Brown. Sources say that Eastern Consolidated did not do this deal.

Kid to Riverside Tenants: No Garage Related Rent Hike

2008-12-28T12:40:00.003-05:00

Brooklyn Heights Blog
December 17th, 2008

New York State Senator-elect Daniel Squadron has written tenants of the Riverside Apartments assuring them that they will not be subject to garage construction related rent increases. Squadron spoke to the building’s landlord, the Pinnacle Group, who claim that they will not seek an MCI increase for the construction of its proposed garage.
The content of the letter after the jump.

To the residents of Riverside Apartments

Dear Neighbors:

I want to share a quick update with you about my ongoing conversations with the owner of your building.

Riverside tenants have expressed a few concerns to me: that the proposed garage construction will disrupt life in the building, that it could permanently make the courtyard impossible to enjoy, and above all that the building owner might use the garage construction to seek a Major Capital Improvement (MCI) rent increase for rent-regulated tenants.

I want to let you know that I have personally received an assurance from the landlord’s representative that the landlord will not seek an MCI increase for the work he proposes to do to install a garage. Additionally, the landlord is not allowed to use any garage work as a pretext for evicting any tenants.

This news is an important development and I wanted to share it with you as soon as possible. Of course, it is only the beginning of a longer process. As I expressed previously to tenants in the building, I have serious concerns about the proposed garage, its impact on the quality of life for residents of the building, and the precedent it would set for the Heights Historic District. I look forward to continuing to work with the tenants of the building.
Please feel free to call my office any time with concerns about this or any other issue. I can
be reached at 646-472-5712 or info@danielsquadron.org.

Role of Private Equity Worries Tenant Advocates

2008-07-23T09:56:00.000-04:00

NORWOOD NEWS

July 10, 2008

“The prices being paid for Bronx apartment buildings are out of step with the buildings’ actual profitability.”- Greg Jost University Neighborhood Housing Program

by CHLOE TRIBICH

Ed. note: This article has been corrected. In the original version we erroneously reported that the Pinnacle Group had purchased 10 Bronx buildings in 2008. The buildings were purchased by several limited liability corporations (LLCs) through Chestnut Holdings. The Norwood News regrets the error.

In 2005, when the Pinnacle Group first roused the ire of tenants for aggressive tactics in housing court, landlords funded by unregulated capital were an anomaly. More common were the likes of Nicholas Haros and Frank Palazzolo, owners reviled for their determination to squeeze rental income from deteriorating buildings.

Pinnacle is backed by the Praedium Group, which is in turn controlled by the Caisse de depot et placement du Quebec, one of the top 10 real estate pension fund managers in the world. No longer just the province of local landlords, rent regulated Bronx real estate has whetted the appetite of international finance.

Pinnacle has been joined in the northwest Bronx by Ocelot, backed by the Israeli-owned Eldan Tech Ltd.; SG2, backed by Blackrock, of which Merrill Lynch owns 50 percent; Urban American Management, created by the Ramius Capital Group; and Normandy Investment Partners, which is funded primarily by international investment and corporate and state pensions. These firms have purchased portfolios of properties from New York-based landlords such as Nicholas Haros, the Palazzolo Investment Group, Jacob Selechnik and the Bodak family. The University Neighborhood Housing Program estimates that over 14,000 apartment units in the Bronx are owned by private-equity-backed landlords.

The management style of these firms – including level of commitment to repairs and aggressiveness in housing court – varies. But they share the basic perspective that rents in regulated buildings can be increased significantly through “value enhancement” and “aggressive management” – catchphrases that reflect a strategy of capitalizing on vacancies to increase rents and carrying out Major Capital Improvements.

From the landlords’ perspective, gentrifying neighborhoods, where regulated rents are far below market, are the most fertile grounds for this strategy. In Urban American’s Sunnyside, Queens properties, for example, new renters are paying upwards of $1600 for two bedrooms, most of which underwent improvements or repairs during vacancy. Some apartments have even surpassed the $2000 rent deregulation mark.

Gentrification on Kingsbridge?
But gentrification feels a long way off from 131 W. Kingsbridge Rd. According to city public records, this building was purchased by SG2 for just over $100,000 per apartment in February 2007. There are 384 violations in this 31 unit building, 239 of them documented since May 2007.
Gladys Cardona has lived at 131 W. Kingsbridge Rd. for 10 years. When her bathroom ceiling fell, exposing wooden slats and pipes from the apartment above, SG2 didn’t respond to her phone calls. Only when HPD threatened to deploy its emergency repair unit did the landlord order the ceiling patched, she said.

“I’m tired of this,” said Gladys, who is 60 and still battles vermin infestation and lack of hot water. “But the costs of moving are very high.”

Miguel Jimenez, Gladys’ neighbor, shares her concerns. He says he called SG2’s Walton Avenue office four times last month about the hole in his bedroom ceiling and didn’t receive a call back. Finally he visited the office in person and secured a commitment from manager Evelyn DeJesus to address the problem. Jimenez never heard from her again and DeJesus did not return two voicemail messages or an e-mail from the Norwood News.

Jimenez’s rent is $922, but Section 8 pays the majority. Like Cardona, he would like to move, but cites fees for credit checks, moving costs and security deposits as expenses he can’t afford. For now, the two are staying where they are, hoping that organizing assistance from the Northwest Bronx Community and Clergy Coalition will help to force repairs.
Cardona and Jimenez are not alone. Their neighborhood, Kingsbridge Heights, is one of the poorest neighborhoods in the poorest borough in the City. According to the Furman Center, 59 percent of households in this community district make less than $35,752 a year; 31 percent make less than $16,556. Though rents here are low by city standards, the median proportion of income tenants pay for rent – stands at 37.8 percent. Thirty percent is considered acceptable by HUD.

Further east, at the SG2-owned 750-760 Pelham Parkway South, tenant association president Ray Ruiz lists broken front door locks, malfunctioning boilers and rent overcharges as persistent problems. This building has nearly 140 units and 768 housing maintenance code violations, 687 documented in the past year alone. “We thought Michael Goldberg [the previous landlord] was bad, but at least they answered the phone,” says Ruiz, who has lived in his apartment since 1997. “SG2 people just have voicemail that they never check.”
Some improvements

In some SG2 buildings, however, tenants have seen improvement. Charles Long, a fire safety inspector and 10-year resident of 1212 Grand Concourse, joined with members of Community Action for Safer Apartments (CASA) to meet with SG2 manager John Sutherland. Long was mostly pleased – management responded quickly to concerns about inadequate outdoor lighting and elevator breakage.

“In some ways SG2 is a saint compared to the previous landlord [Jacob Selechnik],” said Long. “But they’re in business, and they wouldn’t be curing these violations if they didn’t expect to get their capital improvement increases.”

