Burdensome liens on homeowners and landlords get heavier thanks to empty promises and zero plans from officials

THE CITY 

New York City’s controversial tax lien sales system for collecting unpaid property and water debts expires at the end of next month — without any clear path toward what comes next.

Mayor Eric Adams and City Council Speaker Adrienne Adams have both come out against the longtime practice of selling off tax liens to investors, which generates tens of millions of dollars each year and steps up pressure on property owners to pay their bills.

The city sold the liens from 2,841 properties in December 2021. It was the first sale since May 2019, after postponing the 2020 sale because of the pandemic.

The mayor campaigned on ending the sales, declaring they threaten “generational wealth in Black and Brown communities.”

But neither Adams nor Adams has unveiled specific plans.

Advocates for small property owners are pushing for significant reforms for how the city collects the unpaid debts, and they’re hopeful new city leaders will come up with a way that doesn’t further burden those already stretched thin financially.

And some grassroots activists want to get rid of the lien sale in favor of a community land trust model, in which nonprofits would take ownership of the property and maintain income-restricted units, in consultation with the indebted previous owners.

“There’s this opportunity to create the replacement system with the Council and with the mayor, and that’s an exciting prospect,” said Hannah Anousheh, a coordinator for the East New York Community Land Trust, which was created at the start of the pandemic.

Through the lien sale, which Mayor Rudy Giuliani created in 1996, the city sells debts of property tax and other municipal charges to a trust of investors at a discount. It was conceived as a way to address property abandonment and to collect unpaid taxes after City Hall had struggled for years with both.

Today, tax lien sales are a revenue-raiser for the city, with private investors responsible for collecting the debt. The liens sold this past December are valued at $145 million, according to the city Department of Finance.

Often, property owners late on their bills must pay more fees and interest on top of what they already owe, sending them further into debt, and sometimes resulting in foreclosures if debts remain outstanding.

The lien sale disproportionately impacts homeowners of color, a report from homeownership advocacy group Coalition for Affordable Homes found, as well as smaller property owners, and can lead to negative effects on tenants, too.

Landlord groups have been pressing for an end to lien sales.

30 Days Over Vacant Lots

 

 Commercial Observer

 A New York City Council member is trying to give the city a heads-up on vacant building sales.

Councilman Ben Kallos plans to introduce legislation on Thursday that would require real estate brokers, realtors and listing agents to notify the city 30 days before a vacant property — including empty lots and unoccupied buildings — of 20,000 square feet or more goes up for sale, Commercial Observer has learned.

Kallos said the bill will bring the city in the loop on transactions, giving it the first right of refusal on vacant properties to allow it to build more schools, firehouses and other municipal buildings. 

“In my district, which is the Upper East Side, we have three gigantic vacant spaces,” Kallos told CO. “I’m trying to build more pre-K sites, and more schools [and] firehouses … It’s clear to me that it is a bad thing that real estate isn’t getting into the hands of the government [and] public-private partnerships aren’t happening frequently.”

The city would be required, under the new legislation, to express interest in acquiring the property or say why it’s not interested within a 30-day timetable. If an owner rejects the city’s offer, the city would also be required to disclose why it didn’t use eminent domain — when a government takes private property for public use and compensates the owner — or the Uniform Land Use Review Procedure to acquire the property, according to the a copy of the bill shared with CO.

 

Hyper-development swticheroo for Long Island City abandoned warehouse property

This is from last year:

 City Realty

 And this is from this week:

Commercial Observer 

So it went from a multifamily residential project to a purely commercial one? Quite a switch.

No "affordable housing". Not even 20%?

Two acres of tweeding at Willets Point

From Willets Point United:

A new video released by Willets Point United demands that the de Blasio administration act before a December 2018 contractual deadline, to protect taxpayers’ interests by reclaiming two acres of Willets Point property which the Bloomberg administration gave to Queens Development Group.

In the video (below), Willets Point property owner Irene Prestigiacomo explains the give-away of the two acres to Queens Development Group; the comprehensive development project which the property was supposed to facilitate; the court decision that effectively prevents that project from proceeding; the contractual provision that allows the City to take back the property under present circumstances; the lack of action by the de Blasio administration thus far to reclaim the property; and City officials’ fiduciary responsibility to taxpayers to do so before the deadline lapses.

