Friday, April 19, 2019

Forest Hills tenants get a million dollars worth of rent restitutions following class action lawsuit 

The mammoth private equity firm that bought a rent-stabilized Queens housing complex last year has agreed to pay $1.1 million in refunds to tenants after it found they were entitled to rent reductions, the Housing Rights Initiative revealed Friday.

The Blackstone Group, which acquired the 1,327-unit Parker Towers in Forest Hills last November, conceded that 110 units there should have been getting reductions, according to the non-profit housing watchdog, which is embroiled in a lawsuit with the Manhattan-based, multinational company.

The Housing Rights Initiative, being represented by the Newman Ferrara law firm, said the average rent reduction will come out to $230 a month.

It filed a class-action lawsuit over rent stabilization practices against the complex’s former owner, the Jack Parker Corporation, alleging the company illegally deregulated apartments despite getting tax breaks under the J-51 exemption and abatement program, which requires owners maintain rent-stabilization.

When Blackstone took control of the property, it assumed responsibility. Blackstone did not immediately respond to a request for comment.

The Housing Rights Initiative lauded the victory Friday, but said more needs to be done to rectify the situation.

“The goal here is not to get back some of what was stolen, but to get back all of what was stolen,” said Aaron Carr, executive director of the non-profit HRI, which did the research leading to the lawsuit. “Stay tuned.”

Congratulations to the tenants of Parker Towers and great job by HRI and the persistent Aaron Carr. And even to Blackstone, as is wont of these equity firms to continue frivolous and tormenting court battles to squeeze every penny and crush every soul trying to hold on to their residences, that saw the criminal machinations of the last company and paid up. Very rare good news regarding the housing crisis still festering in the five boroughs.

Thursday, April 18, 2019

Mayor de Blasio illegally solicited developer donor money by himself for Campaign For One New York fund against advisement from aides

The City

Mayor Bill de Blasio violated conflict of interest rules after being warned repeatedly not to solicit donations from individuals actively seeking tax breaks, deed transfers and other favors from his administration, according to a Department of Investigation report obtained by THE CITY.

The finding followed a two-and-a-half year DOI probe that ended in October but was never made public. THE CITY secured the 15-page “closing memo” — which the DOI heavily censored — via the Freedom of Information Law.

During the probe, DOI investigators questioned de Blasio about warnings by both the city Conflict of Interest Board (COIB) and his own counsel. The mayor claimed he wasn’t aware of such warnings – and said he couldn’t recall any details of conversations he had with several developers who recounted his personal requests for checks.

The report reveals DOI substantiated the allegation that de Blasio sought checks for the now-defunct Campaign for One New York fund from individuals “who had or whose organization had a matter pending or about to be pending before any executive branch of the city.”

The nonprofit formed as de Blasio arrived at City Hall in 2014 and hired consultants to press for support for his pet programs, such as universal Pre-K and affordable housing.

The closing memo was heavily censored by DOI, which cited protecting the privacy of witnesses and not wanting to reveal unsubstantiated allegations. The entire section marked “Conclusion and Recommendations” was blacked out.

The revelation of the DOI conflict-of-interest finding comes as de Blasio toys with a run for the White House. The mayor told WNYC’s Brian Lehrer last week he has “not ruled it out,” and his advisors have made clear he intends to make up his mind soon.

The mayor’s office, which has had the DOI report since Friday morning, did not respond to detailed questions submitted by THE CITY Wednesday morning.

Instead, a spokesperson released a brief statement: “These questions are asked and answered. Fundraising for the now-defunct Campaign for One New York was thoroughly reviewed by multiple parties and it was determined there was no wrongdoing. It’s been said a million times: the Mayor acted lawfully and ethically.”

In its report, DOI questioned the competence of de Blasio’s system for vetting possible donors for conflicts, stating “how the system was overseen remained unclear, as did whether the vetting research was conducted thoroughly and completely.”