Long counts on continued maintenance improvements and hopes that noise pollution and late-night partying will come under control as well. But he is ambivalent about what these changes will mean for the poorest tenants – those on public assistance and Section 8 – who he is certain will be pushed out. “I have never seen such an army of workers sent to renovate vacant apartments,” Long says.. He has not met any new tenants yet, but believes they will pay significantly more.

These observations have not escaped community groups and local leaders. Fernando Tirado, district manager for Community Board 7, held a meeting with SG2 managers in February 2008. “We wanted to meet with them because we were concerned about the number of properties they had purchased – 23 in our Community Board alone and 75 in the whole Bronx-- but we got a good response. They assured us that they were not there to push people out, that they were there to improve the properties and that this was an investment that they cared about.” Tirado reports that they have not heard complaints from tenants of SG2 buildings in recent months.

In 2005, the University Neighborhood Housing Program noted that purchase prices of Bronx buildings were increasing disproportionate to rental income, sometimes to as much as $67,000 per unit. UNHP worried that landlords’ inability to make mortgage payments on overleveraged properties would lead to another wave of disinvestment and property deterioration.
According to City records, in 2007, SG2 paid $6,632,467 for 1212 Grand Concourse -- $108,729 per apartment. There is little in the data, it seems, to justify SG2’s enthusiasm. According to the Rent Guidelines Board, Bronx landlords’ net operating income increased only 3% from 1990 to 2006, far less than the other boroughs.

And unlike poor renters in Washington Heights or Sunnyside, Bronx tenants live far from Starbucks and other markers of middle class desirability. It is unclear where – if tenants like Cardona and Jimenez were to leave -- their higher-paying successors would come from.

“The prices being paid for Bronx apartment buildings are out of step with the buildings’ actual profitability,” said Greg Jost of UNHP. “Landlords’ expenses are increasing faster than rent income, but these sales seem to assume that either the building can be flipped for a higher amount, or that rents can be driven way up, or both. But residents’ incomes here are among the lowest in the city and I don’t see any higher income folks moving to our area.”

Now batting: Pinnacle's baseball league

2008-07-23T09:44:00.000-04:00

The Real Deal
05/01/2008

It's baseball season and the Pinnacle Group, which has been investigated by the state attorney general and the Manhattan district attorney for allegedly trying to remove rent-stabilized tenants, is pitching something it hopes will bring some good PR. It has sponsored the New York City Middle School Baseball League, a new spring league for 200 middle school students. Neighborhoods represented include Chinatown, Lower Manhattan and West Harlem. Teachers launched a similar league two years, but few students could afford the $30 uniforms. Now Pinnacle is paying for uniforms, gloves and equipment. CEO Joel Wiener has led Pinnacle's controversial effort to buy more than $1 billion in distressed buildings in Upper Manhattan and the Bronx over the past few years. TRD

Group Wields Racketeering Law Against Landlords to Combat Illegal Immigration

2008-07-23T09:42:00.000-04:00

By THE ASSOCIATED PRESS
Published: June 22, 2008
PLAINFIELD, N.J. (AP) — A federal lawsuit challenging the right of landlords to rent to illegal immigrants has stoked tensions over immigration that have been rising for years here.
A group opposed to illegal immigration filed suit against a Plainfield property management company this month, seeking to set a legal precedent by using a federal law normally employed against racketeers to punish landlords who rent to illegal immigrants.
The lawsuit accuses the company, Connolly Properties, of allowing so many undocumented tenants to live in its buildings that it amounted to unlawful harboring and should be considered a criminal enterprise that encouraged illegal immigration.
The suit was brought by the Immigration Reform Law Institute in Washington — the legal arm of the Federation for American Immigration Reform. The institute previously supported ordinances in Hazelton, Pa., and Riverside, N.J., that tried to punish landlords who rented to illegal immigrants or businesses that hired them.
A judge overturned the Hazelton ordinance, ruling it unconstitutional, and Riverside rescinded its ordinance, with officials saying the town could not afford the legal costs of defending it.
Flor Gonzalez, head of the Latin American Coalition in Plainfield, worries that her city may become the latest battleground in the nationwide debate over immigration.
She says that tensions over the city’s large immigrant population have been rising, with a recent series of beatings and robberies of immigrants, raids by federal immigration officials and ticketing of day laborers by the police.
“This is the worst it’s been. There is a lot of unfriendliness and disrespect against immigrants, and a lot has been happening quietly,” Ms. Gonzalez said. “We need big help in this town.”
Plainfield’s mayor, Sharon M. Robinson-Briggs said that she was not familiar with the details of the lawsuit, but added that immigrants deserved respect, regardless of their status.
“All our residents deserve to be treated fairly and equitably, whether they are born here or not,” she said.
The lawsuit was filed against Connolly Properties on behalf of a former Connolly employee and two tenants who are American citizens. The tenants charge that they were steered into buildings occupied by illegal immigrants who were too afraid about their legal status to complain about decrepit conditions, according to Michael M. Hethmon, a lawyer for the Reform Law Institute.
Connolly Properties has several rental complexes in northern New Jersey and Allentown, Pa.
Ron Simoncini, a spokesman for Connolly, said executives were bewildered as to why the company had become the target of the suit, which was filed under the Racketeer Influenced and Corrupt Organizations Act, known as RICO.
He added that he could not comment further before the company filed a response to the suit.
Mr. Hethmon said his group decided to take the case as part of its strategy of “attrition through enforcement,” or urging illegal immigrants to leave the country by making it more difficult for them to find employment and housing.
“We have felt for a long time that the racketeering statute would be useful in dealing with situations where businesses and commercial enterprises were heavily involved with illegal immigration,” Mr. Hethmon said.
“We’ve also felt that individual citizens, communities, neighborhoods and law-abiding small businesses have always needed tools with which they can defend themselves against the harmful effects of illegal immigration.”
Using anti-racketeering laws to prosecute landlords is a strategy that immigration experts say they expect to be tried in other parts of the nation.
“I think it’s a new tactic, because some of the other things haven’t worked,” said Donald W. Benson, a lawyer in the Atlanta office of the San Francisco labor law firm Littler Mendelson.
“Congress couldn’t reach a consensus to reform the immigration laws, states are trying to fill in the gaps and they’re having varied success, and local groups are trying to work through local ordinances, so it’s just one part of a much bigger picture of immigration struggles in the U.S.,” he said.
“I have no idea why they picked Plainfield,” said Christian Estevez, a member of the Plainfield school board who also sits on Gov. Jon S. Corzine’s panel on immigrant policy.
“This has caught us by surprise.”
Mr. Estevez said that he and other Plainfield residents were contacting national immigration advocacy groups for help.
According to the 2000 census, Plainfield, a city of some 50,000 people, is about 60 percent black, with the remainder roughly split between white and Hispanic.
In the past decade, Ms. Gonzalez said there had been a large influx of Hispanic immigrants, mostly from Central America.
The Plainfield City Council president, Harold Gibson, said he was unaware of the lawsuit, but that city officials had been trying to address concerns over immigration.
He cited the city’s efforts to find a solution to the day laborer situation that respected the laborers’ right to look for work while addressing community concerns.
“I think that the people in Plainfield, in terms of the City Council and the general population, they frown on illegal immigration, they don’t want undocumented persons living in the town, generally speaking,” he said.
“However, my position is that I don’t think we should set ourselves up as an immigration authority in terms of people who come from other countries and work hard to better themselves and help their families.”