Ms. Prestigiacomo asks (06:38): "As corrupt as this City sometimes can be, have we really reached the point where a developer can keep public property worth tens of millions, without delivering any of the project that was the basis for it to receive the property in the first place?"

De Blasio goes full socialist in NY Mag interview

From NY Magazine:

In 2013, you ran on reducing income inequality. Where has it been hardest to make progress? Wages, housing, schools?

What’s been hardest is the way our legal system is structured to favor private property. I think people all over this city, of every background, would like to have the city government be able to determine which building goes where, how high it will be, who gets to live in it, what the rent will be. I think there’s a socialistic impulse, which I hear every day, in every kind of community, that they would like things to be planned in accordance to their needs. And I would, too. Unfortunately, what stands in the way of that is hundreds of years of history that have elevated property rights and wealth to the point that that’s the reality that calls the tune on a lot of development.

I’ll give you an example. I was down one day on Varick Street, somewhere close to Canal, and there was a big sign out front of a new condo saying, “Units start at $2 million.” And that just drives people stark raving mad in this city, because that kind of development is clearly not for everyday people. It’s almost like it’s being flaunted. Look, if I had my druthers, the city government would determine every single plot of land, how development would proceed. And there would be very stringent requirements around income levels and rents. That’s a world I’d love to see, and I think what we have, in this city at least, are people who would love to have the New Deal back, on one level. They’d love to have a very, very powerful government, including a federal government, involved in directly addressing their day-to-day reality.

Dirtbag gets jail for house theft

From the Daily News:

A Queens ex-con pleaded guilty on Friday to stealing an elderly woman's house out from under her.

Darrell Beatty, 51, pleaded guilty to criminal possession of a forged instrument for using a phony deed to swipe Jennifer Merin's Laurelton house out from under her.

As a result of the plea deal, he'll get even more free housing — it calls for him to get a year in jail.

Merin, 72, said that's not enough time.

"I'm glad he's going to jail. He deserves to go to jail but I think that the sentence was too brief," she told the Daily News after Beatty's plea. "He lived in my house for longer than he will be in jail and he'll be out on the streets again."

Deed fraud becoming more common

From the NY Times:

They wandered into New York City government offices this week, indignant at how the cogs of bureaucracy had slowed their grand plans of thievery.

Lasharan Amos, 42, arrived on Tuesday at the New York City sheriff’s office in Queens, wondering why the city was taking so long to give her ownership of a home that the authorities said in fact belonged to her mother.

Two days later, Jethro Chappelle Jr., a former convict who uses a wheelchair because of a gunshot wound, did the same. He took an elevator to the 13th-floor City Register’s office in Manhattan, demanding to know why the city had not yet recorded two deeds he had filed for abandoned properties in Harlem.

Ms. Amos and Mr. Chappelle were promptly arrested and charged with various counts of grand larceny, perjury and offering false statements to public officials. Their arrests were the first since June, when the Department of Finance, in coordination with the city sheriff’s office, began flagging irregularities in a deed transfer system that has long gone unguarded.

Working with corrupt notaries public, or sometimes simply by searching public records online, those inclined to have long been able to forge property deeds, claiming, for instance, to have taken ownership of a family member’s home or a building that had long been neglected. As long as the documents were properly formatted, officials had little choice but to record the deed transfer.

When there were gaps in required information or other problems with the forms, the documents were just returned to the filing parties with instructions about how to fix the flaws. Tricking the system was so easy that people like Mr. Chappelle, 51, who had been arrested on an attempted murder charge in 2003, and convicted of assault a year later, and Ms. Amos apparently were confident enough to announce themselves to city agencies.

Laughing all the way to the bank

From Crains:

Real estate scion and former governor Eliot Spitzer is selling a big portfolio of apartments his family owns on the East Side in a deal that could fetch $145 million or more.

Mr. Spitzer has put 144 rental units at the Corinthian, a huge apartment tower his father Bernard Spitzer began building in the mid 1980s and finished in 1987. Robert Knakal, chairman of the brokerage firm Massey Knakal Realty Services, is marketing the apartments and confirmed the units were on the market.

