Tag Archive | "Hunter Management"

Troubled Bronx buildings flipped again

Troubled Bronx buildings flipped again

Dyan Kerr

Dyan Kerr deals with a wall of mold in her Williamsbridge apartment. (STEVEN GRABOSKI/The Bronx Ink)

With a single tap of the finger, mailboxes open at 1585 East 172nd Street in Soundview. It’s a trick anyone can pull off. “Social Security and Section 8 checks have gone missing,” said Andres Rios, the leader of the building’s tenant’s association. Broken mailboxes are just one problem facing Rios’ building, one of six notoriously distressed buildings in Highbridge, Morris Heights and Soundview. The buildings have been in disrepair since 2006, bouncing from owner to owner, each either without a plan to fix them or the money to carry the plans out. The buildings were sold again in September, this time to Bronx real estate agent Anthony Gazivoda, for $21.4 million. Gazivoda paid almost $7 million more than the previous owner, a surprisingly high purchase price that has tenants and housing advocates afraid that the new owner will find himself just as cash-strapped as the previous ones. “There is no financial story that justifies that sale,” said Dina Levy, executive director of the Urban Housing Assistance Board, the advocacy group that has been following the plight of the buildings. “You can twist it but you still can't justify it. There's no amount of rationalization that gets you to $21 million. That's troubling.” Anthony Gazivoda did not respond to numerous interview requests. From the outside, Gazivoda appears to have very few options for turning a profit on the buildings, which house low-income families who cannot afford to pay high rents. Gazivoda is also limited by city regulations, which prevent him from raising many of his tenants’ rents above a small percentage every year. With no clear profit prospects, tenants and housing advocates are worried that Gazivoda will not have the financial means to make the repairs that are desperately needed. Even worse, they fear that he will stop maintaining the buildings altogether, just like the previous owners. “I cannot believe we're here again,” said Levy. “Except this time it's more money, more money than has ever been put on these buildings.” The buildings, which sold for $13.5 million in 2010 to previous owner BXP 1 LLC, had 379 violations of the city’s housing code on Dec. 6. The violations range from broken windows and leaky ceilings to padlocked fire exits, entrances that do not lock, and exposed electrical wiring. Four of the buildings have lead-based paint violations.
History of Neglect Anthony Gazivoda is the fourth landlord in the past five years for the six Bronx buildings. The previous three have not been able to improve the dilapidated conditions in the buildings.
The problems are nothing new in the buildings, which have been poorly maintained since the now-defunct Ocelot group purchased them in 2006. After a bitter power struggle left Ocelot without the money to carry out repairs, the group became an absentee landlord, neglecting maintenance until things were so bad that the city took the group to court and ordered them to repair nearly 3,000 violations and pay a $60,000 fine. They were then sold in 2009 to Queens realtor Sam Suzuki of BXP 1 LLC. Suzuki ended up being no better than Ocelot; under his ownership the buildings racked up over 2,500 housing code violations and two of the Morris Heights buildings made the city’s most distressed list. Angered, the tenants of the Soundview buildings took Suzuki to court where a judge ordered that he make emergency repairs and sentenced him to jail when he failed to do so. The Manhattan-based Bluestone Group took control of the buildings in June of 2010, promising to make repairs and take a long-term interest in the buildings. Yet Bluestone orchestrated BXP 1’s sale of the buildings to Gazivoda a little over a year later, and angry tenants accused the company of doing just enough to sell the buildings for a profit. Tenants were initially weary when Gazivoda took over and reported that, like Bluestone before him, Gazivoda asked for a month to begin carrying out repairs. But since then, tenants in the Highbridge and Morris Heights buildings say that security has improved. “Most of these owners, when they first come here they promise one thing, but then it changes,” tenant Wilfreda Gonzalez said back in September. Gonzalez had high hopes when Gazivoda purchased her building at 1640 Dr. Martin Luther King Blvd. "This owner, at least I can say that he put in the cameras and intercoms.”
Anthony Gazivoda