Rent Destabilized

2008-05-21T16:32:00.000-04:00

Gretchen Morgenson, assistant business and financial editor and columnist at The New York Times, and Ben Dulchin, deputy director of the Association for Neighborhood and Housing Development, discuss the impact of investment companies on New York’s rent stabilized housing stock. Then, Frank Ricci of the Rent Stabilization Association, representing landlords of rent-regulated buildings, and Rob McCreanor, director of legal services at the Immigrant Tenant Advocacy Project of the Catholic Migration Office in Sunnyside, Queens. Open Phones: Eric Gioia, Queens Councilmember (D-26), is holding hearings on this issue. Do you live in a building that’s recently been bought with venture capital, with landlords such as Vantage, Normandy Partners, The Dermot Company, Westbrook Partners or the Dawny Day Group? Talk to Councilman Gioia about your experience.
"As Investment Firms Buy Up Buildings, Tenants See Bullies" NYT, 5/9/2008

http://www.nyc.org/shows/b1/eposides/2008/05/12

As Investment Firms Buy Up Buildings, Tenants See Bullies

2008-05-21T08:45:00.001-04:00

By GRETCHEN MORGENSON
New York Times

Published: May 9, 2008
Private investment firms have been amassing what may seem like unusual stakes in New York real estate: they have bought hundreds of apartment buildings with thousands of rent-regulated units across the city that produce decidedly meager returns.

Investors as Landlords

Times Topics: Rent Stabilization and Rent Control

As regulatory filings and promotional materials show, the companies expect to generate higher returns quickly by increasing rents after existing tenants vacate their units. Their success depends upon far higher vacancy rates than are typical in rent-regulated apartments in New York.Some residents and tenant advocates say that they began seeing what they consider a pattern of harassment of low-income tenants this year and suspect that it is a result of the new owners’ business models. Tenants have been sued repeatedly for unpaid rent that has already been received by the landlords; they have been sent false notices of rent bills, lease terminations and non-renewals; and they have been accused of illegal sublets. The companies dispute the charges of harassment and say they are protecting their rights.Nevertheless, tenants must answer the notices in court, but many have responded by moving out, court documents indicate. When they vacate the apartments, the owners can increase the rents substantially. “Predatory equity is undermining the best efforts of New York City and state elected officials to slow the loss of affordable housing,” said Benjamin Dulchin, deputy director of the Association for Neighborhood and Housing Development, a nonprofit organization. “Both the private equity funders and the lending institutions are aware, or should be aware, that harassment of tenants is taking place as a result of their financial models.” Private investment funds have boomed in recent years, buying companies they considered undervalued in industries as diverse as communications, hotels and energy, streamlining operations and then selling them at a profit. For example, private equity firms have bought nursing homes, often slashing expenses and reducing staff to increase their profit. New York provides an unusual opportunity because it is one of the few cities with a large inventory of apartments whose rental rates are regulated and kept below market levels. In the last four years, developers backed by private equity firms have acquired almost 75,000 rent-regulated apartments, Mr. Dulchin said, or about 6 percent of the city’s 1.2 million such units. Major private equity-backed participants in this market include Vantage Properties, which has partnered with Apollo Real Estate Advisors; the Pinnacle Group, a unit of Praedium Capital; and Normandy Real Estate Partners. These companies often make clear that raising rents is crucial to their financial goals. On its Web site, Normandy Partners states “the increased institutional appetite for New York City rent-stabilized housing transactions” and adds: “There is a near-term opportunity to increase cash flow by converting rent-stabilized apartments to market rate as tenants vacate units.”The companies say that they are not harassing tenants and that they are only trying to protect their rights by enforcing legitimate rules governing regulated apartments. But the New York City Rent Guidelines Board says the vacancy rate on rent-regulated apartments is 5.6 percent each year. Buildings with vacancy rates far higher suggest resident harassment, tenant advocates say. Vacancy rates have risen above 20 percent in some buildings owned by Vantage Properties; in some Normandy buildings, the rates exceed 30 percent. If an apartment is rent regulated, yearly increases cannot exceed the amount set annually by the Guidelines Board. Most recently, it was 3 percent on a one-year renewal lease. When an apartment becomes vacant, rents can climb as much as 20 percent. When that rent rises above $2,000, regulations no longer apply, and tenants must pay market prices. To generate returns expected by private equity investors and to pay off the debt used for their purchases, tenant advocates say that managers of the properties are intimidating residents in the hopes of forcing them to leave so that rents can be raised.

Rent-regulated apartments account for 57 percent of the total in the Bronx, 42 percent of the apartments in Brooklyn, 59 percent in Manhattan, 43 percent in Queens and 15 percent of those on Staten Island, the Guidelines Board says. Many of the buildings bought by private equity investors are in neighborhoods that are being gentrified.