“The market for any type of property today, but especially residential assets, is spectacular,” Mr. Knakal said. “It’s a great time to take advantage of it.”

The 57-story building, at 330 E. 38th St., is one of Manhattan’s largest residential towers, with 863 units, and a distinct columnar facade that provides the apartments inside with curving bay windows that offer sweeping views of midtown. The Spitzers sold most of those apartments in the years immediately after they constructed the tower, but when the city’s sales market slowed by the late 1980s, they decided to hold on to 144 units and convert them to rental properties.

The family has held onto the apartments, which are scattered throughout the tower, ever since.

Having lost a tightly-fought bid for city comptroller last year and with his father in his 80s and in poor health, the deal is also a sign that the younger Spitzer has begun to take a more active hand in steering the family’s real estate business. In December, he acquired a prime development site in the Hudson Yards for $88 million.

The sale of the Corinthian apartments could be a way for Mr. Spitzer to raise capital for future acquisitions or help finance the purchases he has made.

A film that may interest you

A story about greed, politics and the land grab of the century, ZIPPER chronicles the battle over an American cultural icon. Small-time ride operator, Eddie Miranda, proudly operates a 38-year-old carnival contraption called the Zipper in the heart of Coney Island’s gritty amusement district. When his rented lot is snatched up by an opportunistic real estate mogul, Eddie and his ride become casualties of a power struggle between the developer and the City of New York over the future of the world-famous destination. Be it an affront to history or simply the path of progress, the spirit of Coney Island is at stake. In an increasingly corporate landscape, where authenticity is often sacrificed in the interest of economic growth, the Zipper may be just the beginning of what is lost.

Zipper website

It opens Friday, August 9th at IFC in Manhattan.

Housing price spikes and dips in Brooklyn

From the Daily News:

Brooklyn home prices soared in several sought-after neighborhoods, but plummeted or stayed flat in more than half of the borough’s communities in the past eight years, new stats show.

The data from real estate website PropertyShark.com reveal a tale of three deeply-divided Brooklyns.

The biggest price spikes came in hipsterville Williamsburg, genteel Prospect Lefferts Gardens and surprising up-and-comer Gowanus where home prices surged 52% to $668 per square foot.

Disappointing drops occurred in solid middle-class enclaves like Mill Basin and Canarsie.

The most dramatic fall-off came in crime-riddled Cypress Hills, where home prices dropped 30% since 2004 to an average $147 per square foot.

At Brooklyn’s other extreme Gowanus - even with its notoriously polluted canal - saw a 52% surge in home prices to $668 per square foot.

Yuppie worries about property values

From the Queens Courier:

Writing in the days after Sandy I simply could not avoid thinking how this event may affect real estate business for years to come. Although the condo building where I live was spared any damage (floor waters stopped 10 feet from our garage before they started to recede), the Murano on Borden Avenue was hit twice as hard — in addition to flood damage to their lobby, rec room, gym and garage, the city’s sewage lines back-flowed into their mechanical room, adding insult to injury (or smelly mess to water damage). Turns out Con Ed won’t work to restore your electricity until you make the area clean for them. They estimate from $100,000 to $250,000 in damages. Among the new buildings, the worst water damage occurred at the City Lights, Powerhouse and the Foundry buildings, where the flood waters reached as high as 5 feet above ground, including some private apartments. Amazingly, the piers and Gantry Park did not sustain too much damage, testament to how well they were designed and built. We cannot discount damages that businesses like Riverview and Crabhouse restaurants or Brighter Babies and LIC Kids facilities have sustained, not to mention all the small warehouses, offices and of course individual homes that got caught in Sandy’s surge, which reached as far east as half-way between 5th Street and Vernon Boulevard all the way up to Borden Avenue in the south, and 46th Drive and Vernon Boulevard in the north (where my own car was treated to 3 feet of water!)

It was refreshing to see resilient parents march their kids at the Halloween parade the day after the storm, and restaurants on Vernon packed with residents supporting local retailers as if they wanted to show how much they appreciated getting through it all relatively untouched. But overall damage a dozen of businesses in Hunters Point may actually put them close to the brink of closing doors, regardless of insurance coverage or defiant stance of its proprietors. In a small market like LIC, even a small hit, like low health department grade or destruction of locals’ favorite park next door can strain a retailer’s bottom line. Let’s hope that our local businesses recover quickly.