Anthony Gazivoda

But more than a month later, the 11-year resident felt differently about ownership. A leak from the apartment above damaged her bathroom walls last summer, and the tiles have yet to be replaced. “They're giving me the runaround,” said Gonzalez, who has called the landlord repeatedly. “He bought the apartment and he has to fix it.” Gazivoda is both an important and mysterious figure in the Bronx real estate market. The 51-year-old Albanian realtor, who sits on the business development board at Hudson Valley Bank, has been in the real estate business since 1978. Since then, city records show that over 40 real estate companies tied to the Gazivoda family have come share the same 3200 Cruger Ave. address. Altogether, Gazivoda and his family own almost 40 buildings in the Bronx.
Bronx Albanians move into real estate Albanians first migrated to America in 1876, according to Constantine Demo, author of The Albanians in America. But they began to move to New York City in big numbers in the 1960s, settling in the Bronx around Morris Park, Arthur Avenue and Pelham Parkway, said Ismer Mjeku, the publisher of the Albanian Yellow Pages, an annual guide for Albanian personal and commercial contacts all across the countryAs Albanian immigrants were settling in these Italian enclaves of the Bronx, they concentrated in the food and restaurant industry, which until then had been mainly run by Italian families. Gradually Albanians took over the business and, in the 1980s, displaced many Italian owners from those restaurants.In their pursuit of business diversification, Albanians got into real estate and started amassing properties. According to Mjeku, today the Albanian community owns almost a third of all the apartment buildings in the Bronx, although he said there is no official data to support his claim.The 2011 edition of the Albanian Yellow Pages shows at least 26 Albanian-owned real estate companies operating in the Bronx and Mt. Vernon. -Mahmoud Sabbagh
Despite owning so much land, very little is known about Gazivoda himself, and the lack of information is worrying to housing advocates. “Who these people are is not clear to us,” said Levy, who has worked at the Urban Housing Assistance Board for seven years. Levy added that Gazivoda “has a very insular network.” Gazivoda has a mixed record as a landlord. Some of his buildings have no violations, others have as many as 98. And though none of the buildings are as bad as his latest purchases, tenants in his more troubled buildings paint a negative picture of the landlord. Dyan Kerr lives in one of Gazivoda’s older properties with her family at 678 East 225th St. in Williamsbridge, where violations decreased from 58 to 26 from October to December. Despite the drop in violations, Kerr said she has been dealing with mice and mold for over a year. “I’m tired of this place,” said Kerr, who has inch-long mold dots clearly visible in her bathroom. Kerr said that management has cleaned the mold in the past, but it kept growing back. In addition, Kerr revealed brown filth in her kitchen cabinet that she said were mice droppings. “This is how we’re living now because people don’t want to fix nothing,” Kerr said. Bathroom mold is also a problem a few miles away in Belmont, where Shantelle Guzman lives in another of Gazivoda’s older properties. “They paint over the mold and the super doesn’t fix anything, he doesn’t live here,” said Guzman, who lives at 611 East 182nd St. Guzman’s apartment also has holes in the walls, where she said mice enter her one-bedroom apartment. She is also upset about shoddy heating that forces her and other residents to use their ovens for heat and an irregular flow of hot water in the building and would like to leave. Back in Soundview, moving has never been an option for Rios, who has led his tenant’s association through five different landlords in 14 years. If necessary, Rios is gearing up for the next battle. “I like to bark and bite,” said Rios, who showed Gazivoda the faulty mailboxes in front of a group of tenants at a meeting on Nov. 9. Before exiting, Gazivoda assured his tenants that the mailbox problem, as well as the dysfunctional fire alarms, would be addressed. “He said it would be taken care of but that it’s not going to be done quick,” he added, discouraged. “I guess to them it wasn’t a priority.”

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The Soundview Tenants Who Fell Through the Cracks

by Donal Griffin and Matthew Huisman with audio slideshow by Carmen Williams

Martha Castro cannot remember how many mousetraps and glueboards she has scattered around her two-bedroom apartment on East 172nd Street in the Soundview neighborhood of the Bronx. All she knows for sure is that four are in the bedroom where her granddaughter sleeps. "We're not really getting heat," Castro said. "There's something wrong with the pipeline so we don't get no heat. The only place that gets warm in this apartment is the kitchen and the living-room." Her son wants her to move to Florida, away from the cold weather and her home of 21 years. But that would take Castro away from her case in Bronx Housing Court against Hunter Property Management, the company responsible for managing her building and five others throughout the borough.
Residents living in Hunter-owned buildings have problems like rat, roach and mice infestation. Photo by Connor Boals

Rat holes in an apartment in 1585 East 172nd Street. Residents accuse their landlord of not making repairs. Photo by Connor Boals

On Hunter’s watch, the buildings have racked up thousands of housing violations. Residents have accused the company of not being able to afford the repairs. “I might just say ‘to hell with it’ and leave,” said Castro, who is 65. “But I hate to have started something and leave it half undone.” Castro’s is the latest chapter of an all-too familiar story in the Bronx after the real estate crash in 2008, one that pits low-income tenants against their debt-laden landlords struggling with bank repayments. On the side of the residents is an aggressive non-profit, the Urban Homesteading Assistance Board (UHAB), which has helped Castro and other residents organize against Hunter. Based on Wall Street and led by a spiky activist named Dina Levy, UHAB began its campaign in September of this year with flyers accusing Hunter – which is associated with the buildings’ owners, BXP 1 LLC – of not having the funds to repair or even maintain the buildings.
A UHAB flyer organizing a tenants' protest meeting.

A UHAB flyer organizing a tenants' protest.

The tenants and UHAB then held a protest meeting in the lobby of Martha Castro’s building in October, but a Hunter security official called the police, further antagonizing both sides. Hunter’s general counsel, Alice Belmonte, said that the tenants had every right to hold the meeting, but any UHAB activist would be considered a trespasser. “UHAB had already trespassed in the building,” Belmonte said, “by littering it with flyers.” Conditions in the buildings continued to worsen in November as city housing inspectors noted that the property manager had failed to make even basic repairs to broken smoke detectors and bathroom faucets. UHAB and the residents then decided to march into the Bruckner Boulevard branch of the Dime Bank and Savings, the bank that has backed two sales of the buildings in less than three years. Security officers escorted the protesters off the premises and they then picketed outside, attracting some unwanted publicity for Dime. The tenants had contacted bank officials before about the buildings' worsening conditions, but got little in response, according to the advocacy group. "The message at the time was that it's not our problem,” said Dina Levy. "We got a bullshit letter back (and) this blow-off phone call." Indeed, the Dime’s chief lending officer, Dan Harris, had previously stated to Bronxink.org that the bank could do little to help the situation as it was “just the lender.” Andreas Rios, a 13-year resident at 1585 East 172nd Street, said he wrote to Dime Bank personally when his request for repairs to his apartment went unheeded by the building's super. "They explained that if that's the situation, 'We can't get involved,'" Rios said. "That's your problem." But three days after the protest, on Nov. 23, Harris met with the residents and the non-profit. “I think we got their attention,” said Rios. Getting the bank to the table was crucial to putting pressure on Hunter, according to UHAB, and the militant strategy appears to have worked. “We are optimistic that tenant representatives, the owners, UHAB and the bank will have a follow up meeting soon,” said Harris, “where we can air all the issues and find practical solutions which benefit all parties.”
Sam Suzuki, the property developer behind Hunter Property Management LLC.