Vantage Properties, led by Neil L. Rubler, has paid more than $1 billion in the last two years to buy 9,200 rent-regulated apartments in Queens and Upper Manhattan. Investing alongside Vantage in many buildings is Apollo Real Estate Partners, an investment firm founded by William Mack in partnership with Apollo Management, a private equity firm created by Leon D. Black, a former Drexel Burnham Lambert banker and acolyte of Michael R. Milken . Last month, Mr. Black announced a plan to sell $500 million worth of Apollo Management shares to the public. Apollo Real Estate Partners will not be part of that sale. A spokesman for Mr. Black said it was a separate company in which he had a stake but exercised no control over it. In a group of buildings in Queens with 2,124 apartments, Vantage has filed almost a thousand cases in housing court against tenants since October 2006, according to Robert McCreanor, director of legal services at the Immigrant Tenant Advocacy Project of the Catholic Migration Office in Sunnyside.Mr. McCreanor said he searched public records for similar actions by the previous landlord. He found no more than 350 in any year. “What’s offensive about these business practices is they seek to generate above-average profits by displacing poor people and people who are vulnerable,” Mr. McCreanor said.A spokeswoman for Apollo Real Estate declined to comment on the accusations. But Mr. Rubler called them baseless. “Any exploration of the way we conduct business would reveal that we are steadfastly determined to uphold the rights of our residents and have absolutely no interest in harassing them,” he said. “They are our valued customers, and we treat them as such.”Mr. Rubler said most of his tenants have positive experiences. Claudia Williams, of Corona, Queens, was asked by Mr. Rubler to talk with a reporter. She said that Vantage was allowing her to live in her mother’s apartment even though she had not been the primary leaseholder. Phyllis Miller, a resident of Savoy Park in upper Manhattan, said she believed that tenants who were unhappy with Vantage simply disliked change.But Jose Ricardo Aguaiza, 45, who works as a doorman in Manhattan, said he has lived in the same apartment in Woodside for 14 years and never had a problem until Vantage took over in 2006. Since July 2007, Mr. Aguaiza has been sued by Vantage three times, twice for nonpayment of rent that he was able to demonstrate the company had received. “They refused to give me a renewal contract,” Mr. Aguaiza said. “And in court, the lawyer from Vantage offered to give me three months’ free rent for moving out.” Mr. Aguaiza said he turned down the offer. On April 10, Mr. Aguaiza and five other rent-stabilized tenants living in Queens sued Vantage. The plaintiffs say the company has engaged in deceptive practices that violate New York’s consumer protection laws. Five more tenants are joining the suit.Janice Williams, who works as a freelance producer in television, has lived in a Vantage building in Sunnyside since July 2005 and is a plaintiff. When she moved in, the building was owned by Nathan Katz Realty. In October 2006, Vantage bought the building. Ms. Williams said the property managers rejected her request for a lease renewal in April 2007. They said she was not entitled to the rent-regulated unit because her primary residence was in Greenwich, Conn. But the Sunnyside apartment has been her primary residence since September 2005, Ms. Williams said, and is on her driver’s license and her voting card. She appealed to the New York State division of housing and community renewal and won. “Our apartment building is 72 units, and a little over 20 apartments in the span of a year and a half have turned over since Vantage bought it,” said Ms. Williams, who has organized tenants.The turnover Ms. Williams cited is in keeping with a description of Vantage’s strategy in a 2007 document filed with the Securities and Exchange Commission after its purchase of 455 rent-regulated apartments in Washington Heights. The filing described the company’s business model as a “recapturing” strategy. Under the plan, Vantage expected in its first year to turn over 20 percent to 30 percent of the units, five times the typical vacancy rate. Vantage aimed to recapture 10 percent of the units each year afterward. Only 5 of the 455 units were empty at the time of the filing. All but one unit was regulated, with average monthly rent of $752, or 65 percent below market. Once the apartments become vacant, the document said, Vantage will renovate the units and raise rents “to market levels.” That will generate enough cash to service the $70 million in debt that comes due in 2014.Vantage’s debt service is an estimated $1,098 monthly on each unit, almost 50 percent more than the average rent. Mr. Rubler said that the description of the recapture program was “not our words,” but those of the debt security’s underwriter, Credit Suisse Securities. “I think they overstated significantly the focus on turnover in the business plan,” he said.When asked about legal actions taken against tenants, Mr. Rubler said all were mounted solely to protect his company’s rights. “Only in instances where we need to act to protect our own rights do we ever find ourselves in any litigation with a tenant and it is never with the intention to harass them,” he said.The company is also meeting with its tenants to improve communications, he said. Normandy Partners, with almost 2,000 rent-regulated apartments in 42 buildings in the Bronx, East Village and Sunnyside Queens, is another significant landlord backed by private equity. It is a partner with Vantage in 1,650 units in Queens, the Bronx and Brooklyn. Mr. Dulchin said the Normandy Partners’ buildings have also had high turnover — more than 30 percent — since they were purchased by the investors. A spokesman for Normandy declined to comment. Pinnacle Group is a third big developer that has joined forces with a private equity firm, Praedium Capital of Chicago. In December 2006, Pinnacle settled a suit brought by the New York attorney general’s office accusing it of rent-gouging. Pinnacle paid $100,000 without admitting to or denying the accusations. The company did not return a phone call seeking comment.Responding in part to indications that harassment is systemic, Mayor Michael R. Bloomberg signed legislation in March making it illegal for a landlord to file repeated and baseless court proceedings to force a tenant to vacate an apartment. Under previous rules, tenants could take their landlord to housing court only over the apartment’s condition or for a failure to provide essential services.