Instead of bold predictions, analysis or data, all of which would obviously be guesswork at best, I am leaving you with some questions to which no one yet has answers: Will values of real estate in LIC drop because we are clearly in the flood and hurricane zone? Or will they keep going up because we proved that properties here can withstand the worst kind of storm, and the neighborhood can recover quickly? Will prospective tenants, both commercial and residential, begin to look at Hunters Point the same way one would at Batter Park or Rockaways; basically a real waterfront community at mercy of the big river? How much new investment will property owners now want to make in both improving and reinforcing their buildings knowing that “this hurricane thing is now for real”? Will it affect prices? Is a condo in Court Square or even on Jackson Avenue now a safer living and investment than one closer to the ballyhooed waterfront?

Flushing Bank protest

The Flushing Phantom found something interesting in his travels recently at 161st Street and Northern Blvd.

This land is DOT's land

From the Times Ledger:

The city Department of Transportation owns a small grassy plot of land in College Point, but condo owners nearby have been footing the bill for its upkeep.

Representatives from Bay Park Estates said they have been paying for landscaping for the small green parcel of land, at the corner of Poppenhusen Avenue and 115th Street, since the 1980s because of a contract that has long expired, if it ever existed at all.

In 1986, the then-owner of the condo complex apparently entered into an agreement with the city. In exchange for a 15-year tax break, the owner would provide upkeep to the verdant parcel owned by the city.

That tax break expired, but the condo is still stuck with the cleaning bill, according to the realty firm that represents the condos.

DOT confirmed that it indeed owns the land, according to a spokesman.

Bay Park had long assumed it owned the grassy spot with choice views of the Manhattan skyline until earlier this year, when it wanted to double check with the city Parks Department on whether or not it could put in some new plantings, according to Paul Kupetsky, a condo owner who represents others in the enclave.

Kupetsky was surprised to learn that the mini-park area was actually mapped as a city street and thus under the purview of DOT.

DOT said it has been in contact with local stakeholders to set up a transfer of maintenance rights under which the condo could lease the land from the city.

But Kupetsky said he reached out to DOT and did not receive any offers to transfer ownership of the property.

Why there's no new owner of Scobee

From Little Neck Patch:

Bob Greenberg, a lawyer whose family owns the bulk of the diner's parking lot (which, yes, is owned separately from the building) said that though the property has generated a lot of interest, the prospect of purchasing the former Scobee building - in addition to paying rent on the parking lot - has thus far deterred fruitful negotiations.

Greenberg said that though he understands the desire of potential buyers to want to own the lot adjacent to the building, he and his family remain staunch in their unwillingness to part with it. For one, he said, selling the lot would go against the "philosophy" of property ownership that the Greenberg's embrace. Add the loss of income stream and burden of high taxes, and you have the reason they are uninterested in selling.

Though Greenberg acknowledges that many people are indeed discouraged by his family's refusal to sell the parking lot, he said the bigger issue may be the asking price for the Scobee building itself.

Greenberg said that last he heard, Scobee’s lawyers wanted $3.7 million for the building, a figure that Greenberg said sounds unrealistic in the current economic climate.

Give the guy his signs back already

From the NY Times:

The question sounds simple enough: If the police take items from a man who they believe stole them, but he is never convicted of any crime, does he get the items back?

In New York, the answer is seldom straightforward, as William LeRoy has come to realize.

Mr. LeRoy, who owns Billy’s Antiques in Greenwich Village, is trying to reclaim possession of about 100 vintage subway signs that were seized as evidence upon his arrest on theft charges. With the charges now dismissed in Manhattan Criminal Court, Mr. LeRoy wants the signs back.

But the Manhattan district attorney’s office has said it does not have the authority to return them, and is unsure who the rightful owner is. The office told Mr. LeRoy that he may have to sue to get them back.

The district attorney’s stance is based mostly on a provision of the New York City administrative code, which essentially puts the burden on people who have property taken from them to prove they are the rightful owner.