Sam Suzuki, the property developer behind Hunter Property Management LLC.

But Harris has more to worry about than just negative publicity. Dime Bank had backed the $13.2 million purchase of the six buildings in May 2009 to a company called BXP 1 LLC. This is managed by the same property developer who owns Hunter: Sam Suzuki. This “over-leveraged” position is now a critical problem, according to Levy, while residents like Castro have also stopped paying rent in protest, further weakening the buildings’ financial position. "But (even) if everybody were paying their rent,” Levy said, “the buildings would still have negative cash flow." Dime Savings Bank backed the original $16.6 million sale of the six buildings to the Ocelot group in July 2007. Ocelot had built up a portfolio of almost 30 buildings in Bronx, all of which were backed by Fannie Mae – with the exception of the six Dime-backed buildings. Ocelot’s principals then pulled their investment in late 2008 and sought to sell the entire portfolio to Sam Suzuki. But that deal collapsed earlier this year and Fannie Mae was forced to put its buildings into foreclosure.
A portable heater in one of the Hunter buildings is a necessity. Many of the building have infrequent heat. Photo by Matthew Huisman

A portable heater in a Hunter-managed apartment. Many of the buildings often go with out heat. Photo by Matthew Huisman

While the clamor surrounding the condition of the Ocelot buildings grew in the Bronx over the summer--even attracting the attention of U.S. Senator, Charles Schumer--Suzuki bought six of the buildings in May. The debt on the other Ocelot buildings has since been sold to another developer in a deal praised by UHAB and the city. But Suzuki’s buildings remain out of the spotlight, despite their decrepit state. The six buildings have 2,519 open violations with the Department of Housing Preservation and Development as of Dec. 6. The worst conditions are in Castro’s building on East 172nd Street, which has 528 violations. Two of the Highbridge buildings are now listed amongst the 200 most distressed buildings in the city. The violations include everything from the infestation of rats, roaches and mice to lead-based paint peeling from the walls. "The supers used to paint before and they don't even do that now," Rios said. "There's graffiti all over the place. You can even see the lead from the paint chipping out." The buildings have the potential for even more violations, but many go unreported. A lot of the residents receive a rent subsidy from the city, said Emmanuel Attram, a Ghanaian resident of another Hunter-managed property on nearby 1268 Stratford Avenue, and don’t protest their conditions for fear of losing it. This isn't the only reason. “There are a lot of illegal immigrants in this building,” said Walter H. Clark, another Stratford Avenue resident. “A lot of them won’t complain.” Castro’s court complaint against Hunter has already resulted in a court order from the Bronx Housing Court requiring Hunter to make various repairs to her building. “Some repairs have been made and some have not,” said Steven Di Cesare, Castro’s lawyer. “We can talk to the landlord more or go back to the courts – they’re the options.” Hunter's Alice Belmonte did not respond to questions from Bronxink.org about the company, the court case or about Sam Suzuki, as she said the company had an exclusive deal in place with another media outlet, which she would not name.
Conditions have deteriorated since Ocelot sold these buildings in May 2009. Photo by Matthew Huisman

Conditions have deteriorated since Ocelot sold these buildings in May 2009. Photo by Matthew Huisman

Suzuki's profile on Linkedin.com describes him as the principal in Hunter, which was registered with New York State's Division of Corporations in November 2008. The profile also states that he was a principal until last year in another company called Vintage Group LLC, which was "responsible for the acquisition and development of over $500 million in real estate developments." In 2008, Hudson Valley Bank foreclosed on one of his properties in Sands Point, Long Island, NY, in order to secure a $2.7 million debt. ChinaTrust Bank recently secured a $3.3 million judgment against the same property. “The Daily News” reported last month that yet another entity linked to Suzuki called Venator Capital LLC had purchased the RKO Keith’s Theater in Flushing, Queens, for $20 million. Suzuki more recently told "The New York Times" that he has yet to close the deal. The New York City property registry does not list any purchases by Venator Capital, however, while the Division of Corporations has no record of the company. According to Suzuki's profile, Venator Capital invests in distressed properties and its expertise is "the acquisition of troubled assets." Martha Castro said she cannot afford to make the repairs to her apartment on her own. Parts of the linoleum floor in her kitchen and bathroom caved in after a fire seven years ago damaged the structural integrity of the building. Earlier this month, Castro paid for a handyman to plaster the walls and paint, yet cracks and discoloration caused by leaky pipes still persist. “The things that have improved here,” Castro said, “they’ve come out of my pocket.” But having invested money and time in her home, she is hesitant to change. “You get settled in a place and you don’t want to move.”