The report noted that “there does not appear to have been any particular individual who exercised supervision over the vetting process.” And it revealed aides couldn’t agree on who was supposed to be doing the vetting to avoid conflicts.

De Blasio, for example, told DOI his then-general counsel, Maya Wiley, and another aide “owned” the vetting process. But Wiley told DOI investigators she had “no significant involvement” in that process after issuing an April 2014 memo spelling out specific areas of conflict that would constitute a violation of city ethics rules.

Another unnamed aide told DOI that a colleague was responsible for vetting potential donors – but that colleague then “denied any significant role in the vetting process.” That aide “did not know who was responsible for overseeing the vetting process.”

The DOI inquiry began April 13, 2016, shortly after de Blasio shut down Campaign for One New York.

Investigators interviewed dozens of witnesses, including the mayor, multiple donors, attorneys and lobbyists who helped raise funds for Campaign for One New York, and public relations and political consultants hired by the mayor’s group: SKDK Knickerbocker, AKPD Message & Media, Berlin Rosen and Hilltop Public Solutions.

The investigation wasn’t formally closed until Oct. 22, 2018. Four weeks later, de Blasio fired DOI Commissioner Mark Peters

 Then there's this:

 Despite the agency’s censorship efforts, the report obtained by THE CITY provides the most extensive portrayal yet of de Blasio’s fundraising tactics as he sought out five- and six-figure checks for the Campaign for One New York.

The mayor set aside weekly “call times” in which he “walked around the block as he called potential donors on his cell phone.” By the summer of 2015, he was making six to 10 such calls each week. Aides would instruct him on which donors he could request money from. With some he’d simply seek “support,” and an aide would follow up soon after with a specific money request.

That visual I highlighted reminded me of the video where that homeless woman caught the Blaz doing his yoga exercises at the Park Slope Y where he daily wastes 4 hours of civic service time commuting with a police escort to and then to the City Hall. 

In a post I wrote on Impunity City, I thought the most interesting thing about that confrontation was not only that Ms. Adegusun brought up the fact that he broke his promise to house homeless people but that she caught him while he was holding a Blackberry. 

While she was politely trying to get through to him, he told her he was working out and it wasn't the time and place to discuss this issue. Even though he had enough time to text as she was speaking to him.

 For an exercise that takes concentration and discipline, why is he with diddling with his Blackberry and texting people. This gives the impression that he was still soliciting donors and doling favors.

As we all know now, he got up and speedwalked away.

No wonder he wears sneakers while doing yoga.

Wednesday, April 17, 2019

Foreclosure stats remain the highest in Southeast Queens

Queens Chronicle

More than a decade after the mortgage bubble burst in the United States, Queens continues to be ground zero for foreclosures in the city.

In its latest report, PropertyShark, a website that chronicles residential and commercial real estate in major U.S. markets, said the borough’s numbers were up for the first quarter of 2019.

The report, written by Robert Demeter, states that first-time foreclosures in the city totaled 870 from Jan. 1 through the end of March, a decrease of five percent over the first three months of 2018.

But in Queens, the borough had 315 new foreclosures to begin 2019, a 4-percent increase over the 303 in the first quarter of 2018, and a 25 percent hike from the 252 registered in the final quarter of 2018, which includes October, November and December.

“The 11434 zip code encompassing Jamaica, South Jamaica, Rochdale and St. Albans neighborhoods had the most foreclosures in the borough: 28,” according to the report.

MTA arranges one-year plan to rearrange bus routes in Queens


 Queens' sprawling bus network will get a massive overhaul.

The MTA on Monday announced a yearlong project to redesign the network of 107 bus lines that move more than 714,000 weekday riders throughout Queens.

The transit authority will work with the NYC Department of Transportation to alter redundant or indirect bus routes and change the spacing between bus stops, according to a presentation shown to the Queens Borough Cabinet on Monday.

