Tuesday, August 18, 2009

Foreclosure trouble brewing in the Bronx

From Crain's:

Linda Kemp remembers when the hallway floors at Robert Fulton Terrace were waxed regularly, when tulips, not weeds, bloomed in the garden, and when mold wasn't growing in the bathrooms of apartments in the 18-story complex that once was the envy of the Morrisania section of the Bronx. “We were always considered the Building on the Hill,” says the 51-year-old president of the tenant council, who has lived in Robert Fulton since she was 8. “It was a place to live with pride.”

That was before April 2007, when New York real estate investor Mark Karasick spent $44 million to acquire the building and its sister property two miles north, Fordham Towers. Tenant leaders suspected that Mr. Karasick, whose deals are often seeded by San Francisco-based private equity vehicle SFF Realty Fund, had grossly overpaid for his prize and that income from the two buildings' 490 rent-regulated units would not come close to covering expenses.

Canada-based bank CIBC lent Mr. Karasick $36.5 million for the deal in 2007 and recently insisted the purchase price was “well justified,” even though a securities filing shows the mortgage approval was based on a monthly operating cost of $301 per unit, less than half of what the former owners spent. In a letter to Bronx Rep. Jose Serrano last October, the bank's general counsel called tenant concerns “unwarranted.” But cuts in service—maintenance staff was slashed from nine to three—had immediately followed the sale. Then, this past May, the tenants' prediction came true: Robert Fulton and Fordham Towers fell into foreclosure.

Now, hundreds of other rent-regulated buildings in New York City purchased at the height of the real estate boom may end up in similar distress. Optimistic underwriting enabled investors, often backed by private equity, to snap up rental buildings at bloated prices in highly leveraged deals. In many cases, the new landlords had unrealistic expectations for raising rents, and now some 70,000 units are in jeopardy. That's left government officials seeking ways to stem what some are calling the greatest threat to the city's neighborhoods since the widespread landlord abandonments of the '70s.

13 comments:

ceiling on my head lady said...

Basic economics: Everyone cannot live in "luxury" apartments anymore than you can live in a town where all the children are above average.

Or how about this blast from the past:

The poor will always be with us

Anonymous said...

Basic economics: Everyone cannot live in "luxury" apartments anymore than you can live in a town where all the children are above average.

Or how about this blast from the past:

The poor will always be with us

----

A Gianaris supporter.

How about this?

Astoria was once a nice working class community, now its being bled dry by its politicans who are buidling resumes.

Cant for the life of me think of a single useful thing that boy has done since he has been in office.

(no posing at senior homes and with a shovel in hand at the latest HANAC outrage doesn't count)

ceiling on my head lady said...

As to Gianaris, I speak from personal experience and gratitude for help at a time of personal crisis. I lay no claim to deep political knowledge.

Possibly he is the best of a bad lot. Certainly, I never thought it would be acceptable to have serving senators on trial for criminal offenses such as assault.

It is also obviously that the local leadership of Astoria has been deficient although I am not sophisticated enough to be sure who is most responsible.

Anonymous said...

ceiling on my head lady said...
As to Gianaris, I speak from personal experience and gratitude for help at a time of personal crisis. I lay no claim to deep political knowledge.
---

I trust you are not talking about the time you felt powerless when they sent you a bill in error and ran to him --- there is a customer service hot line on the bill and you know what, its useful.
--

Possibly he is the best of a bad lot. Certainly, I never thought it would be acceptable to have serving senators on trial for criminal offenses such as assault.

---

How about serving senators that the the local blog has all but accused is homophobic and anyone with any sense could see has a lot of 'issues?'
---

It is also obviously that the local leadership of Astoria has been deficient although I am not sophisticated enough to be sure who is most responsible.
--

Secret: its you that is responsible.

Go ahead ask him about the issues raised on the Con Ed thread from a few days ago and let us know his answers.

Anonymous said...

So far as Con Ed goes, his office got Con Ed to leave me alone when they tried to stick me for a several hundred dollar bill covering a time when I had no gas hook-up whatsoever.

I also had a Con Edison worker justify his company's attempting to defraud my neighbor of $9000 in false charges covering a time when he had no gas for either cooking or heating.

I have seen the direct result of Con Edison's arrogant attitudes. While I have respect for people who work with 220 volts of live electricity for a living, I also know about the vaults full of toxic chemicals stored under the park where the children play not far from Polletti #5.

I have also seen Con Edison workers take no steps to protect local residents from PCB laced transformer oils when transformers in Astoria blow.

Apparently they can't imagine that a simple clerk might have basic knowledge of electricity from High School Physics classes. They will tell you anything and expect you to believe it.

Anonymous said...

These are urban myths spread by the politicans, so just stop it.

All you need to do is call Con Ed if you have a problem with your bill - they are regulated by the public service commission.

Remember, Con Ed workers live in Astoria too.

(PS If you have a problem with Con Ed, you can call a local pol who will go apeshit.

If you have a problem with a developer you can call a local pol who will say its as of right.

If you have a poblem with a local pol who does shit there is nothing you can do about it.)

Anonymous said...

They are not urban myths because they happened to me and my neighbor. Right now a very expensive lawyer is working on his behalf to sort out this problem, so keep your baseless speculations to yourself.

A Matter of Perspective said...

Con Ed 'bad dog' on bill: one customer in Astoria

Politicans that cannot handle development and overburden everthing from transit to sanitation to schools to hospitals to power grid: 250,000 customers in Astoria.

Anonymous said...

I had a $300 bill from Con Ed once. Called them and a guy came out and said my meter was fine.

Called a friend in construction out: found the developer that bought my building tapped into my line.

Cut the connection. Billed dropped. No problem.

The Silver Fox said...

(PS If you have a problem with Con Ed, you can call a local pol who will go apeshit.

If you have a problem with a developer you can call a local pol who will say its as of right.

If you have a poblem with a local pol who does shit there is nothing you can do about it.)


JUST WAIT TILL THE CLUBHOUSE TAKES OVER CON ED. WE WILL HAVE FINE SERVICE, JUST LIKE SCHOOLS AND HOSPITALS.

ceiling on my head lady said...

Unfortunately we already have this fine level of service from both. And I agree with matter of perspective that one freakishly large bill is not on the same level as the collapse of the entire power grid.

I just feel that an attitude of aggressive lack of concern for the consequences of their actions and decisions have infested both Con Ed and many of our representatives.

I stuck up for Gianaris after he helped me and my neighbors when so many people did not. I am sure he has problems like all of us do, but personal experience means more to me than all the fancy ads.

Anonymous said...

They are not urban myths because they happened to me and my neighbor. Right now a very expensive lawyer is working on his behalf to sort out this problem, so keep your baseless speculations to yourself.




Valone and Valone?

Considering the leadership in Astoria only cares when you are a good backdrop for an oversized front page picture in the Gazette, or if you follow a script they hand you, I am curious:

Does this 'expensive' lawyer have clubhouse connections?

ceiling on my head lady said...

He should have a machete for cutting through all the nonsense. Believe me, unless you have been through it, you have no idea what is going on.

Right now, people across the city, not only Queens are being buried under falling rubble, having their homes destroyed by careless construction next door and sitting next to homes that have been constructed with illegal gas lines, weak floors, weak ceilings, just the things to bring the building down and all buildings next to it.

And when you tell people what is going on they say, "urban myth" or they shake their heads and helpfully suggest you call 311. Remember, I've called 311, 411, 911, 711 24-7 and still nearly been killed. Corruption, thy name is New York