The Surreal Estate

Perspectives on Tenant Organizing from the Urban Homesteading Assistance Board

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Not Another Vantage!: Tenant Demands for the Next Landlord of Lone Star/ Vantage Portfolio

elsa gomez

The tenants living in the Lone Star/ Vantage buildings in Upper Manhattan are in preparation mode. As I’m sure you remember, 10 Vantage buildings fell into foreclosure in April 2012, and  Lone Star Funds, a private equity company, holds the debt on the buildings.  Together, Lone Star Funds, Vantage, and AREA Property have been trying to find a buyer for the portfolio. Rather than waiting idly by while Lone Star and Vantage make deals with buyers behind their backs, tenants have continued organizing and actively preparing for what’s to come!

While a new landlord hasn’t publicly stepped forward, tenants are demanding a landlord who will be responsible, work with them, make necessary repairs, and, above all, not be another Vantage! Tenants from several buildings in the portfolio have compiled the following letter, which lists demands for the new landlord. They have sent the letter en masse to Lone Star Funds.  With strong tenant associations and leadership, they plan to use these demands to hold a new buyer, whoever it may be, accountable.

For questions or copies of the letter as well as translation into Spanish, please contact us at thesurrealestate@gmail.com.

___________________________

Marc Lipshy

Lone Star Funds

888 7th Avenue, 11th Floor

New York, NY 10019

 

Dear Mr. Lipshy,

We are writing to you as concerned tenants of 9 Thayer Street, 566-570 W. 190th Street, 552-556 W. 188th Street, 90 Ellwood Street and 248 Sherman Avenue.  Lone Star Funds currently has our buildings in foreclosure and now the owner of the buildings has put them up for sale.  Presumably, this is an attempt to find a buyer who can pay Lone Star Funds a substantial amount of what is owed on the mortgage and bring an end to the foreclosure.  However, we have serious concerns about how a speculative sale will affect tenants.  Our buildings were overleveraged by Vantage, which led to deferred maintenance, harassment of tenants and now foreclosure.  We do not want our buildings to be flipped to yet another owner who has unrealistic expectations of what they are worth, who will starve the buildings of maintenance and seek to oust our long-time rent regulated tenants.

As the note holder in the foreclosure action, Lone Star Funds has a great deal of control over any prospective sale of the buildings.  We ask that you meet with us to discuss the possible sale of the buildings and be open with us about any potential new ownership, so that we have a chance to review their history and qualifications.  Ideally, we want to see our buildings sold to a developer on HPD’s list of approved developers.  These are individuals and organizations who have a proven ability to manage distressed and affordable housing.  We further ask that any proposed buyer be made aware of the following issues that are important to the tenants in our buildings and be ready to address these concerns upon taking ownership:

  • Comprehensive repairs: many tenants need repairs in their apartments and some have waited years.  We ask that any new owner repair all outstanding code violations in the buildings within six months of taking ownership.
  • MCI increases: the new owner should not seek to institute MCI increases until all code violations are addressed and all basic building systems (boiler, roof, security, etc) are in good working order.  Further, the new owner should hold meetings with our tenant associations prior to undertaking any MCI projects, so that tenants can be aware of any significant work that will be done in the buildings.
    • Communication with ownership and management: we ask that the new owner, or their management, meet with our tenant associations on a regular basis to address building-wide concerns that may arise.
    • Leases: due to the confusion that has resulted from the foreclosure process, some tenants still do not have renewal leases.  We ask that any new owner not institute any legal proceedings against tenants for two months, in order to provide time to clear up any issues with paperwork.
    • Lead paint: though some apartments have been tested for lead, in buildings as old as ours, it is likely that lead is still present in many apartments.  We ask that a new owner do comprehensive lead testing throughout the buildings.
    • Security: security could be improved in many of our buildings.  We ask that all front doors be secured and that the owner supply enough keys for every member of each household.  Some buildings also need repairs or replacement of the intercom systems.

    Obviously, we will address these issues directly to the eventual owner of our buildings.  However, as the plaintiff in the foreclosure process, Lone Star Funds is currently in the position to exercise control over the terms of a sale and thus we are calling on you to make our concerns known.

    Please contact Dan DeSloover of the Urban Homesteading Assistance Board to arrange a meeting with representatives of our tenant associations.Sincerely,

    The Organized Tenants of 9 Thayer Street, 566-570 W. 190th Street, 552-556 W. 188th Street,

    90 Ellwood Street and 248 Sherman Avenue

    Contact for Dan DeSloover:

    120 Wall Street, 20th Floor

    New York, NY 10005

    212.479.3337

    desloover@uhab.org

What Will Happen to 9 Thayer?

Yesterday, El Diario published an exciting article about 9 Thayer, a building we’ve been organizing as part of our latest Vantage/ Lone Star campaign!  Just to remind you, Vantage Properties, the notorious landlord and private equity group with over 5,000 apartment units in New York City (mostly upper Manhattan and Queens), has defaulted on several mortgage portfolios.  Lone Star Funds, another private equity group based in Dallas, Texas, has purchased the debt on sixteen of these buildings in Upper Manhattan.  Among these buildings is 9 Thayer.

Ana Cruz, a tenant of the 9 Thayer, told the El Diario reporter in Spanish that no one knows what will happen to her and the other tenants, but they will fight to stay in their apartments.  She hopes that whoever buys the building will be a better landlord than Vantage.

Working with tenants in the Vantage/ Lone Star portfolios has been an exhilarating experience for us because of how much energy and fuerza the tenants bring to  fighting for their homes.  There is a great sense of community within the buildings, in part because the tenants have developed it for the thirty or forty years they’ve lived there.  The majority of tenants in the Washington Heights/ Inwood neighborhoods we’re working in are Dominican, which means they share a language, a culture, and a common experience.  Like other predatory equity groups, Vantage bought these buildings for too much money, proceeding to aggressively harass rent-stabilized tenants in attempts to force them out and raise the rents. Many of the tenants we have recently met suffered alongside one another when harassment was at its peak.  Our experience organizing in buildings with such community and determination to fight has allowed our campaign to take off.

We hope that the 16 buildings in foreclosure with Lone Star Funds will see a similar outcome to another Vantage property that is in the news today. Savoy Park, an 1,800 unit complex in Upper Manhattan was recently sold by Vantage and AREA Partners to through a joint fund between Citibank and affordable housing developers, L&M Development Partners.  The story is similar – Vantage overpaid for the buildings during the housing boom, and was unable to carry out its plans to force tenants out and raise rents. At the time of purchase, Savoy Park’s mortgage had been in default for nearly a year, though foreclosure proceedings had not officially begun. David Dishy, president of L&M said in a statement published by Crain’s NY that

We are committed to preserving affordability and upholding the unique culture and vibrancy of the Savoy Park community.

We hope that the Vantage foreclosure buildings with Lone Star Fund mortgages (like 9 Thayer) are also able to see a bright future and permanent affordability. Whether or not the buildings experience a good outcome with the foreclosure depends on what Lone Star Funds is planning to do with them.  Will they keep them? Will they sell them, and if so – to who?  This is what tenants want to find out, and they are determined to have a voice in the process!

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