No Longer Majority Black, Harlem Is in Transition

Ozier Muhammad/The New York Times

Joshua S. Bauchner, with his 2-year-old daughter, Evlalia, moved to Harlem in 2007. “In Manhattan, there are only so many directions you can go,” he said.

By SAM ROBERTS

Published: January 5, 2010

For nearly a century, Harlem has been synonymous with black urban America. Given its magnetic and growing appeal to younger black professionals and its historic residential enclaves and cultural institutions, the neighborhood’s reputation as the capital of black America seems unlikely to change soon.

Multimedia

Graphic

A Shifting Population

Enlarge This Image

Ozier Muhammad/The New York Times

“I feel a community here that I don't feel in other parts of the city,” said Laura Murray, a student.

Readers' Comments

Readers shared their thoughts on this article.

• Read All Comments (163) »

But the neighborhood is in the midst of a profound and accelerating shift. In greater Harlem, which runs river to river, and from East 96th Street and West 106th Street to West 155th Street, blacks are no longer a majority of the population — a shift that actually occurred a decade ago, but was largely overlooked.

By 2008, their share had declined to 4 in 10 residents. Since 2000, central Harlem’s population has grown more than in any other decade since the 1940s, to 126,000 from 109,000, but its black population — about 77,000 in central Harlem and about twice that in greater Harlem — is smaller than at any time since the 1920s.

In 2008, 22 percent of the white households in Harlem had moved to their present homes within the previous year. By comparison, only 7 percent of the black households had.

“It was a combination of location and affordability,” said Laura Murray, a 31-year-old graduate student in medical anthropology at Columbia, who moved to Sugar Hill near City College about a year ago. “I feel a community here that I don’t feel in other parts of the city.”

Change has been even more pronounced in the narrow north-south corridor defined as central Harlem, which planners roughly define as north of 110th Street between Fifth and St. Nicholas Avenues.

There, blacks account for 6 in 10 residents, but those born in the United States make up barely half of all residents. Since 2000, the proportion of whites living there has more than doubled, to more than one in 10 residents — the highest since the 1940s. The Hispanic population, which was concentrated in East Harlem, is now at an all-time high in central Harlem, up 27 percent since 2000.

Harlem, said Michael Henry Adams, a historian of the neighborhood and a resident, “is poised again at a point of pivotal transition.”

Harlem is hardly the only ethnic neighborhood to have metamorphosed because of inroads by housing pioneers seeking bargains and more space — Little Italy, for instance, has been largely gobbled up by immigrants expanding the boundaries of Chinatown and by creeping gentrification from SoHo. But Harlem has evolved uniquely.

Because so much of the community was devastated by demolition for urban renewal, arson and abandonment beginning in the 1960s, many newcomers have not so much dislodged existing residents as succeeded them. In the 1970s alone, the black population of central Harlem declined by more than 30 percent.

“This place was vacated,” said Howard Dodson, director of Harlem’s Schomburg Center for Research in Black Culture. “Gentrification is about displacement.”

Meanwhile, the influx of non-Hispanic whites has escalated. The 1990 census counted only 672 whites in central Harlem. By 2000, there were 2,200. The latest count, in 2008, recorded nearly 13,800.

“There’s a lot of new housing to allow people to come into the area without displacing people there,” said Joshua S. Bauchner, who moved to a Harlem town house in 2007 and is the only white member of Community Board 10 in central Harlem. “In Manhattan, there are only so many directions you can go. North to Harlem is one of the last options.”

In 1910, blacks constituted about 10 percent of central Harlem’s population. By 1930, the beginnings of the great migration from the South and the influx from downtown Manhattan neighborhoods where blacks were feeling less welcome transformed them into a 70 percent majority. Their share of the population (98 percent) and total numbers (233,000) peaked in 1950.

In 2008, according to the census, the 77,000 blacks in central Harlem amounted to 62 percent of the population.

The number of blacks living in greater Harlem hit a high of 341,000 in 1950, but their share of the population didn’t peak until 1970, when they made up 64 percent of the residents. In 2008, there were 153,000 blacks in greater Harlem, and they made up 41 percent of the population.

