Before the pandemonium of Sandy and the chilling effects of Athena, there was a press conference. On October 22nd, tenants from the Vantage/Lone Star buildings in Inwoood and Washington Heights joined their elected officials for a press conference to save their homes! To watch the video, click here.
Filed under Blog
Photo: William Alatriste, WNYC
Flor Matos, una de las residentes del inmueble 566, de la calle 190, que vive desde hace 29 años en el sitio, expresó sentirse muy preocupada ante la incertidumbre de no saber lo que va a pasar. “De llegarse a vender el edificio, por más de lo que vale, es casi seguro que nos van a subir la renta y continuaremos esperando para que nos reparen la calefacción.” (El Diario)
Flor Matos, one of the residents of the property at 566 W. 190th St, who has lived in the building for 29 years, said she was very concerned about the uncertainty of what will happen. “By selling the building for more than it’s worth, it is almost certain that they will continue to raise the rent and wait to repair the heat.” (Our own translation.)
City Council Speaker Christine C. Quinn
“It’s outrageous that Vantage and Lone Star would jeopardize the stable housing of hundreds of New Yorkers to turn a quick buck,” City Council Speaker Christine Quinn said in a statement. “If these buildings are sold with millions of dollars more in unsustainable debt, tenants will be the ones who pay the price when the new owners can’t make mortgage payments or repairs. I urge Lone Star and Vantage to put tenants first and to sell these properties to a responsible buyer who will ensure the upkeep of these buildings is maintained.” (Crain’s NY)
Commissioner of HPD Matt Wambua
“We want to make sure that to the extent that these buildings are sold that they’re sold to responsible owners and that they’re sold at prices that will be responsible prices,” HPD Commissioner Matthew Wambua said. (WNYC)
_________________________________
More Press is below. You can read HPD’s press release here, and please stay tuned as we continue to add press links throughout the day!
Filed under Blog
Investing is a tricky thing that I (as a recent college graduate on Americorps wages) don’t pretend to understand. But I do know that responsible investing is crucial, particularly for public pension fund managers, and that socially-ignorant investments is one way that a lot of large, irresponsible companies profit.
As you know, we are working on an exciting campaign in Washington Heights and Inwood with tenants from 16 different buildings in foreclosure owned by private equity backed Vantage Properties. When the Anglo-Irish Bank failed in 2010, Lone Star Funds purchased many of their assets, including the mortgages on these buildings.
To us, it’s not a surprise these portfolios are now in foreclosure. We’ve written before about the Cycle of Predatory Equity, and with Vantage’s problems with harassment. We don’t know much about Lone Star, but what we do know we don’t trust. Like Vantage, they are a private equity company which buys non-performing loans and failed companies or banks to turn a profit. They’re based in Dallas, Texas, and they’re in trouble with the law in South Korea. Lone Star manages many different funds that wealthy people can invest in; the fund that owns the buildings are concerned with is Lone Star Real Estate Funds II (LSREFII) – Clover Trust.
Private equity companies (that become predatory equity landlords) are funded by wealthy investors and, in many cases, public pension funds. Lone Star specifically manages many different private equity funds that wealthy people can invest in. According to Prequin, 26 United States public pension funds (including two in New York State) have invested with various entities connected to the Lone Star Funds. The NY State Pension Fund is invested one of Lone Star’s funds, and the New York State Teacher’s Retirement System has invested $75 million in the specific fund which (we believe) owns the specific mortgages on the buildings in question.
This is compelling information. It means that state employees and more surely teachers’ salaries are invested in a company that is potentially acting against their interest. (We don’t know much about what Lone Star plans to do with these buildings, but a lawyer from the Clover Trust has indicated they are unlikely to meet with tenants.) It means that the very people who live in the building are, without their control, investing a portion of their salaries and retirement into a company that is not providing answers about the future of their homes, and potentially fueling the ongoing housing crisis.
Employees working for the State of Oregon also have pension funds with investments in Lone Star, and they are not happy about it. Just this April, two public employees in Oregon sued Lone Star Funds arguing that they were not adequately informed that Lone Star’s executives in South Korea were charged of stock manipulation. According to an article in The Oregonian:
The lawsuit focuses specifically on the state’s alleged failure to conduct adequate due diligence before and after Lone Star and its top executive in South Korea were convicted in 2008 of stock manipulation in connection with their buyout of the Korea Exchange Bank. But it is also a broad indictment of the state’s massive bets on risky private equity funds, and a see-no-evil-hear-no evil approach when it comes to money managers who generate profits.
We don’t know why or how New York began investing with Lone Star Funds, but we are encouraged by what is happening in Oregon and hope to explore similar ways to use pension funds as leverage in our campaign.
Are you a teacher? Do you receive a pension fund from the Teacher’s Retirement System and are interested in getting involved in this fight to preserve affordable housing in NYC? If so, get in contact with us at thesurrealestate@gmail.com or comment on this post. If you’re not sure whether or not you receive a pension from the Teacher’s Retirement System, click here for more information.
Filed under Blog
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!
Filed under Blog
Happy Friday, from UHAB Organizers. It was an eventful week for us, with tenant meetings at two of the Vantage buildings in foreclosure and a couple other buildings in foreclosure with Flushing Savings Bank in Brooklyn. Thanks to Councilmember Ydanis Rodriguez and Speaker Christine Quinn for their support at meetings this week.
Today we’re giving you something of a “news roundup.” Things that happened this week that we liked, things that made us angry, and some things we just found interesting. Enjoy!
Cea Weaver
Danielle Siegel
elisegoldin
kerri.e.white
TheSurRealEstate