Victory for Tenants as Harassment Bill Passes

2008-03-04T23:26:00.000-05:00

By Bennett Baumer February 28, 2008 Posted in IndyBlog Email this article
Yesterday the New York City Council unanimously passed Intro 627-A, a bill that gives tenants the right to sue landlords for harassment. The bill was cosponsored by Speaker Christine Quinn among 34 other council members. The harassment bill is a big victory for tenants under the gun to move out of affordable rent-regulated apartments that landlords could charge exorbitant rates.
The landlord lobby – the Real Estate Board of New York (REBNY) and Rent Stabilization Association had waged a concentrated campaign against the bill. The landlord lobby’s central line of attack was to argue that Intro 627-A would clog the courts with tenant initiated frivolous lawsuits. In opposing the pro-tenant legislation, real estate attorney Adam Leitman Bailey commented that Intro 627-A would cause “thousands of lawsuits, millions of dollars in legal fees.”
Harassment Bill Says: March 4th, 2008 at 4:39 pm
Proposed Int. No. 627-A
By Council Members Garodnick, Mark-Viverito, The Speaker (Council Member Quinn), James, Comrie, Mendez, Jackson, Lappin, Gerson, Palma, Liu, Brewer, Yassky, Dickens, Recchia Jr., Gioia, DeBlasio, Eugene, Addabbo Jr., Gentile, Gonzalez, Koppell, Monserrate, Sanders Jr., Sears, Stewart, Martinez, Arroyo, Foster, Vann, Baez, Mealy, Avella, Barron, White Jr., Gennaro and The Public Advocate (Ms. Gotbaum).
A Local Law
To amend the administrative code of the city of New York in relation to the duty of an owner to refrain from harassment of tenants and remedies for the breach of such duty.
Be it enacted by the Council as follows:Section 1. Subdivision a of section 27-2004 of the administrative code of the city of New York is amended by adding a new paragraph 48 to read as follows:48. Except where otherwise provided, the term “harassment” shall mean any act or omission by or on behalf of an owner that (i) causes or is intended to cause any person lawfully entitled to occupancy of a dwelling unit to vacate such dwelling unit or to surrender or waive any rights in relation to such occupancy, and (ii) includes one or more of the following:a. using force against, or making express or implied threats that force will be used against, any person lawfully entitled to occupancy of such dwelling unit;b. repeated interruptions or discontinuances of essential services, or an interruption or discontinuance of an essential service for an extended duration or of such significance as to substantially impair the habitability of such dwelling unit;c. failing to comply with the provisions of subdivision c of section 27-2140 of this chapter;d. commencing repeated baseless or frivolous court proceedings against any person lawfully entitled to occupancy of such dwelling unit;e. removing the possessions of any person lawfully entitled to occupancy of such dwelling unit;f. removing the door at the entrance to an occupied dwelling unit; removing, plugging or otherwise rendering the lock on such entrance door inoperable; or changing the lock on such entrance door without supplying a key to the new lock to the persons lawfully entitled to occupancy of such dwelling unit; org. other repeated acts or omissions of such significance as to substantially interfere with or disturb the comfort, repose, peace or quiet of any person lawfully entitled to occupancy of such dwelling unit and that cause or are intended to cause any person lawfully entitled to occupancy of a dwelling unit to vacate such dwelling unit or to surrender or waive any rights in relation to such occupancy.§2. Section 27-2005 of the administrative code of the city of New York is amended by adding a new subdivision d to read as follows:d. The owner of a dwelling shall not harass any tenants or persons lawfully entitled to occupancy of such dwelling as set forth in paragraph 48 of subdivision a of section 27-2004 of this chapter.§3. Subdivision h of section 27-2115 of the administrative code of the city of New York is amended by numbering the existing section as paragraph 1 and by adding a new paragraph 2 to read as follows:(h)(1) Should the department fail to issue a notice of violation upon the request of a tenant or group of tenants within thirty days of the date of such request, or if there is a notice of violation outstanding respecting the premises in which the tenant or group of tenants resides, or, if there is a claim of harassment pursuant to subdivision d of section 27-2005 of this chapter, the tenant or any group of tenants, may individually or jointly apply to the housing part for an order directing the owner and the department to appear before the court. Such order shall be issued at the discretion of the court for good cause shown, and shall be served as the court may direct. If the court finds a condition constituting a violation exists, it shall direct the owner to correct the violation and, upon failure to do so within the time set for certifying the correction of such violation pursuant to subdivision (c) of this section, it shall impose a penalty in accordance with subdivision (a) of this section. Nothing in this section shall preclude any person from seeking relief pursuant to any other applicable provision of law.(2) (i) Notwithstanding the provisions of paragraph one of this subdivision, where one or more allegations of harassment pursuant to subparagraphs b, c and g of paragraph 48 of subdivision a of section 27-2004 of this chapter is made, to the extent that any such allegation is based on physical conditions of a dwelling or dwelling unit, such allegation must be based at least in part on one or more violations of record issued by the department or any other agency. Where any allegation of harassment is based on more than one physical condition, the existence of at least one violation of record with respect to any such physical condition shall be deemed sufficient to meet the requirements of this paragraph.(ii) The provisions of subparagraph i of this paragraph shall apply to any counterclaim or defense presented by a tenant in any proceeding in the housing part of the civil court if such counterclaim or defense is based on one or more allegations of harassment. In the event there is no violation of record with respect to at least one physical condition alleged by such tenant such counterclaim or defense shall be dismissed without prejudice.§4. Section 27-2115 of the administrative code of the city of New York is amended by adding new subdivisions m and n to read as follows:(m) (1) Notwithstanding any other provision of law, a violation of subdivision d of section 27-2005 of this code shall be a class c immediately hazardous violation and a penalty shall be imposed in accordance with this section, provided, however, that such violation shall not be deemed a continuing class c violation of record beyond the time that the conduct constituting such violation occurred.(2) If a court of competent jurisdiction finds that conduct in violation of subdivision d of section 27-2005 of this chapter has occurred, it may determine that a class c violation existed at the time that such conduct occurred. Notwithstanding the foregoing, such court may also issue an order restraining the owner of the property from violating such subdivision and direct the owner to ensure that no further violation occurs, in accordance with section 27-2121 of this chapter. Such court shall impose a civil penalty in an amount not less than one thousand dollars and not more than five thousand dollars for each dwelling unit in which a tenant or any person lawfully entitled to occupancy of such unit has been the subject of such violation, and such other relief as the court deems appropriate. It shall be an affirmative defense to an allegation by a tenant of the kind described in subparagraphs b, c and g of paragraph forty-eight of subdivision a of section 27-2004 of this chapter that (i) such condition or service interruption was not intended to cause any lawful occupant to vacate a dwelling unit or waive or surrender any rights in relation to such occupancy, and (ii) the owner acted in good faith in a reasonable manner to promptly correct such condition or service interruption, including providing notice to all affected lawful occupants of such efforts, where appropriate.(3) An owner may seek an order by the court enjoining a tenant from initiating any further judicial proceedings against such owner pursuant to this section claiming harassment without prior leave of the court if (i) within a ten-year period such tenant has initiated two judicial proceedings pursuant to this section against such owner claiming harassment that have been dismissed on the merits and (ii) a third or subsequent proceeding initiated by such tenant against such owner pursuant to this section claiming harassment during such ten-year period is determined at the time of its adjudication to be frivolous. Except for an order on consent such order may be sought by such owner simultaneously with the adjudication of such third or subsequent judicial proceeding.(4) Where the court determines that a claim of harassment by a tenant against an owner is so lacking in merit as to be frivolous, the court may award attorneys fees to such owner in an amount to be determined by the court.(5) Nothing in paragraphs three or four of this subdivision shall be construed to affect or limit any other claims or rights of the parties.n. The provisions of subdivision d of section 27-2005 of this chapter, subdivision m of this section and subdivision b of section 27-2120 of this chapter shall not apply where a shareholder of record on a proprietary lease for a dwelling unit, the owner of record of a dwelling unit owned as a condominium, or those lawfully entitled to reside with such shareholder or record owner, resides in the dwelling unit for which the proprietary lease authorizes residency or in such condominium unit, as is applicable, or to private dwellings.§5. Section 27-2120 of the administrative code of the city of New York is amended by renumbering the first paragraph as subdivision a, and adding a new subdivision b to read as follows:a. The department may institute an action in a court of competent jurisdiction for an order requiring the owner of property or other responsible person to abate or correct any violation of this code, or to comply with an order or notice of the department, or for such other relief as may be appropriate to secure continuing compliance with this code. An action for injunctive relief hereunder may be brought in addition to other sanctions and remedies for violations of the code, or may be joined with any action for such other sanctions and remedies except criminal prosecution.b. Any tenant, or person or group of persons lawfully entitled to occupancy may individually or jointly apply to the housing part of the civil court for an order restraining the owner of the property from engaging in harassment. Except for an order on consent, such order may be granted upon or subsequent to a determination that a violation of subdivision d of section 27-2005 of this chapter has occurred.§6. If any sentence, paragraph, section or part of this local law shall be adjudged invalid by a court of competent jurisdiction such judgment shall not impair or invalidate the remainder thereof but shall be confined to that part deemed invalid.§7. This local law shall take effect immediately.