The MTA will also collect public feedback on Queens' current bus service and ideas for changes they'd like to see through an online form and a series of open houses, which kick off in May.
The agency aims to finish a draft of the redesign in November 2019 and release the final plan in April 2020.

 "The Queens bus network has not substantially changed in decades and the people of Queens deserve better. I'm immensely proud to begin the process of bus network modernization in the city's largest borough," New York City Transit President Andy Byford said. "Bus network modernization is absolutely critical to the continued success of Queens and I look forward to being a part of it."

Tuesday, April 16, 2019

After three men got killed on construction sites in the last week, City Council reacts by fast tracking new saftey bill.

Crain's New York

Following a week in which three construction workers died in separate workplace accidents, a city councilman is renewing a push for the implementation of a construction safety training law passed in 2017.

City officials put out a statement Saturday that Gregory Echevarria, 34, died around 3 a.m. after being crushed by part of a crane he was helping assemble at a construction site at 570 Broome Street, in SoHo, as reported in the Daily News.

Brooklyn Councilman Robert E. Cornegy Jr. later that day released a statement calling Echevarria's death a "reminder of the importance of implementing the construction site safety training mandates of Local Law 196 of 2017, which will be a vitally important way to prevent future fatalities like these."

Cornegy called the string of construction deaths in the past week a "chilling reminder of the danger the men and women who build our city are subjected to day in and day out." Before the SoHo accident, a window washer was killed by a falling piece of stone last Monday in Midtown, and a construction worker fell to his death on Wednesday while placing bricks on a work site in Brooklyn Heights.

The private construction industry was responsible for the largest number of workplace fatalities in the city in 2017, according to a January report from the federal Bureau of Labor Statistics. There were 20 fatal injuries on private construction sites, representing about a quarter of the city's workplace deaths. There were 21 construction worker deaths in 2016. Construction-related injuries on job sites in the city have increased from 526 in 2016 to 744 in 2018, according to the 2019 mayor's management report.

Ridgewood citizens assemble protest against recidivist slumlord

Dozens of Ridgewood renters marched through their neighborhood Saturday to denounce a property owner routinely featured on the New York City public advocate’s annual Worst Landlord List. Their chants of “Fight Fight Fight, Housing is Right” prompted nods from passersby, supportive honks from an FDNY fire truck driving along Myrtle Avenue and words of encouragement from local elected officials.

The Ridgewood Tenants Union’s demonstration against Silvershore Properties attracted renters from Ridgewood and neighboring Bushwick who said they have been harassed by landlords who go to extreme measures to evict or wear down their tenants in order to jack up rents, especially in rent-stabilized apartments.

Silvershore’s former owner, Jonathan Cohen, was named the city’s worst landlord in 2017 by former Public Advocate Letitia James. The company owns nearly 100 buildings and continues the conduct that Cohen instituted, tenants say.

Gloria Nieves, a tenant leader at 1708 Summerfield St., described how Silvershore neglected tenants who went without heat or hot water and had to perform their own building maintenance.

“The people who run Silvershore Properties will say that they are good people and that we are the bad guys but to leave an entire building without any heat and oftentimes hot water during some of the coldest days of winter is not something a good person does,” Nieves said. “They have made our lives impossible and that is why we need landlords like them and all the other landlords in our neighborhood to understand that they cannot take advantage of us in this way.”

The demonstration began in front of 61-20 Madison Ave., a Silvershore Properties building, before community members marched down Fresh Pond Road and Myrtle Avenue, the neighborhood’s two bustling commercial strips. The event ended in front of 1708 Summerfield St., where at least one senior tenant watched from her apartment before heading outside to join the rally.

Several tenants told the Eagle about the bad experiences they have had with landlords — abusive companies with large property portfolios as well as opportunistic single building owners — who tried to drive long-term tenants out of their buildings.

Eugenio Vasquez said the owner of his Bushwick apartment building sold the property to a new landlord who immediately raised rent and took him to housing court to try to evict him.
Ahtziri Campos, a 15-year-old volunteer organizer, said her landlord has tried to drive her immigrant family out of the building for five years so that he can raise the rent and attract wealthier tenants amid Ridgewood’s gentrification.

