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Wednesday, October 27, 2010

Milbank Tenants Still Waiting for Repair $; HPD Plans to Take Action

Milbank's portfolio of Bronx properties have been in varying states of decline since foreclosure started in 2009.  (File photo by Jeanmarie Evelly)
It's been nearly a month since a Bronx Supreme Court Judge ordered LNR Property Corp., the servicer that oversees a now infamous, dilapidated portfolio of foreclosed Bronx buildings, to start paying for repairs on the apartments (for some background, see herehere and here.)

But while LNR's 30-day deadline for making the payment approaches this week, they haven't put any no money into repairs so far, according to advocates working on the case.

"In a lot of ways, we're waiting, which is uncomfortable," said Dina Levy of the Urban Homesteading Assistance Board (UHAB). LNR's lawyers are preparing to appeal the judge's payment order, she said. 

LNR was told they had 30 days to fork over $2.5 million toward renovations--much less than what experts say the actual repairs will cost, but still a milestone victory for the tenants and housing advocates who had been fighting for months to get something done.

Meanwhile, a proposed deal to transfer the mortgage on ten of the properties to a mystery buyer--which Crain's identified as Riverdale-based Chestnut Holdings--has yet to close.

"The incoming buyer is now acknowlgeding that that debt level is too high," Levy said. Housing advocates and city officials warned that the buildings, which have a $35 million mortgage attached to them, are too seeped with debt and in need of expensive repairs to be profitable--much less manageable--for a new owner.

"I guess it's good news that the buyer is reconsidering its proposal," Levy added. "It's good that he's got pause now and that he's reconsidering."

Officials from HPD, which tenants and organizers have been begging to intervene in the proposed sale, met with LNR and the potential buyer two weeks ago. Spokesman Eric Bederman declined to give any details of that meeting (HPD signed a confidentiality clause with LNR), except to say that it was "productive," and it "gave us hope that we could reach a new solution" in ensuring the apartments get fixed.

Crain's reported that Council Speaker Christine Quinn and other City Council members were trying to broker a deal with LNR to get the organization to lower the debt associated with the properties, which would make it easier for a new owner to make renovations.

Quinn and HPD Commissioner Rafael Cestero have scheduled a conference call with reporters tomorrow morning to "discuss the deplorable conditions at the Milbank buildings, the need for responsible new ownership, and next steps for the distressed Bronx portfolio," according to a press release. We'll keep you posted.


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