PRESERVING ACCESS TO AFFORDABLE HOUSING

2008-02-07T15:18:00.000-05:00

COUNCIL VOTES TO PROTECT LOW-INCOME RENTERS FROM DISCRIMINATION
January 30, 2007 – At today’s Stated Council meeting, the members of the New York City Council will vote on legislation to ensure full opportunity for New Yorkers with limited incomes to obtain affordable housing by prohibiting discrimination against tenants based on lawful source of rent payment. This legislation will help maximize the use of available Section 8 vouchers and help low-income families access safe and permanent housing.

PROHIBITING DISCRIMINATION IN HOUSING BASED ON SOURCE OF INCOME.

The Council will vote to prohibit discrimination against prospective tenants based on lawful source of income, protecting New Yorkers from housing discrimination and helping those with limited incomes find and maintain affordable housing by maximizing the use of Section 8 vouchers or other forms of governmental rent payment in the City. This vote comes after nearly a year of working with the New York City Housing Authority (NYCHA), the Department of Housing Preservation and Development (HPD), landlord and tenant advocacy groups to improve the administration of the Section 8 voucher programs.
“With the rising cost of housing, it’s critical that we take every possible step to preserve and increase access to affordable housing, and this legislation continues the Council’s efforts to do just that,” said Council Speaker Christine C. Quinn. “This legislation, thanks to the hard work of the Council, ACORN and other housing groups, will not only increase access for people eligible for Section 8 vouchers to affordable housing, it will fully protect an individual’s right to housing, regardless of their financial circumstances.”
“As difficult as it is to find affordable housing in New York City, it is significantly harder to find an apartment with a Section 8 voucher,” said General Welfare Committee Chair Bill de Blasio. “This legislation will help maximize available Section 8 vouchers and help low-income families access the housing they are eligible for and desperately need.”
Understanding that small landlords may have difficulty with the administrative burden that can come with the Section 8 program, the legislation exempts landlords who own five or fewer units. However, rent controlled tenants who reside in these small properties would come under the protection of the law. The law applies to all housing accommodations, regardless of the number of units in each, of anyone who owns at least at least one property of six or more units.
A study released by ACORN NY in April of 2007 revealed that of 122 available studios and one bedroom apartments within section 8 limits listed on Craigslist, The Daily News or The New York Times classifieds, only 16 of the owners surveyed would accept Section 8 vouchers. In January of 2007, Mayor Bloomberg announced that 22,000 new Section 8 vouchers would be made available in New York City by the federal government, greatly increasing the number of low-income residents who can afford an apartment. This protective legislation will help maximize the use of available Section 8 vouchers and help low-income families access the housing for which they are eligible.

Embattled Landlord Pinnacle Selling 22 Manhattan Buildings | The New York Observer

2008-02-07T15:14:00.000-05:00

Embattled Landlord Pinnacle Selling 22 Manhattan Buildings The New York Observer

Council Proposes Crackdown on Abusive Landlords

2007-11-02T02:19:00.000-04:00

Columbia Spectator
By Melissa Repko
PUBLISHED OCTOBER 19, 2007
City Council members aim to crack down on tenant harassment with a bill they introduced in front of over 100 supporters on Wednesday.
The proposed legislation, spearheaded by City Council Speaker Christine Quinn, would make tenant harassment a class C violation of the Housing Maintenance Code. Violators would pay from $1000 to $5000 for each offense.
“For too long, tenants have been powerless against landlords who seek to pursue them illegally through threats or interruption of basic services and increasingly through frivolous court proceedings,” said Councilmember Dan Garodnick, D-Manhattan. “This bill gives tenants a fair chance to fight back.”
Locally, allegations against landlords of tenants harassment have been widespread. Tenants in buildings owned by the Pinnacle Group in West Harlem and elsewhere, along with the advocacy group Buyers and Renters United to Save Harlem, have filed a federal lawsuit against Pinnacle, saying that the landlord has mounted a concerted campaign of harassment aimed at getting tenants out of their rent-regulated apartment so they can be “flipped” to market rate.
While Quinn stressed the positive aspects of growth and development, she warned against taking extreme measures to evict tenants. “We need to recognize that with development often comes gentrification pressures,” she said. “There are bad apples out there who are responding to that gentrification by deliberately and willingly engaging in campaigns of tenant harassment.”
“There is no compassion in the tactics that are being implicated,” said Councilmember Melissa Mark-Viverito, D-Manhattan Valley and East Harlem, adding that many tenants being targeted are elderly. “We are here to say that greed will not trump dignity.”
Rachael Klausner, a 96-year-old resident of 200 East 26th St., voiced fears of landlord harassment in her home of 64 years. Ever since there was a fire in the building on April 16, one third of the building’s tenants—most of whom are elderly—have been homeless and there have been no repairs to the site.
“These are the people who are being harassed out of their homes,” said Christine LaFroscia, another resident of the building and the president of its tenant’s association. “Only by changing the system will we be able to put our heads to our pillows at night knowing that people like Rachael and others like her are not going to be evicted from their homes.”
Quinn responded to concerns that landlords would be inundated with frivolous lawsuits, pointing to the bill’s safeguards. The bill spells out the offenses that are considered harassment, which include cutting off services like water and heat, deliberately failing to make repairs, and falsely claiming that tenants have failed to pay rent. Tenants who file three lawsuits that are deemed baseless are not allowed automatic standing to file a fourth.
With Quinn’s backing and widespread support within the council, the proposal looks likely to pass. Mayor Michael Bloomberg has not taken a public position on the bill.

Suit Against Landlord Could Turn Class Action

2007-09-21T00:46:00.000-04:00

September 16, 2007

Thousands of tenants may join a lawsuit against a prominent Manhattan landlord. In July, the tenant group BRUSH filed a federal racketeering lawsuit against the Pinnacle Group and owner Joel Wiener. The suit claims Pinnacle made shoddy repairs to apartments, violated rent stabilization laws, issued illegal evictions, and harassed tenants to try an force them out and raise rents. Now, Public Advocate Betsy Gotbaum says a petition for an upgrade to the lawsuit has been filed. It would add every Pinnacle tenant to the lawsuit, about 21,000 people. In July, a spokesman denied trying to force tenants out of their homes and said the group is committed to preserving affordable housing.
http://www.ny1.com/ny1/content/index.jsp?&aid=73653&search_result=1&stid=8

LAWSUIT FILED AGAINST THE PINNACLE GROUP AND CEO JOEL WIENER

2007-07-12T00:02:00.000-04:00

BUYERS AND RENTERS UNITED TO SAVE HARLEM, INC. (BRUSH)
FILES A RICO LAWSUIT AGAINST REAL ESTATE GIANT, PINNACLE GROUP, AND CEO, JOEL WIENER.