“He only bothered us,” Campos said. “We are the minority in the building and he made us afraid of getting displaced.”  

Sunday, April 14, 2019

Borough President candidate Crowley proposes resuscitation of LIRR passenger train line


A little-used stretch of train tracks in Queens could be the key to filling transit deserts in the borough, community leaders say.

The Long Island Railroad’s Lower Montauk branch, which runs 8.5 miles between Long Island City and Jamaica, could be used to bring new passenger rail service to communities like Maspeth and Glendale, which do not have subway stops.

The LIRR ran commuter trains along the line until 1998, when the Metropolitan Transportation Authority closed its stops due in part to low ridership. Now, the tracks service freight trains and are used as an extra storage space for Sunnyside Yard.

The chief advocate of the project, dubbed the QNS, is former Councilwoman Elizabeth Crowley (D-Queens). She commissioned an independent feasibility study in 2017, which was completed shortly after she left office in early 2018.

Crowley has recently renewed her push for the line — she hosted an event Friday to begin assembling a non-profit to stump for the project.

 Her proposal would bring nine stops to the stretch, and would cost an estimated $2.2 billion to pull off. The 2018 study projects that it would serve roughly 21,000 weekday riders.

Community leaders and advocates of the project disagree with that assessment, noting that the areas it will serve expect to boom in the coming years.

“Look at the growth in Long Island City and the growth in the Jamaica downtown area and at JFK Airport,” said longtime transportation consultant Philippa Karteron, an advocate of the project. “If we could put something like this together, the corridor could be an economic development corridor, bringing in businesses, bringing in jobs.”

Unlike the BQX, another Queens-oriented transit project, Crowley’s idea isn’t supported by real estate developers — she says she’s working to form a grassroots campaign that has community boards involved from the get-go.

This actually isn't a bad idea considering the severe and desperate need for transit in this overcrowded and overburdened city but that rendering of Hillside Ave. in Richmond Hill is a hysterically inaccurate depiction of the citizenry in that area. And very racist in it's prescience of what the designers think it will look like if the station is built there.

Saturday, April 13, 2019

Hudson Yards was made possible with pilfered EB-5 funding that was meant for public housing developments through enabled cirvumvention and crooked gerrymandering

City Lab

Since its official unveiling last month, critics have been teeing off on Hudson Yards, the $25 billion office-and-apartment megaproject on Manhattan’s West Side. The Guardian’s Oliver Wainwright calls it “bargain-basement building-by-the-yard stuff that would feel more at home in the second-tier city of a developing economy.” In Curbed, Alexandra Lange writes that it suffers from “no contrast. No weirdness, no wildness, nothing off book.” The New York Times’ Michael Kimmelman describes it as a “vast neoliberal Zion.”

“New York politics and real estate are notoriously akin to Rashomon,” reads Kimmelman’s review. 

“Any verdict on an undertaking as costly and complex as Hudson Yards depends on one’s perspective.”

Views abound, sure, but so far, nobody seems to like what they see when they look at Hudson Yards. 

The project has managed to do something unique: unite all New Yorkers in a vernal equinox of acid contempt. Early reviews offer a litany of contrasts, with the development’s garish geometry and dull placelessness earning rebuke in equal measure. That’s before considering how certain features, particularly Thomas Heatherwick’s oft-derided shawarma-shaped bucket, square with other projects as “bellwethers pointing to exactly where our cities are going awry.”

However, among all the many reasons to feel salty about Hudson Yards, one perspective may deserve a place of privilege: the view from Harlem. Without their knowledge, the residents of a number of public housing developments helped to make Hudson Yards possible. The mega-luxury of this mini-Dubai was financed in part through a program that was supposed to help alleviate urban poverty. Hudson Yards ate Harlem’s lunch.