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Bronx Residents Protest Poor Living Conditions

Posted in Bronx Neighborhoods, HousingComments (0)

1585-1589 E. 172nd St.

By Matthew Huisman

Martha Castro remembers when she moved into 1585 E. 172nd St. in  the Soundview section of the Bronx. "It was a very beautiful building,"  Castro said. "I've been here 22 years and this is the worst." Between 2006 and 2007, Ocelot bought 1585 and a neighboring building, 1589. After Ocelot ran out of money and abandoned the buildings, conditions deteriorated at a rapid rate. Tenants continued to pay rent, even as they lived with holes in the walls, rat infestations and sparse heat. “All we want is to get our service done and live decently,” said Castro, 65. “It´s a struggle because you want to live comfortable and not having to worry about, `Are we gonna have hot water?´” A company connected to Hunter Property Management purchased the two buildings, along with four other Ocelot properties, in May 2009. Since then, residents have been rebelling against their new landlords.
Residents of 1585 E. 172nd Street are organizing against their poor living conditions. Photo by Matthew Huisman

Police were called when residents at 1585 E. 172nd Street organized a protest in the lobby. Photo by Matthew Huisman

Residents’ anger at the decrepit living conditions bubbled over during a tenants’ meeting on Oct. 14. Castro, president of the tenants association, invited the Urban Homesteading Assistance Board, a non-profit organization that helps low-income residents collectively own and govern their buildings, to talk to residents about ways to improve their quality of life. “Management apparently called the police and said there was some disturbance at their building,” said Dan DeSloover of Urban Homesteading.  “We told police the tenants are holding a meeting and they invited us to come. Then they left.” A lawyer for Sam Suzuki, the principal manager of Hunter Management, said her client had no problem with tenants organizing, but the police were called because the UHAB members at the meeting were trespassing. “The buildings have over 3,000 code violations total,” said DeSloover of the six Hunter-owned buildings. “These buildings were under Ocelot before  Hunter and so the people here have had bad, bad conditions for years.” DeSloover and his colleagues from Urban Homesteading are chronicling the conditions that continue to exist in the five-story apartment buildings that butt up against one another. DeSloover said he plans to present this evidence to Dime Savings Bank of Williamsburg, the bank that issued the mortgages initially for Ocelot, then for Hunter in May 2009.  ”It will help make our case if we do get a meeting with the bank,” said DeSloover. “Maybe we can work with them to change ownership and better conditions.” mlh2171@columbia.edu

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When The Bubble Burst

How a New York real estate deal went bad, causing a housing crisis for hundreds of low-income families


View Ocelot in a larger map A map of all foreclosed and bankrupt Bronx properties mentioned in the story. Click on a location to read an in-depth story and watch an audio slideshow for each individual property. If you encounter problems viewing the map, click on the links below to view the slideshows and stories. red= Ocelot buildings currently in foreclosure. On Dec. 1, 2009, Fannie Mae sold the debt to Omni New York LLC. red806 E. 175th St. red1528 Bryant Ave. red1744 Clay Ave. red2254 Crotona Ave. red1663 Eastburn Ave. red1512-1524 Leland Ave. red621-627 Manida St. red1269-1271 Morris Ave. red1804 Weeks Avenue yellow= Ocelot buildings sold to BXP 1LLC on May 13, 2009. The buildings are managed by Hunter Property Management LLC. yellow1585-1589 E. 172nd St. yellow1350 Martin Luther King, Jr. Blvd yellow1636-1640 Martin Luther King, Jr. Blvd yellow1268 Stratford Avenue blue= Ocelot buildings sold to Bronx Apartments LLC on Aug. 26, 2009. blue422 East 178th St. blue4289,4301,4305 Park Ave.

By Donal Griffin

Additional reporting by Matthew Huisman, Wanda Hellmund, Sarah Wali, Connor Boals and Yoav Sivan LOUISE ALVAREZ cannot remember who used to live in the abandoned apartment in the building next to hers on Manida Street in Hunts Point. The mother of four pushed open its unlocked door one morning in October to find cooking pots caked with old food strewn among sneakers, used hoodies and open bags of trash. The stench of stale urine wafted out into the hallway. Nearly half of the apartments in the four decrepit buildings at 621-627 Manida St in the Bronx are empty. Like Alvarez, the remaining residents live with dangerous mold, vermin and only occasional heat in apartments that suffer from varying stages of decay. Most said their apartments began crumbling around them soon after the last owner vanished nearly one year ago. Many like Alvarez cannot afford to leave.  She is asthmatic, and has arthritis in parts of her hands and hips. “I ain’t moving,” she said, “let me tell you.”
Nearly half the apartments are empty in the Manida Street buildings. <br> <br>Photo by Wanda Hellmund

In less than two years, Ocelot had bought up nearly 800 apartments in the Bronx, including buildings on Manida Street which many of its low-income tenants refer to as the

