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Wednesday, April 27, 2011

Devastated Milbank Buildings Finally Sold

Speaker Christine Quinn, Mayor Bloomberg, Borough President Ruben Diaz, Sen. Gustavo Rivera and tenants celebrate the sale of the Milbank portfolio at a press conference yesterday.


It was a rare scene for the transfer of a residential apartment building: Tenants, a new landlord and a variety of city elected officials, from the mayor on down, gathered Tuesday for a press conference that turned out to be a celebration.

The now-infamous Bronx Milbank buildings, including one at 2264 Grand Avenue, were finally sold last week to a new landlord after months of local organizing and city involvement. Tenants, advocates and elected officials had fought to wrest the portfolio of 10 deeply troubled properties from irresponsible bankers and owners to a responsible party who could afford to make them livable again.

Over 100 people showed up for the announcement of the sale at 3018 Heath Ave., where the building had brand new windows -- the first of what tenants hope will be many improvements to come at this and the other Milbank properties.

"We now have someone to communicate with -- someone to hold accountable," said one tenant, Twyla Rashid, who described conditions at her building as “devastating.”

The one to hold accountable now is Steven Finkelstein, a Scarsdale-based landlord who purchased the mortgage and the deeds to the properties in a $28 million deal last week, and faces a mountain of some 4,000 housing code violations.

As part of the deal, Finkelstein promised to start making serious and immediate repairs and will have to report back regularly to the Department of Housing Preservation and Development about the work he’s done.

"Accountability, I have no problem with,” Finkelstein said, as he stood surrounded by reporters with notepads and cameras. “All the press attention, I could do without."

New landlord Steve Finkelstein (Photo: J. Moss)
Eyes will certainly be on him. For the past several months, the city had been closely watching the Milbank buildings, and the debacle spurred the a new housing initiative called the "pro-active preservation program."

The initiative, launched by HPD and largely credited to Deputy Commissioner Vito Mustaciuolo, looks to identify financially and physically distressed properties and intervene before they start to fall apart.

Bloomberg called the Milbank sale to Finkelstein the city’s "biggest achievement to date," for the new housing program, and said it could be a lesson to landlords.

"You can make money while doing it responsibly," he said.

Finkelstein owns 31 other buildings in the Bronx and says he’s been in the real estate business in the borough for over 40 years.

"I have an opportunity to [improve living conditions for people] while providing for my family," he said, when asked why he purchased the properties.

California-based group Milbank Real Estate originally bought the buildings back in 2007 with a hefty $35 million mortgage, presumably with the goal of raising rent prices to turn a profit. Milbank defaulted on the loan, however, and tenants say things started to fall apart once foreclosure began.

LNR Property LLC, the servicer to the loans attached to the buildings, had been looking to sell them since last fall. Tenants, housing advocates and elected officials tried to intervene in the sale, worried that a new buyer saddled with debt would only mean more neglect for the properties. At least one potential buyer, Chestnut Holdings, backed out after pressure from HPD and city officials.

Tenants and a number of advocacy groups, organized by the Northwest Bronx Community and Clergy Coalition, have been trying to get the buildings repaired for over a year. Last spring, Legal Services-NYC Bronx filed a motion on behalf of tenants to hold the bank that lent the mortgage, or its servicer, financially responsible for fixing the buildings, eventually succeeding when a judge ordered LNR to pay $2.5 million (a decision that LNR has since appealed).

Meanwhile, a group of tenants from another batch of foreclosed Bronx buildings -- mortgages lent by New York Community Bank -- are waging a similar campaign to hold the bank accountable for making repairs.


  1. Visit some of his other buildings in the Bronx and check out the conditions and violations. Due to this sale, new windows are being installed in all of the other buildings, and the costs will be passed onto tenants in the form of MCI increases. These tenants have no clue as to how horrible this firm is. Poorly done repairs by unlicensed workers, and a lawsuit filed by the attorney general a few years ago for unpaid overtime to workers.

  2. I agree with the above comment. I am a Realtor and I;ve seen the Finkelstein buildings. They are terrible. Additionally, you are correct in that the cost gets passed to the tenant in the form of MCI increases. However, landlords rarely charge the full legal rent. They would never be able to rent the units if they did. So the rents are lowered to a preferential rent.
    I just wonder how much HPD money, good ole Finky boy is getting to bring back the buildings to code. That's what this liberal left article won't tell you.

  3. It is interesting that Senator Gustavo Rivera is mentioned in this article, but he did absolutely nothing in this deal, while other elected who did a lot were not mentioned at all. Bad reporting.

  4. i read this three times and did not see Gustavo Raivera's name in the article. Bad reporting? Seems more like "bad commenting."

  5. North West Bronx CCC bias again from this rag.

    What a clear conflict of interests when the wife of the editor is on the board of a radical group that gets nothing but positive coverage here. What a joke.

  6. He signed an agreement to waive back rent for a majority of the tenants. Additionally, tenants who are current on their rent will not pay Major Capital Improvement (MCI) increases for two years.

  7. Why is Senator Gustavo Rivera getting any credit for this? Or any publicity? because he represents the district? So what? Like the post above stated, Senator Rivera DID ABSOLUTELY NOTHING for this to happen. AND, anyone cares to visit any of Finkelstein's other buildings? You will see for yourself that this is a short-lived "victory" (if in fact this is a victory).

  8. @anonymous and Jennie M.: Sen. Rivera is named only in the photo caption, and that's because he's in the photo. The other officials pictured are named in the caption as well. It was for identification purposes. Thanks.

  9. Anonymous @7:13: My wife was indeed on the board of the NWBCCC for many years. She's no longer on the board but still involved. Not sure what the conflict would be in this instance as everyone is on the same page on this issue -- the new landlord, the mayor, HPD, the tenants. Hard to know what your stake is when you choose to be anonymous.

  10. Maybe you should make anonymous posting illegal here. You clearly didn't have the chutzpah to do it a few months ago when a few negative commentors brought this blog to its knees and forced it to change its policies. Anonymity is the devil.

    War is peace.


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