Specifically, the project raised at least $1.2 billion of its financing through a controversial investor visa program known as EB-5. This program enables immigrants to secure visas in exchange for real estate investments. Foreigners who pump between $500,000 and $1 million into U.S. real estate projects can purchase visas for their families, making it a favorite for wealthy families abroad, namely in China. EB-5 is supposed to be a way to jumpstart investment in remote rural areas, or distressed urban ones.

Hudson Yards, of course, is nobody’s idea of distressed. Located at the source of New York’s High Line, it’s the most expensive real-estate project in U.S. history. It could not possibly qualify as distressed under the terms of the program, or any understanding of the word. In order to buy EB-5 visas at the lower rate ($500,000), immigrant investors must put their money behind projects in areas with high unemployment—a proxy for need.

 Manhattan’s West Side may not suffer for lack of opportunity, but, as Kimmelman notes, New York real estate is a realm for Kurosawa-esque visionaries. The Related Companies, the developer behind Hudson Yards, raked in at least $1.2 billion in EB-5 funds for this project. To qualify, Related needed a work-around to bypass the distressed-area requirements—a pass that New York authorities were happy to issue.

Here’s how these requirement works: EB-5 visa applicants must invest a minimum of $500,000 in a project within a designated geographic area called a targeted employment area, or TEA. To be eligible for this financing, a project needs to qualify as falling within a TEA—which is going to be either a rural area or a distressed urban area. For an urban area to count as a TEA, it has to meet a certain unemployment threshold (150 percent of national unemployment).

 Lower Manhattan doesn’t meet this unemployment threshold, so Hudson Yards, on its own, can’t qualify as a distressed urban area. However, when Congress created the EB-5 visa as a part of immigration reform legislation in 1990, lawmakers did not specify how states should draw up the geographic boundaries for a TEA.

New York takes a rather liberal approach to drawing these lines. Empire State Development, the economic development agency for the New York state government, determines the boundaries for qualifying TEAs. Under state law, the agency has the authority to string together an unlimited number of census tracts in order to achieve the desired aggregate unemployment standard. Think of it as a form of creative financial gerrymandering.  

As I reported back in 2017, records obtained by CityLab under the Freedom of Information Act reveal the gerrymandered map that Empire State used to qualify Hudson Yards for EB-5 financing. This particular TEA snakes up from the West Side and includes Central Park. (Think about that: a map of Manhattan that claims Central Park as an economically troubled area.) Beyond the park, the qualifying zone for Hudson Yards captures several census tracts in Harlem, where public housing projects boost the overall unemployment figure.   

 These funds might have financed alternative developments in Harlem directly. Other developers have successfully raised EB-5 funds for projects in actually distressed areas of New York. For example, Asian Americans for Equality, a nonprofit organization, once pursued EB-5 funding to finance a food hub and university project in northeast Kansas City, a grocery store destroyed by Hurricane Sandy in the Far Rockaways, and an affordable housing complex in Queens’ Flushing neighborhood.  

Instead, Related sopped up hundreds of millions in funds never intended to finance luxury projects. 

The developer has successfully leveraged Harlem unemployment to raise more in EB-5 financing than any other developer in the nation. Related recently sought a third tranche of EB-5 funds for Hudson Yards, targeting $380 million—bringing the total as high as $1.6 billion, according to New York University’s Stern Center for Real Estate Finance Research.

City wireless network went haywire and was inoperable for a week
NY Post

City Hall’ s tech czar ignored a federal warning about a looming, Y2K-like software bug last year — allowing a crash of the city’s official wireless network that has been down since the weekend, sources told The Post.

As a result, transit officials can’t remotely control the Big Apple’s 12,000-plus traffic lights, and many of the city’s traffic cameras and NYPD license-plate readers are down, sources said.

“This is a big screw-up, even for the de Blasio administration,” said a source familiar with the matter.

