de Blasio illicitly rewarded city hall and presidential campaign PAC donors to abused third party transfer program for city foreclosed buildings

 
NY Daily News

Groups selected by the city to take over foreclosed properties both employ and have close ties with dozens of donors who have given generously to politicians with a say over the fate of the valuable buildings.

A Daily News analysis of for-profit and non-profit entities approved by the city to take over the “distressed” buildings found workers and directors for most of those entities donated cash to local political campaigns. Of the 37 outfits approved for the city’s controversial “third-party transfer” program, at least 21 employ or have close connections with someone who donated, campaign finance records revealed.

Political observers and critics of the program say the donations, coupled with the city picking the companies to take over the properties, many of which are in quickly gentrifying neighborhoods, raise thorny issues.

“These are the kind of things that make me wince. There is something here that doesn’t smell right,” said Betsy Gotbaum, executive director of the Citizens Union good government group. “Who benefits? Why are these particular people benefiting?”

All told, from 2013 campaigns to the present, the donors gave at least $100,000 to local and national political causes, including Mayor de Blasio’s presidential run. Of all the politicians they’ve given to, de Blasio holds the most sway. He is chief of a bureaucracy that chooses who gets the valuable properties and who doesn’t.

Since his 2013 mayoral run, de Blasio has received $4,900 from Nancy Lepre, president of Avante Contracting; $10,950 from Frank Carone, a board member and audit committee chairman at RiseBoro Community Partnership; and approximately $14,000 from others affiliated with the city-selected, third-party-transfer companies.

Both Avante and RiseBoro are among entities approved by the city to take ownership over buildings the city forecloses on. Other companies whose board members, employees or relatives have given include Lemle & Wolff, the St. Nick’s Alliance and the Urban Homesteading Assistance Board.

But Carone stands out among this broad constellation of donors.

 But Carone stands out among this broad constellation of donors.

 Not only is he on the board of directors at RiseBoro, the non-profit once known as the Ridgewood Bushwick Senior Citizens Council and synonymous with the disgraced late Assemblyman Vito Lopez, Carone is the chief lawyer for the Brooklyn Democratic Party. In that role, he wields vast influence over the candidates the party chooses to sit as judges in Brooklyn’s courts.

The judges chosen by the party go on to hear cases involving foreclosures under the third-party transfer program. If a judge rules in the city’s favor, the city can then transfer the properties to entities such as RiseBoro, which can then begin collecting rent from tenants.

“It is very troubling,” said Serge Joseph, a lawyer for a Bronx co-op that was recently foreclosed on under third-party transfer. “If you put that on top of everything else, it becomes overwhelmingly troubling.”

 “Everything else,” according to Joseph and many other critics of TPT, is the lack of notice provided to owners by the city prior to transfers taking place, the way the city defines a “distressed” property, and the city’s failure to provide assistance to struggling buildings in its Housing Development Fund Corporation (HDFC) program.

After judge's decision, the city is still trying to disenfranchise Brooklyn homeowners

Kings County Politics

With millions of dollars of intergenerational black and brown community wealth on the line, the city argued in federal court filings yesterday, that its Third Party Transfer (TPT) program passes U.S. Constitution muster, and that property owners who have had their fully paid off properties taken with no compensation should be denied recourse in their effort to certify a class action lawsuit.

Under the TPT program – the subject of an ongoing KCP investigative series – the city seizes properties they deem “distressed,” and give them to the public/private non-profit Neighborhood Restore, who in turn give the property for a nominal fee to a qualified non-profit or for-profit developer. The program was created in the late 1970s, when the city had a large number of abandoned and neglected buildings.

However, with gentrification, these properties, and others in the same program, are now worth millions of dollars in market value. Almost all were completely paid for with no mortgage and located in traditionally black and brown neighborhoods, which are becoming increasingly gentrified.

In early March, three of the property owners, McConnell Dorce, Cecilia Jones and Sherlivia Thomas-Murchinson, filed papers in the U.S. Southern District of New York Federal District Court alleging their properties were unconstitutionally confiscated under the in rem foreclosure process.
Their filing was to seek certification to pursue a class action lawsuit, which if successful, could cost the city tens of millions of dollars and the return of dozens of property.

 Their suit was bolstered in late March, when Kings County Supreme Court Judge Mark Partnow ordered the city to give six Central Brooklyn property owners their property back, restoring millions of dollars of intergenerational wealth in the black and Latino community.

Judge rules in favor of Brooklyn homeowners against city's government program TPT plunder scheme.

Kings County Politics

In a sweeping decision, Kings County Supreme Court Judge Mark Partnow yesterday ruled that the City of New York violated the U. S. Consitution in the seizure of six central Brooklyn properties, and ordered the city to give them back to their owners, restoring millions of dollars of intergenerational wealth in the black and Latino community.

The city attempted to take all the properties under the Department of Housing Preservation and Development’s (HPD) Third Party Transfer (TPT) program, and in which KCP has been doing an ongoing investigative series. 

Under the TPT program, the city seizes properties they deem “distressed,” and give them to the public/private non-profit Neighborhood Restore, who in turn give the property for a nominal fee to a qualified non-profit or for-profit developer. The program was created in the late 1970s, when the city had a large number of abandoned and neglected buildings.

However, with gentrification, these properties, and others in the same program, are now worth millions of dollars in market value. Almost all were completely paid for with no mortgage and located in traditionally black and brown neighborhoods, which are becoming increasingly gentrified.

When the city takes property under TPT, they give no equity to the property owners, who in many of the cases paid thousands of dollars in back taxes and water bills to the Department of Finance, which was never registered as being paid.

