The Bronx Ink

by Matthew Huisman

Four surrealist paintings hang on Luis D. Rosado’s wall in his South Bronx apartment. The sequence of paintings by Rich Rethorn depicts a horrific version of the four seasons. Skin slowly melts off a zombie’s head, eventually revealing a skull set in front of a post apocalyptic backdrop. An eyeball dangles from the skull, still connected to the socket, and stares back at the viewer.

“I wanted to put together a show that was thought provoking imagery,” Rethorn, 45, said of the paintings. “It might be disturbing to some peopl. But usually when they’re disturbed, that’s when they’re going to start to ask questions.”

The paintings were part of the November exhibit at LDR Studio Gallery, a gallery that operates out of the 28-year-old Rosado’s apartment at 134^th Street and Alexander Avenue. For Rosado, its more than just a hobby, it’s a lifestyle.

“I feel like my calling was in the South Bronx and I wanted to do my own thing,” Rosado said of his gallery. “I wanted to break all the rules. Call me crazy, but I think I’m doing it.”

Rosado’s gallery, which bears his initials, is celebrating its second anniversary in December with champagne. But before he can pop the cork on the affair, Rosado has to remove the previous month’s exhibit with help from artist and curator Rethorn.

Luis D. Rosado in his apartment art gallery on the second anniversary of the studio. Photo by Matthew Huisman

To maintain his artist’s lifestyle, Rosado holds down two jobs, runs his own architecture photography business and sleeps four hours a day. Rosado is emblematic of the diverse artistic community of the South Bronx that seeks independence from the restraints of large, corporate galleries while exploring alternative outlets for their creative energy. The South Bronx gives artists the canvas to develop their unique style and exhibit their work the way they see it.

Seven blocks north of Rosado’s apartment gallery is another apartment-turned-gallery, the Bronx Blue Bedroom Project, started two years ago by Blanka Amezkua. Born in Mexico and raised in California, Amezkua left the Golden State five years ago for the Bronx.

Amezkua’s idea for the Bronx Blue Bedroom Project was a creative reaction to the emotions she felt after losing her nephew in a car crash in 2006. Amezkua took the death hard since she had never before experienced losing a loved-one who was so dear to her. A year later Amezkua painted her Mott Haven bedroom robin’s-egg blue and thus was born the Blue Bedroom Project.

“In retrospect, that was part of my healing,” Amezkua said. “It was an opening up of the most intimate space in my apartment.” Amezkua now lives with her husband in Queens and makes the daily commute to her studio where she once lived.

Amezkua has invited Bronx artists like Laura Napier and Matthew Burkaw, whom she met through Artists in the Marketplace, a program run by the Bronx Museum of the Arts that provides artists with practical knowledge, to be part of her project. December’s artist is Napier and she is planning a bit of trickery for gallery-goers.

Artist Laura Napier shows off her exhibit at the Bronx Blue Bedroom Project. Photo by Matthew Huisman

Two floors above Amezkua’s blue bedroom, Napier is running a cable from her fifth floor bedroom window down the front of the building to Amezkua’s gallery. The wire carries a live feed of Napier’s bedroom – identical in size, shape and painted to match the original blue bedroom – to be transmitted on a television inside Amezkua’s gallery. The bedroom door in the gallery will be closed with a sign posted that asks guests to keep the door closed. Patrons will be able to watch what’s happening on the other side of the bedroom door on the television, or so they think.

“The idea is if people go in there and people are expecting to see themselves on the screen, they won’t,” Napier said of the exhibit. “I’m really interested to see how people behave.”

Napier is using her lunch break from her job at the Bronx Council for the Arts to set up her upcoming December exhibit in the Bronx Blue Bedroom Project. The blue bedroom serves as a place where artists and the community interact and share art.

The South Bronx has a long artistic history dating back to the 70’s when Stefan Eins founded Fashion Moda, a storefront art studio and melting pot where artists and the neighborhood mingled.

“There was hip hop, there was break-dancing, there was dj-ing and there was graffiti,” said Lisa Kahane, a photographer who documented the Bronx during the 70’s. “What happened at Moda was these people met with artists from downtown, so there was definitely a cross pollination of different art forms.”

While The Bronx was experimenting with Fashion Moda, SoHo was becoming a booming art scene where galleries lined the blocks south of Houston Street. The same happened in Chelsea, as philanthropists poured more money into the Manhattan art scene.

“So you walk around and there are all these galleries all in one place,” Kahane said. “That was the accepted art neighborhood.”

When rent in Manhattan increased, artists sought out cheaper living accommodations and more space in the outer boroughs. Places like Williamsburg and Greenpoint in Brooklyn have seen an influx in artists who are gentrifying the communities they occupy. However, the art scene in the South Bronx, though, has never been able to grow quite as fast.