A similar tale can be told by the tenants in 24 other buildings throughout the Bronx.  The aging apartment blocks have become known as “the Ocelot buildings,” named after the defunct real estate investment company that bought them between 2006 and 2007 at the peak of the housing bubble, only to abandon them in late 2008, as the market collapsed. Some news outlets have called Ocelot a “phantom” and, indeed, the company’s president could not be contacted for this article. But the consequences of a bitter row between Ocelot’s principals are very real for hundreds of families across the Bronx. Spending Spree VETERAN real estate dealer Michael Edery was part of a group in early 2005 that bought 1744 Clay Avenue and 1633 Eastburn Avenue, two low-income buildings in East Tremont. His group paid five times the rent roll for the pair of buildings, and sold them nearly two years later for $6 million, seven and a half times what the rents would yield. “The market was insane,” said Edery. “If it would have been marketed properly at the height of the market, we would have gotten eight times, eight and a half." Various entities surrounded the purchase, but Edery knew the buyer simply as Ocelot Capital Group. Ocelot appeared to have endless capital, and an endless appetite for apartment buildings in the Bronx.  Backed by a $29 million loan from Deutsche Bank (a debt it later sold to Fannie Mae), the company bought the Manida Street buildings for $7.2 million, Edery’s two buildings for $6 million and 15 more low-income properties in Morrisania, Pelham Parkway and Crotona for nearly $23 million. The Dime Savings Bank of Brooklyn then financed six more buildings in Highbridge and Soundview for $16.6 million.  In less than two years, Ocelot had bought up nearly 800 apartments all over the Bronx. Inside Ocelot OCELOT’S president was a respected New York attorney named Rachel Arfa, a graduate of Brooklyn Law School and a member of the New York State Bar since 1979. Arfa is a former partner of an international law firm called Fried, Frank, Harris, Shriver & Jacobson and a businesswoman whose strength is her legal expertise. Arfa’s father was a Hebrew scholar called Milton Arfa, who lectured in Yeshiva University and established the Israel Matz Fund to distribute grants to indigent Hebrew authors. Rachel Arfa, who lived on Riverside Boulevard in lower Manhattan during the Ocelot episode, is now a trustee of the charity along with Shlomo Sharan, an Israeli academic based in Tel Aviv. While Arfa managed the buildings in the Bronx, the cash for this costly venture came almost entirely from an obscure Israeli company called Eldan Tech.  According to its annual report, this Tel Aviv-based investment group controlled 80 percent of Ocelot.
Residents of 1585 E. 172nd Street are organizing against their poor living conditions. Photo by Matthew Huisman

The police were recently called on the residents of 1585 E. 172nd Street when they attempted to organize against their poor living conditions. Photo by Matthew Huisman

From Tel Aviv to The Bronx Arfa had close links to the Tel Aviv business world through her husband, Alex Shpigel. In 2002, the couple had raised $40 million from a group of Israeli investors for a major purchase in Harlem and the Bronx. Shpigel provided the financial fulcrum for the deal with his network of family and personal relationships in Israel, while Arfa used her legal know-how to set up its complex structure of real estate entities. But in 2007, some of the Israeli investors filed a civil suit in Manhattan’s State Supreme Court alleging that the couple covertly siphoned off $5 million in “secret commissions” from the sellers of the properties. These commissions were then loaded onto the purchase price. According to the same court filing, Shpigel threatened to kill an associate who found out. Arfa and Shpigel have denied all the allegations, and no criminal charges have been filed against either of them. The couple filed a counter suit in the same court against a former associate, whom they blame for the much of the mess. These tangled cases provide an unfortunate warning for disasters to come. The Fall BACK in the Bronx, the trouble began almost as soon as the couple sealed the deal on the Ocelot buildings. Many of their new tenants qualified for city and federal rent subsidies. This meant rent revenue alone would be too meagre to support the maintenance needs in these aging buildings. Money would have to come from elsewhere. According to the Department of Housing and Development, it never did.  Basic repairs – the responsibility of Arfa and Shpigel – ceased to take place. Thousands of official complaints flooded the city’s housing files listing everything from rat infestations to collapsing ceilings. Residents who had options began to abandon their apartments. Those who did not, endured a year and more of living in degrading conditions. The buildings racked up “immediately hazardous” violations. Six Ocelot buildings in particular ended the year on the city’s list of “most distressed.” By the end of 2008, nearly every one of the Ocelot buildings was in a state of serious decay. In response, the city’s Department of Housing Preservation and Development (HPD) took Ocelot to Bronx Housing Court in June 2008. It secured consent orders compelling the company to repair nearly 3,000 violations in six buildings and pay approximately $60,000 in fines. HPD officials claim that Ocelot never addressed the violations—the kind of negligence that could result in a contempt of court ruling, i.e. jail time.
A clogged bathtub in an apartment at 1640 Martin Luther King Boulevard. The tenants of this building have filed 297 complaints with the housing department since November 2008. Photo by Matthew Huisman

A clogged bathtub in an apartment at 1640 Martin Luther King Boulevard. The tenants of this building have filed 297 complaints with the housing department since November 2008. Photo by Matthew Huisman