Much of the properties taken by the Third Party Transfer (TPT) program are located in rapidly gentrifyingng neighborhoods in Brooklyn.

Partnow rulings were on six separate property cases that came before his court. Two of the properties – 25 McDonough Street in Bedford-Stuyvesant and 19 Kingsland Avenue in Williamsburg/Bushwick were the subject of several of the KCP stories. The other properties Partnow ruled on were 1055 Bergen Street in Crown Heights, 972 Rutland Road on the Brownsville/Crown Heights border, 315 Harman Street in Bushwick and 463 Classon Avenue in Clinton Hill.

“The City has particularly targeted properties that are owned by minorities. The court recognizes that home ownership is an important means for families to build intergenerational wealth. While the Third Party Transfer Program was intended to be a beneficial program, an overly broad and improper application of it that results in the unfair divestiture of equity in one’s property cannot be permitted,” wrote Partnow in his ruling.

Partnow found several problems with the taking of all these properties including a lack of process in serving property owners that their property was being taken, and that the properties in questions never met the definition of being distressed.
But time and again, in each of the cases Partnow noted the city took properties worth millions of dollars without giving any equity/compensation to the owners.

“The transfer of the Kingsland property to Neighborhood Restore is also unconscionable and shocking in the conscience of the court based on the amount of the City’s lien versus the substantial value of the Kingsland property. In addition, since the Kingsland property is not a distressed property, the taking of it through the Third Party Transfer program would constitute an unlawful taking of private property without just compensation in violation of Kingsland’s HDFC’s constitutional rights under the Takings Clause of the Fifth Amendment of the United States Consitution and article 1, section 7, of the New York State Constitution,” he wrote.

Anyone seen the former HPD director Alicia Glen lately? Because her dirty vampire calimari hands are all over this. 


Admin note: if anyone is not familiar with her background, she previously worked at Goldman Sachs in their Urban Investment Group dept., which this neighborhood would certainly meet it's qualification for "urban" and it's gentrification as "investment". As for my description, she sardonically replied in a Vanity Fair article about Rolling Stone writer Matt Taibbi's description of GS as a Great Vampire Squid by saying that her former employer are actually nice little calimari.

Long story short, this woman should be indicted and arraigned on punitive charges for what she did to these homeowners while running HPD.

Pols call for moratorium on property seizures

From PIX11:

Hundreds of homeowners throughout New York City have been defrauded out of their homes. Now, elected officials are calling for a federal investigation into the matter, including whether a city program may be partly to blame.

"There needs to be a moratorium on taking houses from these homeowners until we can make sure that somethings not unethical, illegal, or immoral," said Brooklyn Borough President Eric Adams.

Adams says his office has heard dozens of similar stories over the past year: homeowners in rapidly gentrifying areas, like Bed-Stuy, forced out of their homes. He says it's usually been one of three causes:

Forced foreclosures
Deed fraud
City's third party transfer program

"We believe when you have something of this magnitude that could be a large number of black and brown homeowners losing their homes, when the dust settles we cannot look back and say wow we should have paid attention to this," Adams said.

Which is why he and City Council Member Robert Cornegy are calling for a stop on all property seizures pending federal, state, and city investigations. For it's part the city's office of Housing Preservation and Development, which runs the TPT program, says it's unfair to lump it in with other illegal activities scamming people out of their homes.

DeBlasio unfairly seizing properties

From Kings County Politics:

Mayor Bill de Blasio today defended the city’s taking of more than 60 properties in Brooklyn – including those of at least three fully paid off African American owned properties worth millions of dollars – and transferring their ownership for “re-development” to non-profit and for profit companies.

But New York State Attorney General Candidate Keith Wofford took de Blasio and the entire city government to task for incompetence at best, and illegal political corruption at worst, in seizing the properties.

“What’s happening here is disgraceful and likely illegal. Mayor De Blasio lives nearby and sleeps securely at night, while his administration creates anxiety and fear among vulnerable citizens whose largest asset is ripped away without compensation or due process,” said Wofford.

Wofford went so far as to call the foreclosure proceedings “unconstitutional,” and urged the Mayor to act immediately in stopping anymore transfers under the program.

The program that the city’s Department of Housing Preservation & Development (HPD) utilizes in taking properties is called the Third Party Transfer (TPT) program, which goes back to the 1980s when New York City had many blighted and burned out properties. The program designates qualified sponsors to purchase and rehabilitate distressed vacant and occupied multi-family properties in order to improve and preserve affordable housing for low-to moderate-income households.

Over the years the program has been amended in its definition of distressed properties, most recently in 2016, in which the City Council approved an expansion of the program to include buildings which are subject to Environmental Control Board (ECB) judgments as a result of building code violations in the amount of a lien to value ratio equal to or greater than 25%.

In order for HPD to obtain the foreclosure judgments, the agency sought, needed and received city council approval – an approval that some city council members now say they approved because HPD misled them.

The story came to light, when KCP learned the city foreclosed on Marlene Saunders, 74, a retired nurse, who nearly lost her paid-off and in pristine condition brownstone at 1217 Dean Street on a rapidly gentrifying block in Crown Heights.

The three-story brownstone had been in the Saunders family for 30 years and has been appraised at over $2.2 million. Saunders son showed KCP copies of checks paid and cashed by the city for property and water taxes, but were never applied to the property. He also stated the family knew nothing about the court proceeding, in which a foreclosure judgement was issued and only learned the family no longer owned the property through a flyer delivered to the brownstone months after they lost the deed.