NEW YORK, NY -- Buyers and Renters United to Save Harlem, Inc. (BRUSH), and the law firm of Jenner & Block, LLP, has filed suit in the United States District Court for the Southern District of New York against one of New York’s biggest residential landlords, The Pinnacle Group, and its CEO, Joel Wiener.

The lawsuit, filed with the full support of NY Public Advocate Betsy Gotbaum, and Manhattan Borough President Scott Stringer, accuses Pinnacle and Wiener, who together own over 21,000 apartments in New York City of engaging in wanton and widespread violations of New York rent laws as well as the Federal Racketeer Influenced and Corrupt Organizations Act (“RICO”) statutes.

In the lawsuit, BRUSH contends Pinnacle engaged in:

“… reckless and intentional systematic acts and business practices of demanding and collecting rents in amounts beyond those permitted under the law …” and “… an overall pattern and practice of tenant harassment, which includes: … failing to timely make necessary and reasonable repairs, to address housing maintenance code violations, or to provide essential, required services and then threatening and taking action to evict tenants who have reasonably and legally withheld rent because of such illegal conduct; (iii) commencing unfounded eviction actions to demand rent that already has been paid; (iv) commencing unfounded proceedings to challenge tenants' succession rights and harassing and intimidating tenants by demanding an unduly burdensome, unjustified, and unwarranted amount of evidence regarding a tenant’s succession rights; (v) unjustifiably refusing to accept tenants’ rent checks and then claiming non-payment of rent and commencing eviction actions or other proceedings challenging succession rights; (vi) directing, encouraging and allowing the superintendents of its buildings to, among other things, harass tenants by making unacceptable and shoddy repairs or making false promises to conduct repairs; scheduling appointments that the superintendents do not attend; issuing false notices and documents regarding tenants’ activities or conduct; and ignoring tenants’ complaints and acting in a hostile and retaliatory manner to tenants who have made complaints; (vii) failing to offer tenants lease renewals, or lease renewals on proper terms; (viii) failing to comply with orders issued by the New York Department of Housing and Community Renewal requiring Pinnacle to pay monetary awards to tenants for rent overcharges and rent reductions; (ix) seeking to restore original rents that have been reduced in accordance with Department of Housing and Community Renewal orders, knowing that the housing violations giving rise to the rent reductions have not been resolved; and (x) refusing to respond to and ignoring tenants’ inquiries and requests for documents relating to rental histories, rent increases based on individual apartment improvements and major capital improvements, and lease renewals.”
Kim Powell, President of BRUSH said: “The Pinnacle Group is a parasite in the community, profiting unfairly and illegally from harassment and loopholes in the rent laws without giving anything back to the community. They have acquired thousands of affordable, rent-controlled and rent-stabilized units in New York City, and have systematically victimized tenants by illegally inflating rents while at the same time reducing the quality of repairs and services. What’s Pinnacle’s goal? To push out long-term tenants, drive up rents until apartments are deregulated, and shove through condo conversions that replace affordable rentals with million dollar condos. This landlord has made a mockery of the NYC Housing Court, abused and crippled NYS and NYC housing agencies by its egregious conduct. We hope that this lawsuit sends a clear message to the Pinnacle Group and other landlords that the community will not tolerable abusive and illegal conduct.”
BRUSH is a non-profit association founded to promote tenants’ rights and preserve affordable and quality housing in the West Harlem and Northern Manhattan communities. BRUSH does outreach in the community and hosts seminars and workshops to raise awareness of tenants’ rights. BRUSH has played a key role in organizing tenant associations and works with various state and local agencies and officials in an effort to combat displacement of tenants by the forces of gentrification.

-- END --
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Death Notice

2007-06-28T16:36:00.000-04:00

It is with profound sadness we announce the death of one of our BRUSH Board members, Ms. Debbie (Maudline) Brown. Ms. Brown served on the Board since the organization's inception, and up until her death.

As a Board member and resident of the Harlem community she was very active, vocal, and responsive to the needs of the community. A "tower of strengh" and a woman dedicated to the cause of the community. She will be missed. Our Condolences to her family, and friends.

Tenants Nominate Pinnacle Group as NYC's Most Abusive Landlord Twice

2007-01-29T12:23:00.000-05:00

Pinnacle Unpopular Despite Gift
Tenants Nominate Group Twice as 'New York City's Most Abusive Landlord'
By Kevin Shin
Issue date: 1/25/07 Section: News

The Pinnacle Group, one of the city's largest owners of rent-regulated apartments, has fallen out of favor with residents and seems to be trying to buy its way back into their hearts.On Tuesday, before a city-wide tenants' convention of over 500 tenants, Pinnacle garnered two nominations out of a total of 12 for "New York City's Most Abusive Landlord." Tenants' delegations from Harlem and Washington Heights/Inwood, areas in which Pinnacle owns the majority of its rent-regulated apartments, submitted the nominations.These nominations came on the heels of Pinnacle's announcement that it would give a $500,000 grant toward the founding of the Harlem Senior Tenants and Landlords Reconciliation Center. The center, which will be administered by the Harlem Consumer Education Council, aims to educate Harlem's elderly tenants, property managers, and landlords about their rights and obligations."This worthy initiative will offer tenants, and particularly seniors, a vehicle to address any concerns in an open, timely, and cost-effective manner," said Joel Wiener, CEO of the Pinnacle Group, in a press release earlier this month. "The Pinnacle Group believes in setting the standard for housing in New York City and listening to the communities we serve."The initiative comes at a turbulent period of strife between Pinnacle and many tenants renting its properties."In a two-year period, Pinnacle has not only bought close to $1 billion worth of buildings in substandard conditions, but since 2004, it has started eviction proceedings for a quarter of its tenants," said Anne Ingersoll, president of the Community Union of Washington Heights and Inwood, and spokesperson for Washington Heights/Inwood at the nomination convention.Ingersoll and her delegation chose to nominate Pinnacle for as the city's most abusive out of the over 100 landlords her union oversees."They are much more aggressive than most other landlords," said Ingersoll of Pinnacle. "They send inspectors to private homes asking for personal information, file eviction proceedings on false grounds, and serve unwanted tenants with complex legal documents."
These tactics, said Ingersoll, are meant to intimidate and push out lower-income tenants, many of whom are immigrants who are elderly or have limited command of English.Once tenants either move out or are evicted by the court, landlords are legally allowed to raise rent. Because the law allows landlords to successively raise the rent each time a tenant moves out, residents claim the law has created incentives for landlords to pursue transient tenants, such as students, who may only rent for semesters at a time. Once rent reaches at least $2,000 per month, apartments are no longer classified as rent-stabilized and the landlord can charge market price.Harlem tenants at the convention echoed many of the same allegations against Pinnacle."Every time a person is taken to court, you lose one-twentieth of your working days per month," said Rafael Luna, a community activist who, after deliberating on eight other area landlords, nominated Pinnacle on behalf of Harlem tenants. "A lot of people that they take to court work two, three jobs. They can't afford to go to court. So they say, 'Screw this shit, let me take the $2,000 or whatever shitty amount Pinnacle pays me to leave, and just get out.'"Pinnacle hopes that their contribution to the Harlem Senior Tenants and Landlords Reconciliation Center will help smooth out such potential conflicts in the future."This model is unique and innovative because for the first time in Harlem's recent history, a program's primary focus will be to bring together senior tenants, landlords, and property managers to address issues all three groups face everyday," said HCEC founder Florence M. Rice, in a press release. "It will provide a forum where they can come together and work in a non-threatening environment to develop, not necessarily perfect, but workable solutions that each group can live with."