Meanwhile, in October of 2008, Eldan Tech directors decided enough was enough. They voted to bail out. By then, the property market was collapsing on a global scale. The Ocelot costs had stung the company’s bottom line. In 2008, Eldan Tech reported “heavy losses of about 53 million shekels ($14.4 million) due to its real estate activities in the Bronx.” The cost for the Ocelot residents, however, was of a different nature. Broken front doors meant drug addicts could freely roam the halls. In one building, pigeons took up residence on an abandoned baby’s crib. Louise Alvarez and her children – and many Ocelot tenants all over the Bronx – lost their heat and hot water for the winter of 2008. Who’s to Blame? Arfa and Shpigel and their Israeli business partners are now locked in a vicious legal dispute to determine who is more culpable for this human and financial catastrophe. The Tel Aviv investors claim in their civil suit that Arfa lied about the buildings’ physical condition and financial performance and “incessantly demanded” more cash. Arfa’s lawyer, David Katz, countered that Eldan Tech failed to supply her with “millions of dollars” of needed maintenance money.   Katz also charged the Israeli company with bribing a senior Ocelot employee for confidential information about Arfa’s and Shpigel’s businesses elsewhere. The couple is now suing that ex-employee for $1 million in New York State Supreme Court.  The employee has denied the charges. “They're vindictive,” said Katz of Schlam, Stone & Dolan, referring to Eldan Tech principals. “They’re trying to avoid their responsibilities.” Enter Sam Suzuki While the legal squabble continued, Arfa began looking for a way out. Sam Suzuki, a long time property dealer based in the wealthy town of Port Washington, Long Island, emerged as a potential buyer. His company signed a no-cash deal in November 2008 and took on Ocelot’s debt with Fannie Mae. But Suzuki’s company never made any bank repayments and a lawyer for Suzuki would not explain why. This caused the deal to collapse in early 2009 and Fannie Mae foreclosed on the loans. Court-appointed receivers took over, putting most of the buildings – and their tenants – into a legal no-man’s land, where they remain today. A Fannie Mae spokesperson, Jon Searles, said that the bank is now “joining the receivers on inspections of the properties and funding much-needed safety repairs.” Such promises don’t wash with the tiny maintenance budgets that the receivers are currently struggling with. One receiver recently sought a court order to secure more cash from the bank for repairs. Searles also said that Fannie Mae is looking to sell the loan notes on the buildings to “responsible new ownership.” Who that “responsible” new owner might be, remains to be seen. Katz said that Arfa now wants the buildings sold to a non-profit, because the only parties hanging on for a for-profit deal are Eldan Tech and Fannie Mae. One of the interested parties, as it turns out, is Sam Suzuki.
Residents of 1585-1589 E. 172nd Street gather in protest against poor living conditions. Photo by Connor Boals

While Fannie Mae is looking for

Financial History In 1998, a legal firm tried to force Suzuki to declare Chapter 7 bankruptcy over a disputed $77,000 debt, a debt that was settled in 2001. Other trade creditors have also been forced to take Suzuki to court to get paid and one creditor even secured a judgment against him for over $2 million in the New York City Supreme Court in 2004. Suzuki paid the judgment off two years later. Suzuki has still managed to find the cash to donate thousands of dollars to Democratic politicians around New York over the last eight years, including $6,200 to former Bronx Borough President Fernando Ferrer, $7,450 to U.S. Rep. Gary Ackerman and $9,000 to U.S. Sen. Charles Schumer. And despite the earlier deal collapsing, a company linked to Suzuki did manage to buy six of the Ocelot buildings in May of this year, including three in Soundview that were not part of the Fannie Mae foreclosure buildings. Conditions in many of them remain appalling. Residents recently gathered in the lobby of 1585 E. 172nd St, to protest its dilapidated conditions but their meeting was interrupted by police, who were called by an employee of Suzuki's. A lawyer for Suzuki said that her client had no problem with the tenants organizing but that the Urban Homesteading Assistance Board members at the meeting were not invited and thus trespassing.
A resident of 1268 Stratford Avenue displays a live mouse caught on a glue trap. Photo by Connor Boals

A resident of 1268 Stratford Avenue displays a live mouse caught on a glue trap. Many of the low-income residents have dealt with rats, leaky ceilings and faulty wiring. Photo by Connor Boals

In another Suzuki-owned apartment building on Stratford Avenue, a family of 10 lived without heat for a year before it was only recently restored.  The superintendent at 1636 Martin Luther King, Jr. Blvd. has filed 20 complaints since September of this year, spotlighting everything from water leaks and holes in the ceiling to faulty electrical wiring. One mother in an Ocelot building at 1585 E.172 St. has to keep her infant son out of her kitchen because of rodents. "No puedo vivir con las ratas," said Ana Almonte. “I can’t live with the rats.” The Wait On Manida Street, Louise Alvarez stays put, waiting for a new landlord and hoping the nightmare may soon be over. She sleeps in her living room so her children can share the bedrooms. “We’re here struggling,” she said. “I guess I’m going to be struggling until God answers my prayers.” dbg2114@columbia.edu

How a New York real estate deal went bad causing a housing crisis for hundreds of low-income families

By Donal Griffin

Additional reporting by Matthew Huisman, Wanda Hellmund, Sarah Wali, Connor Boals and Yoav Sivan

LOUISE ALVAREZ cannot remember who used to live in the abandoned apartment in the building next to hers on Manida Street in Hunts Point. The mother of four pushed open its unlocked door one morning in October to find cooking pots caked with old food strewn among sneakers, used hoodies and open bags of trash. The stench of stale urine wafted out into the hallway.
The entrance to Manida Street buildings. Photo by Wanda Hellmund