“It’s up and coming but it’s taking its time,” Rosado said of the South Bronx art scene. Along with the tight-knit artistic community comes freedom from the corporate strings–a big selling point for Rosado.

“I just never really liked the fact that you had to pretty much be a prostitute to galleries about your art and yourself,” Rosado said. “I’m not dogging Chelsea. It’s just that I don’t like the attitude within that art world. I know that eventually I would like to show in Chelsea, but I don’t like the fact that it’s become so corporate. They start forgetting about the art itself and it’s all about business.”

LDR Studio Gallery celebrated its second anniversary with champagne. Photo by Matthew Huisman

For Amezkua the stigma that surrounds The Bronx started in the 70’s with the housing crisis and more recently the violence that plagued the borough in the 90’s. This has left the South Bronx with a reputation as an uncultured void in the city.

“It’s a very different thing when you say Bronx or when you say Williamsburg or Chelsea,” Amezkua said. “The Bronx is viewed as the ugly duckling of New York.” She did, however, praise the borough’s diversity. “When you come from a place that is not as diverse, and you land in The Bronx, you see the richness of the culture. It’s mindboggling.”

The downside to keeping corporate money at bay, is that the South Bronx art movement has never gained enough momentum to pull in outside investors.

“It’s like pulling teeth,” said Barry Kostrinsky, a 25-year veteran of the South Bronx art scene. “There are a lot of artists who do their own thing. Everyone has so many things going on in their life.”

Since the 80’s Kostrinsky has been creating art, everything from oil landscapes to acrylic on found objects. He said that art is about self expression and being socially aware at the same time.

“Art is about blasting parameters,” Kostrinsky said. “If you draw on garbage, you put it in perspective. It’s not the Mona-fucking-Lisa, it’s very real.”

It’s opening night for Rosado’s gallery and he is popping another bottle of champagne for his guests. He smiles as he refills empty glasses and begins to take another stroll through the exhibit.

“I like the fact that I am an underground gallery,” Rosado said. “I wake up in the morning and I eat art. I breathe art. I see art. It’s just all over.”

Rosado and Amzekua have maintained their independence from corporate art galleries, deciding instead to go it alone financially. Their reward is the ability to showcase local art that is free and open to the community while exploring the limits of their own creativity.

“Everybody leaves and I just sit down on the floor, pop a bottle of champagne,” Rosado said, “and just look at the artwork one by one.”

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.

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.

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.

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 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

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.”

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.

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

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.

= Ocelot buildings currently in foreclosure. On Dec. 1, 2009, Fannie Mae sold the debt to Omni New York LLC.

806 E. 175th St. 1528 Bryant Ave. 1744 Clay Ave. 2254 Crotona Ave. 1663 Eastburn Ave. 1512-1524 Leland Ave. 621-627 Manida St. 1269-1271 Morris Ave. 1804 Weeks Avenue

= Ocelot buildings sold to BXP 1LLC on May 13, 2009. The buildings are managed by Hunter Property Management LLC.

1585-1589 E. 172nd St. 1350 Martin Luther King, Jr. Blvd 1636-1640 Martin Luther King, Jr. Blvd 1268 Stratford Avenue

= Ocelot buildings sold to Bronx Apartments LLC on Aug. 26, 2009.

422 East 178th St. 4289,4301,4305 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.”

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.

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

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.

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. 172^nd 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. 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

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

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

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

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 recently gathered in the lobby of 1585 E. 172^nd 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

by Matthew Huisman

Medardo Florencio of Taqueria Guadalupe cooks up tacos for residents living in Soundview. Photo by Matthew Huisman

It’s lunchtime on Westchester Avenue in the Bronx and my stomatch growls, reminding me that I haven’t eaten since 9 a.m.  Instead of grabbing a greasy slice of pizza, or stopping in at one of the many fast food joints that litter the area, I opt instead for Taqueria Guadalupe.

The chrome taco truck sits where Manor and Westchester Avenues meet, a shining, silver oasis of food. Medardo Florencio–owner, chef and cashier–greets me at the window. There is no table, no cash register, no building–only Florencio’s truck converted into a mobile kitchen. The sole concessions to traditional dining are two lonely chairs leaning against the brick wall of D&G Fashions, a store that sells ladies wear and plus sizes.

Florencio didn’t ask what I’m ordering, only how many.

“Tres, por favor,” I said, as I was feeling particularly hungry.

Florencio immediately goes to work, dicing onion and pineapple. Together with a fistful of flavored pork, Florencio tosses the mixture on the grill. The meat sizzles, wafting the smell of al pastor tacos to the street curb. The reaction causes my mouth to water like one of Pavlov’s dogs. By this time I am not alone.

Jenny Cosme walks up to the window, glancess briefly at the menu and orders one bistec and one chicken taco and waits patiently.

“Their food is good, and it’s healthy too,” says Cosme. “It’s healthier than the fast food because it’s on a grill.”

