- See more at: http://blogtimenow.com/blogging/automatically-redirect-blogger-blog-another-blog-website/#sthash.Q6qPkwFC.dpuf City Council Releases Report on Milbank's Woes | Bronx News Networkbronx

Tuesday, September 28, 2010

City Council Releases Report on Milbank's Woes

Council Speaker Christine Quinn at City Hall last week, announcing a new strategy to deal with distressed buildings like Milbank's (Photo by Jeanmarie Evelly)
Members of City Council and a number of housing advocacy groups unveiled a plan last Thursday to deal with the city's growing number of distressed, overleveraged properties--including 10 Bronx apartment buildings owned by Milbank Real Estate, which have been in worsening states of disrepair since the company went into foreclosure on the properties last year.

The program will elicit the help of pro-bono engineers and architects to assess the damage in properties like Milbank's so that tenants can have a detailed list of their building's problems, and better hold landlords accountable for making repairs.

"We believe it's important for residents to be armed, so they can advocate for their own solutions," said Andrew Reicher, executive director of the Urban Homestead Housing Board, which has been working with Milbank tenants for the past several months.

The first property survey, done by Baer Architect Group and the Northwest Bronx Community and Clergy Coalition, is a nightmarish list of 3,300 housing violations in the 10 Milbank's properties, which are scattered throughout the northwest Bronx. The study confirms what tenants have long been saying.

Complaints include leaking walls and ceilings, broken elevators, rotting floors and months without a working toilet in some apartments. It calculated that the cost of repairs for all the buildings could add up to over $24 million.

"It's reprehensible," said Charlene Barton, who lives in one of the properties at 1576 Taylor Avenue, and says she's been fighting a mold infestation for almost a year. "Why manage a building if you're not going to take care of it?"

Milbank, a California-based real estate company, bought the buildings in 2006 and 2007 during the boom times, taking out a hefty $35 million mortgage to pay for them and hoping to hike up rents to turn a profit. But when monthly income wasn't enough to cover mortgage payments--about a quarter of the portfolio's apartments are currently vacant--Milbank skimped on making repairs, then defaulted on their loan.

"These buildings are in this condition because of greedy speculation, plain and simple," said City Council Speaker Christine Quinn, who is spearheading the new effort along with Bronx Council Members Annabel Palma and Fernando Cabrera. The Milbank problem is indicative of many real estate deals across the city in recent years, which have led to a growing number of foreclosed properties in similar states of neglect.

Since going into foreclosure, Milbank's buildings have been turned over to LNR Property LLC, which is the servicer to the loan. To make things more complicated, LNR is trying to sell the portfolio to a new mystery buyer, who until now has refused to be identified, though the name is supposed to be made public this week. LNR paid Milbank off in order to make the deal, officials said.

"LNR paid Milbank $500,000 for the sale, but refuses to put any money into basic repairs," said James Jantarasami, an attorney with Legal Services-NYC Bronx, which has filed a motion on behalf of Milbank tenants to hold LNR financially responsible for fixing the properties. 

Now, Quinn and housing advocacy groups are looking to block LNR from selling the apartment buildings, arguing that the transfer will only mean more neglect for Milbank tenants. Repairing the apartments would cost nearly as much as the $35 million mortgage attached to them, they say.

"The cost of repairs would not be sustainable for a new owner saddled with debt," Jantarasami said.

The Northwest Bronx Community and Clergy Coalition sent a letter to HPD Commissioner Rafael Cestero last week, asking him to intervene and stop the deal. An HPD spokesman, however, said the agency had little power to get involved since it is a private real estate transaction.

We'll have more on the possible sale of these buildings as things develop this week.


Post a Comment

Bronx News Network reserves the right to remove comments that include personal attacks, name calling, foul language, commercial advertisements, spam, or any language that might be considered threatening, libelous or inciting hate.

User comments are reviewed by BxNN staff and may be included or excluded at our discretion.

If what you have to say is unrelated to this particular post, please visit our readers' forum.