The New York City Wireless Network, known as “NYCWiN,” crashed on Saturday, affecting the operations of city agencies that rely on it to transmit high-speed voice, video and data communications.

Workers have been scrambling around the clock to fix the entirely preventable problem, but the network remained down Wednesday — five days into the outage.

NYCWiN is overseen by the Department of Information Technology and Telecommunications, whose commissioner, Samir Saini, was appointed by Mayor de Blasio in January 2018.

DoITT pays the Northrop Grumman Corp. about $40 million a year to run the network, which cost $500 million to build and went into service citywide in 2009.

It was unclear when it would be back up and running. But what is reasonably certain is that the technology snafu could have been prevented.

Exactly one year ago Wednesday, the Department of Homeland Security issued a warning that GPS-enabled devices could be affected by a time counter “rollover event” set to occur this past Saturday.
DHS noted that testing showed some devices could not “correctly handle” the rollover and urged “federal, state, local, and private sector organizations” to take preventive measures.

Sources said the biggest impact has been on the Department of Transportation, which lost its digital connection to the traffic lights at intersections across the city — leaving officials unable to know if a signal stops working unless someone reports it.

In addition, the clocks that time the lights are subject to going out of sync, which could wreck the carefully timed patterns that keep traffic flowing, sources said.

“I don’t know how the city could become more congested, but that would be a concern,” one law enforcement source said.

 This doesn't bode well for the coming congestion pricing tolling system the city is going to implement next year.

Tuesday, April 9, 2019

Landlords continue to inflate rents based on dubious reconstruction costs and city loopholes

Crain's New York

In the fall of 2013, when apartment 1E at 171 W. 81st St. was vacated, the owner did what landlords have done with tens of thousands of other rent-regulated units in the city. Stellar Management claimed it had spent a bundle on renovations, which—combined with the 20% rent increase permitted when a tenant leaves—allowed it to push the $647 regulated monthly rent above $2,500—to the threshold at the time to make it a market-rate unit. A few months later Stellar rented the Upper West Side pad to massage therapist Jonathan Saballos for $3,300 a month.

It seemed like a routine example of the steady exodus of such units from the city's pool of about 900,000 rent-regulated apartments. Except that in January, after Saballos lost his roommate and then his job and was taken to housing court by Stellar for failing to pay rent, a judge ruled that apartment 1E shouldn't have been deregulated at all.

In the written ruling, Judge Sabrina Kraus of Manhattan Civil Court determined that Stellar had inflated its renovation costs of more than $71,600 by almost $45,000—including $3,500 for a bathtub that was never installed—and had overcharged Saballos at least $41,193. The judge ordered the owner of the 20-unit building to pay triple damages—$123,578—and place the apartment back into regulation with a monthly rent of $1,524.

Housing advocates say such episodes are common in a system where loopholes and lax oversight practically invite owners to pull units out of regulation. A review of several lawsuits against Stellar reveals how expensive or dubious renovations enabled the owner to convert rents to market-rate.

"The city or the state doesn't even know how many illegally deregulated apartments are out there, because they're only really examined when cases like this come up in court," said Mark Hess, an attorney who represented Saballos in the eviction proceeding. "Stellar thought it was going to be business as usual and they were going to throw my client out of his apartment. Instead we called them out."

Stellar is appealing and will not comment on ongoing litigation, said a spokeswoman for the company, which owns roughly 100 buildings, most of which are in the city.

Allegations of abuses by landlords are not new. In one high-profile case last year, the Associated Press reported, the family business of White House adviser Jared Kushner failed to disclose rent-regulated units in buildings it owned, then began disruptive renovations that some of those tenants saw as an effort to push them out. Kushner Cos. blamed a third-party document preparer for the erroneous filing and said its renovations were proper, but the episode led to a fine, a lawsuit by tenants and City Council legislation to deter harassment by construction.

Less focus, however, has been given to the method used in Saballos' case, which may have allowed landlords to improperly deregulate tens of thousands of city apartments—and even more of them legally.