Cosme likes crema y pico de gallo, a mixture of raw onion, tomato and cilantro, on her tacos.

“They cut everything daily,” Coseme said while piling on the pico.

Taqueria Guadalupe at the corner of Manor and Westchester Avenues in Soundview. Photo by Matthew Huisman

Florencio has been feeding his hungry neighbors in the Soundview neighborhood for more than seven years. He arrived in this country 20 years ago from Guerrero, a state in southwest Mexico known for its tourism and silver. Florencio says he has about 80 customers a day, enough to support his wife and four kids. A fifth is on the way.

But on the streets of the Bronx, where good, cheap and healthy food can be as scarce as a Phillies fan, Taqueria Guadalupe is one of the few places that offer a healthier alternative.

“It’s all fresh,” Florencio says in Spanish pointing to a tray of toppings. “We make it fresh every day.”

Spicy red salsa, avacado puree, pico de gallo and fresh lime are a few of the extras that Florencio offers his customers.

In a few minutes my order is up. I pay the $7.50 and walk back to the chairs. Steam rises from the plate in the cold air. The first bite is packed with pineapple. The sweet juice runs down my chin and I lap it up with a lick of my tongue.

“No sense in being proper when you’re on the sidewalk,” I muse, plowing through the first taco.

I had no problem with the second and third. The spicy pork, tangy lime and crisp onion make a heavenly treat wrapped in two corn tortillas.

Sidewalk dining at its finest.

Bloomberg gives his victory speech at midnight, after a very close election. Photo by Leslie Minora

by Leslie Minora and Matthew Huisman

Mayor Michael Bloomberg celebrated a surprisingly close win over his rival William Thompson for a third term Tuesday night at the lavish Metropolitan Ballroom of the Sheraton Hotel in midtown Manhattan.

Bloomberg narrowly edged out Thompson by only 50,000 votes, with more votes going to his challenger than polls had predicted. Unofficial results showed the mayor won by a 51 to 46 percent margin, with a light turnout of more than 1.1 million New Yorkers going to the polls.

In his victory speech, Bloomberg tried to put uncertain voters’ minds at ease. “Conventional wisdom says that historically third terms haven’t been too successful,” Bloomberg said from the ballroom stage. “We’ve spent the past eight years defying conventional wisdom.”

He added, “If you think you’ve seen progress over the past eight years, I’ve got news for you. You ain’t seen nothing yet.”

The mayoral victory party was a carefully choreographed and obviously expensive event at the Sheraton on 53rd Street and Seventh Avenue, an appropriate finale to his record $90 million bid for re-election.

Waiters in starchy suits served mini-burgers, mini-hot dogs, and chicken fingers on silver platters, while the open bar kept the guests supplied with Brooklyn Lager—all in keeping with the New York food theme. There was even Amstel Light for the financial investment crowd and mini-veggie burgers for the non-meat eaters. It was a people-pleasing event that catered to a crowd very diverse in age, background, and profession.

One retired construction worker originally from Ecuador, Alberto Pedro Savinovich, 86, who has worked for all three of the Bloomberg campaigns, said this party was the nicest of all.

Bloomberg supporters chanted "four more years" throughout the night. Photo by Leslie Minora

The ballroom walls were covered in blue with star shapes reflected by lighting. Accents of red and white completed the patriotic theme. Jumbo screens in each corner set on a loop showing Bloomberg high-fiving and smiling at people of all colors, shapes, and sizes. New Yorkers filled the soccer field-sized room as a full band played crowd favorites like “Celebration” and “We Are Family”.

Speakers took the stage periodically, drawing larger and larger crowds as the evening progressed. Like fans waiting for the headliner of a concert, supporters anxiously awaited the arrival of their rock-star mayor. Positions near the lectern were highly coveted by both press and party-goers. Elbows were thrown and spots were saved as the night drew on.

At about midnight, Jimmy Fallon, host of “Late Night,” introduced the newly reelected mayor to screaming supporters. In his 20-minute speech, Bloomberg promised to create more jobs and small businesses, improve schools and make New York City more environmentally friendly. Bloomberg also said that while the entire country is suffering from the recession, New York City is doing its best to recover quickly.

“We have come so far in these past years by staying united, and that’s how we’ll climb out of this national recession–together,” Bloomberg said.

“I think he’s a uniter, not a divider, said Scott Weinberg, 28, who is a bus boy and a registered Democrat. “This is the guy that’s really going to bring the city together.”

Throughout the party, supporters stressed their personal reasons for attending. “For right now, he has proven that he is the best man for the job,” said Carmel Geoghean, 27, who works in advertising. “He knows what New York needs.”

One Bloomberg supporter summed up the celebration: “This is probably the hottest party in New York City tonight,” said Mark Robinson, 45, a campaign volunteer.