The entrance to Manida Street buildings. Photo by Wanda Hellmund

Nearly half of the apartments in the four decrepit buildings at 621-627 Manida St in the Bronx are empty. Like Alvarez, the remaining residents live with dangerous mold, vermin and only occasional heat in apartments that suffer from varying stages of decay. Most said their apartments began crumbling around them soon after the last owner vanished nearly one year ago. Many like Alvarez cannot afford to leave.  She is asthmatic, and has arthritis in parts of her hands and hips. “I ain’t moving,” she said, “let me tell you.” A similar tale can be told by the tenants in 24 other buildings throughout the Bronx.  The aging apartment blocks have become known as “the Ocelot buildings,” named after the defunct real estate investment company that bought them between 2006 and 2007 at the peak of the housing bubble, only to abandon them in late 2008, as the market collapsed. Some news outlets have called Ocelot a “phantom” and, indeed, the company’s president could not be contacted for this article. But the consequences of a bitter row between Ocelot’s principals are very real for hundreds of families across the Bronx. Spending Spree VETERAN real estate dealer Michael Edery was part of a group in early 2005 that bought 1744 Clay Avenue and 1633 Eastburn Avenue, two low-income buildings in East Tremont. His group paid five times the rent roll for the pair of buildings, and sold them nearly two years later for $6 million, seven and a half times what the rents would yield. “The market was insane,” said Edery. “If it would have been marketed properly at the height of the market, we would have gotten eight times, eight and a half." Various entities surrounded the purchase, but Edery knew the buyer simply as Ocelot Capital Group. Ocelot appeared to have endless capital, and an endless appetite for apartment buildings in the Bronx.  Backed by a $29 million loan from Deutsche Bank (a debt it later sold to Fannie Mae), the company bought the Manida Street buildings for $7.2 million, Edery’s two buildings for $6 million and 15 more low-income properties in Morrisania, Pelham Parkway and Crotona for nearly $23 million. The Dime Savings Bank of Brooklyn then financed six more buildings in Highbridge and Soundview for $16.6 million.  In less than two years, Ocelot had bought up nearly 800 apartments all over the Bronx.
Residents of 1585 E. 172nd Street are organizing against their poor living conditions. Photo by Matthew Huisman

Residents of 1585 E. 172nd Street are organizing against their poor living conditions. Photo by Matthew Huisman

Inside Ocelot OCELOT’S president was a respected New York attorney named Rachel Arfa, a graduate of Brooklyn Law School and a member of the New York State Bar since 1979. Arfa is a former partner of an international law firm called Fried, Frank, Harris, Shriver & Jacobson and a businesswoman whose strength is her legal expertise. Arfa’s father was a Hebrew scholar called Milton Arfa, who lectured in Yeshiva University and established the Israel Matz Fund to distribute grants to indigent Hebrew authors. Rachel Arfa, who lived on Riverside Boulevard in lower Manhattan during the Ocelot episode, is now a trustee of the charity along with Shlomo Sharan, an Israeli academic based in Tel Aviv. While Arfa managed the buildings in the Bronx, the cash for this costly venture came almost entirely from an obscure Israeli company called Eldan Tech.  According to its annual report, this Tel Aviv-based investment group controlled 80 percent of Ocelot. From Tel Aviv to The Bronx Arfa had close links to the Tel Aviv business world through her husband, Alex Shpigel. In 2002, the couple had raised $40 million from a group of Israeli investors for a major purchase in Harlem and the Bronx. Shpigel provided the financial fulcrum for the deal with his network of family and personal relationships in Israel, while Arfa used her legal know-how to set up its complex structure of real estate entities. But in 2007, some of the Israeli investors filed a civil suit in Manhattan’s State Supreme Court alleging that the couple covertly siphoned off $5 million in “secret commissions” from the sellers of the properties. These commissions were then loaded onto the purchase price. According to the same court filing, Shpigel threatened to kill an associate who found out. Arfa and Shpigel have denied all the allegations, and no criminal charges have been filed against either of them. The couple filed a counter suit in the same court against a former associate, whom they blame for the much of the mess. These tangled cases provide an unfortunate warning for disasters to come.
A resident of 1268 Stratford Avenue displays a live mouse caught on a glue trap. Photo by Connor Boals

A resident of 1268 Stratford Avenue displays a live mouse caught on a glue trap. Photo by Connor Boals

The Fall BACK in the Bronx, the trouble began almost as soon as the couple sealed the deal on the Ocelot buildings. Many of their new tenants qualified for city and federal rent subsidies. This meant rent revenue alone would be too meagre to support the maintenance needs in these aging buildings. Money would have to come from elsewhere. According to the Department of Housing and Development, it never did.  Basic repairs – the responsibility of Arfa and Shpigel – ceased to take place. Thousands of official complaints flooded the city’s housing files listing everything from rat infestations to collapsing ceilings. Residents who had options began to abandon their apartments. Those who did not, endured a year and more of living in degrading conditions. The buildings racked up “immediately hazardous” violations. Six Ocelot buildings in particular ended the year on the city’s list of “most distressed.” By the end of 2008, nearly every one of the Ocelot buildings was in a state of serious decay. In response, the city’s Department of Housing Preservation and Development (HPD) took Ocelot to Bronx Housing Court in June 2008. It secured consent orders compelling the company to repair nearly 3,000 violations in six buildings and pay approximately $60,000 in fines. HPD officials claim that Ocelot never addressed the violations—the kind of negligence that could result in criminal charges. Meanwhile, in October of 2008, Eldan Tech directors decided enough was enough. They voted to bail out. By then, the property market was collapsing on a global scale. The Ocelot costs had stung the company’s bottom line. In 2008, Eldan Tech reported “heavy losses of about 53 million shekels ($14.4 million) due to its real estate activities in the Bronx.” The cost for the Ocelot residents, however, was of a different nature. Broken front doors meant drug addicts could freely roam the halls. In one building, pigeons took up residence on an abandoned baby’s crib. Louise Alvarez and her children – and many Ocelot tenants all over the Bronx – lost their heat and hot water for the winter of 2008.
A clogged bathtub in an apartment at 1640 Martin Luther King Boulevard. Photo by Matthew Huisman