Stuy Town Tenants Sue over Rents

2007-01-24T09:46:00.000-05:00

Stuy Town tenants sue over rents
The Associated Press

January 23, 2007, 10:06 AM EST

A group of tenants at Stuyvesant Town/Peter Cooper Village want to see their rents rolled back, saying the complex's owners illegally charged market-rate rents while benefitting from tax breaks that should have precluded them from doing so.The suit, filed Monday in Manhattan state Supreme Court, names both the previous owner of the complex, Metropolitan Life Insurance Company, and Tishman Speyer Properties, which bought it for a record $5.4 billion last year. Most of the more than 11,000 units in the property are under rent regulation, while about 3,000 are not. The class-action lawsuit asks that those 3,000 apartments be put back under rent regulation for another 10 years, until a series of city-given tax breaks expire. Those tax breaks are given in exchange for unit owners agreeing to keep rents reasonably low. Those filing the lawsuit say that means the owners shouldn't be charging market-level rent.The suit also asks for $320 million in damages, The New York Times reported in Tuesday's editions.A spokesman for Met Life declined to comment to the paper, while a spokesman for Tishman said the suit was without merit.

List of 12 of NYC's Landlords

2007-01-24T09:37:00.000-05:00

List of NYC's 12 'worst landlords'
By Justin Rocket Silverman
amNewYork Staff Writer

January 24, 2007

The 'Dirty Dozen' list provided by the Association for Neighborhood and Housing Development:
Mt. Eden, the Bronx: Jacob Finkelstein for not fixing leaks at 105 E. Clark Place
Washington Heights: Joel Weiner of The Pinnacle Group LLC, which is said to have begun legal proceedings against 5,000 tenants
Central Brooklyn: John Tsevelos of G-Way Management
West Side Manhattan: Jay Podolsky for harassing tenants at SRO hotels-
Lower East Side: Nathan Shuchat at 141 Ridge Street
Williamsburg: Adam Mermelstein and TreeTop Development LLC
Queens:George Subraj for his many buildings in the Jamacia area.
Bushwick: David Melendez is said to have more than 673 open building code violations-
Harlem: Joel Weiner of The Pinnacle Group LLC
South Bronx: Doug Peterson of NYC Capital Value Fund II LLC for pressuring Section 8 tenants to move out
Chinatown: Benjamin Shaoul for bringing frivolous lawsuits
South Brooklyn: Julia and Carlos Guzman for harassing tenants at 268 Dean Street

Advocates Name the Worst Landlords in NYC

2007-01-24T09:32:00.000-05:00

Advocates name city's 'worst landlords'
By Justin Rocket Silverman
amNewYork Staff Writer

January 24, 2007

Housing advocates Tuesday released a "dirty dozen" list of landlords, who they claim are harassing tenants to force them out of rent-stabilized apartments.In years past, the most notorious landlords were criticized for letting their buildings fall apart. But in this rapidly gentrifying modern city, owners are coming under fire for trying to clear their buildings of tenants to make way for luxury apartments. "We are hard-working families, paying our rent on time, and don't deserve to be harassed," said Jacqueline Hernandez, a resident of 188 South 3rd St. in Williamsburg. "The apartments we live in are full of mold and drafty windows. Meanwhile, we see nice new windows being installed in empty apartments."The owners of 188 South 3rd -- Adam Mermelstein and TreeTop Development LLC -- were voted "New York's Most Abusive Landlord" by the hundreds of people attending Tuesday's gathering of housing advocacy groups.Eleven other landlords from neighborhoods from the Bronx to Manhattan's Lower East Side were cited for what the participants said were strong-arm harassment tactics used in trying to clear tenants out.More than half the tenants of 188 South 3rd have already moved out, and their one-bedroom apartments are being renovated and combined into two- and three-bedroom units, the residents said.Reached by phone, Mermelstein said he was not making any effort to get the rent-stabilized tenants out. He said he had only bought the building four months ago, and that constant repairs were being made to all the apartments.TreeTop Development's website was advertising 188 South 3rd as a "gut-renovation upscale rental."Market-rate rent in the area could reach upwards of $2,000 a month for renovated units. Many of the current tenants are paying less than $700."Harassment of tenants has become one of the dominant business models in New York City," said Benjamin Dulchin, of the Association of Neighborhood and Housing Development, which sponsored Tuesday's event. "Landlords buy buildings where tenants are paying low rent, and then expect to be able to push out those tenants."Dulchin said the solution was a City Council bill that would criminalize the harassment of rent-stabilized tenants.One common harassment tactic, Dulchin said, is to bring a large number of frivolous lawsuits against tenants, who often can't afford a lawyer or speak English well enough to understand the accusations.

Convention to Select New York's Most Abusive Landlord

2007-01-22T09:42:00.000-05:00

Are You Being HARASSED By Your Landlord?
Come to a
Convention to Select
New York’s
Most Abusive
Landlord
Tenants from neighborhoods across New York will nominate landlords who are using illegal methods to push tenants out, then vote to chose New York’s Most Abusive Landlord.
This event will bring attention to the crisis of harassment, and support new legislation in the City Council that will give tenants a new tool to fight back.
DATE: Tuesday, January 23rd, 2007
TIME: 11:00 AM – 1:00 PM
PLACE: Judson Memorial Church
55 Washington Square South
Manhattan
(between Thompson and Sullivan Street, three blocks from West 4t Street stop of A,B,C,D,E,F,V subway)

For More Information, contact: Association for Neighborhood and Housing Development, 212-747-1117, www.anhd.org

AG Settlement with Pinnacle Group for Rent Overcharges

2006-12-21T13:49:00.000-05:00

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

2006-11-24T13:56:00.000-05:00

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

2006-10-17T00:19:00.000-04:00

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

2006-09-12T22:00:00.000-04:00

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

2006-09-12T21:55:00.000-04:00

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