Bronx Buildings — Symbols of Market Crash — Sold, May Actually Be Repaired
More than a thousand Bronx tenants in 10 of the city's most rundown apartment buildings got some hopeful news yesterday in the form of a new landlord who looks likely to make desperately needed repairs. In an unusual move, the city helped broker the deal.
This is at last a favorable development in the gloomy history of these buildings, which had been purchased by high-profile Los Angeles-based company Milbank (one of the Voice's 10 Worst Landlords last year) at the height of the real estate boom. When the market crashed, the buildings fell into foreclosure and further disrepair.
The city pressured the company that owned the buildings to sell them to developer Steven Finkelstein, who controls about 30 properties in the Bronx — all of which are in good condition, says city housing spokesman Eric Bederman.
Finkelstein (his company is Finkelstein Timberger LLC) has agreed to pay $27.75 million for the 10 buildings. But the city, using its agreement to help with the cost as leverage, made him sign agreements to rehabilitate them and keep them affordable for the current tenants. Finkelstein has already started making repairs, and, for a change, the city says that he — not taxpayers — are footing the bill.
The recent past of the buildings was yet another example of how the crash of the housing market directly affected not just homeowners but also renters. When Milbank, run by brothers Aaron and Solyman Yashouafar, defaulted on its $35 million mortgage, the buildings went to LNR, a Florida-based debt servicer. LNR wasn't putting enough money into the buildings, and so they rapidly fell into neglect and disrepair. (Six of the 10 were ultimately named of the city's official worst properties list). The tenants took the unusual step of taking LNR to court, and won, forcing the company to cough up more money for maintenance.
Meanwhile, the city and housing activists got involved when it was rumored that LNR was going to sell the buildings to a landlord with a poor maintenance record.
The city's taking extra care to make this deal work because the buildings have become a high-profile symbol of the city's response to the market crash, which resulted in thousands of buildings entering foreclosure.
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