A clogged bathtub in an apartment at 1640 Martin Luther King Boulevard. Photo by Matthew Huisman

Who’s to Blame? Arfa and Shpigel and their Israeli business partners are now locked in a vicious legal dispute to determine who is more culpable for this human and financial catastrophe. The Tel Aviv investors claim in their civil suit that Arfa lied about the buildings’ physical condition and financial performance and “incessantly demanded” more cash. Arfa’s lawyer, David Katz, countered that Eldan Tech failed to supply her with “millions of dollars” of needed maintenance money.   Katz also charged the Israeli company with bribing a senior Ocelot employee for confidential information about Arfa’s and Shpigel’s businesses elsewhere. The couple is now suing that ex-employee for $1 million in New York State Supreme Court.  The employee has denied the charges. “They're vindictive,” said Katz of Schlam, Stone & Dolan, referring to Eldan Tech principals. “They’re trying to avoid their responsibilities.” Enter Sam Suzuki While the legal squabble continued, Arfa began looking for a way out. Sam Suzuki, a long time property dealer based in the wealthy town of Port Washington, Long Island, emerged as a potential buyer. His company signed a no-cash deal in November 2008 and took on Ocelot’s debt with Fannie Mae. But Suzuki’s company never made any bank repayments and a lawyer for Suzuki would not explain why. This caused the deal to collapse in early 2009 and Fannie Mae foreclosed on the loans. Court-appointed receivers took over, putting most of the buildings – and their tenants – into a legal no-man’s land, where they remain today. A Fannie Mae spokesperson, Jon Searles, said that the bank is now “joining the receivers on inspections of the properties and funding much-needed safety repairs.” Such promises don’t wash with the tiny maintenance budgets that the receivers are currently struggling with. One receiver recently sought a court order to secure more cash from the bank for repairs. Searles also said that Fannie Mae is looking to sell the loan notes on the buildings to “responsible new ownership.” Who that “responsible” new owner might be, remains to be seen. Katz said that Arfa now wants the buildings sold to a non-profit, because the only parties hanging on for a for-profit deal are Eldan Tech and Fannie Mae. One of the interested parties, as it turns out, is Sam Suzuki. Financial History In 1998, a legal firm tried to force Suzuki to declare Chapter 7 bankruptcy over a disputed $77,000 debt, a debt that was settled in 2001. Other trade creditors have also been forced to take Suzuki to court to get paid and one creditor even secured a judgment against him for over $2 million in the New York City Supreme Court in 2004. Suzuki paid the judgment off two years later. Suzuki has still managed to find the cash to donate thousands of dollars to Democratic politicians around New York over the last eight years, including $6,200 to former Bronx Borough President Fernando Ferrer, $7,450 to U.S. Rep. Gary Ackerman and $9,000 to U.S. Sen. Charles Schumer. And despite the earlier deal collapsing, a company linked to Suzuki did manage to buy six of the Ocelot buildings in May of this year, including three in Soundview that were not part of the Fannie Mae foreclosure buildings. Conditions in many of them remain appalling.
Residents of 1585-1589 E. 172nd Street gather in protest against poor living conditions. Photo by Connor Boals

Residents of 1585-1589 E. 172nd Street gather in protest against poor living conditions. Photo by Connor Boals

Residents recently gathered in the lobby of 1585 E. 172nd St, to protest its dilapidated conditions but their meeting was interrupted by police, who were called by an employee of Suzuki's. A lawyer for Suzuki said that her client had no problem with the tenants organizing but that the Urban Homesteading Assistance Board members at the meeting were not invited and thus trespassing. In another Suzuki-owned apartment building on Stratford Avenue, a family of 10 lived without heat for a year before it was only recently restored.  The superintendent at 1636 Martin Luther King, Jr. Blvd. has filed 20 complaints since September of this year, spotlighting everything from water leaks and holes in the ceiling to faulty electrical wiring. One mother in an Ocelot building at 1585 E.172 St. has to keep her infant son out of her kitchen because of rodents. "No puedo vivir con las ratas," said Ana Almonte. “I can’t live with the rats.” The Wait On Manida Street, Louise Alvarez stays put, waiting for a new landlord and hoping the nightmare may soon be over. She sleeps in her living room so her children can share the bedrooms. “We’re here struggling,” she said. “I guess I’m going to be struggling until God answers my prayers.” dbg2114@columbia.edu

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