About 15 percent of Harlem’s black population is foreign-born, mostly from the Caribbean, with a growing number from Africa.

Some experts say the decline in the black population may be overstated because poorer people are typically undercounted by the census, and Harlem has a disproportionate number of poor people. Others warn that proposed development and higher property values may force poor people out, and they say that when the city was the neighborhood’s leading landlord it should have increased ownership opportunities for Harlem residents .

“Gentrification — the buying up and rehabilitation of land and buildings, whether by families or developers, occupied or abandoned — means a rising rent tide for all, leading inevitably to displacement next door, down the block, or two streets away,” said Neil Smith, director of the Center for Place, Culture and Politics at the City University of New York Graduate Center.

Mr. Dodson of the Schomburg Center moved from Riverside Drive to Newark not long ago. He said, “I tell people that I can’t afford to live in Harlem or in New York in the manner I deserve to.”

Other analysts point to the outflow of some blacks and the influx of others as positive evidence that barriers to integration have fallen in other neighborhoods and that Harlem has become a more attractive place to live.

“It’s a mistake to see this only as a story of racial change,” said Scott M. Stringer, the Manhattan borough president. “What’s interesting is that many African-Americans are living in Harlem by choice, not necessity.”

Andrew A. Beveridge, a sociologist at Queens College, said, “Harlem has become as it was in the early 1930s — a predominantly black neighborhood, but with other groups living there as well.”

Ronald Copney, a former limousine driver, and his two sisters share a brownstone on West 147th Street that his grandmother bought in 1929. He rents two floors to tenants, one of whom is white.

“This was always a very nice neighborhood,” he said. “In a way, it’s better now as far as property values are concerned.”

Geneva Bain, the district manager of Community Board 10, blamed the economy and the lack of jobs for the dwindling number of blacks.

She acknowledged, though, that white newcomers have sometimes been greeted ambivalently. “Integration is very subjective,” Ms. Bain said. “One person’s fellowship is another person’s antagonism. I am one who thinks that central Harlem has become a better place because of integration.”

Mr. Dodson, the Schomburg Center director, said one source of historic resentment remained: that blacks still accounted for a tiny minority of the area’s property owners.

“There are people who would like to maintain Harlem as a ‘black enclave,’ but the only way to do that is to own it,” Mr. Dodson said. “That having been said, you can’t have it both ways: You can’t on the one hand say you oppose being discriminated against by others who prevent you from living where you want to, and say out of the other side of your mouth that nobody but black people can live in Harlem.”

“The question of whether it’s a good thing or not,” he added. “I honestly can’t make that judgment yet.”

http://www.nytimes.com/2010/01/06/nyregion/06harlem.html?_r=1&em=&pagewanted=all

Predatory Equity: Evolution of a Crisis-The threat to New York’s affordable rental housing: 2005-2009

Predatory Equity:Evolution of a Crisis- The threat to New York’s affordable rental housing:2005-2009

http://www.anhd.org/resources/Predatory_Equity-Evolution_of_a_Crisis_Report.pdf

When Wall St. Comes To 139th St., Tenants Worry

Rent-stabilized residential apartments are a relatively new element in the portfolio of big-money investors. Public records reveal what happens when their returns are pushed as hard as energy and tech investments.

By Adam Pincus

Monday, Sep 10, 2007

Harlem — The river of money coursing through Wall Street that’s made common coin of terms like “hedge fund” and "private equity" keeps pooling into one of the newer outlets for investment: New York City’s rent-stabilized residential real estate.

Traditionally the province of private owners, rent-stabilized apartments – which account for two-thirds of the city’s 2 million rental units – are attracting the dollars of high-powered money managers of all stripes. The accompanying demand for high returns has some affordable-housing advocates worried about greater pressures to raise rents and revved-up loss of affordable housing – and strategizing about how tenants can fight back.

“We have seen an explosion of very, very aggressive tactics in these large blocks of buildings that have been purchased by private equity-backed financiers. That’s very bad news for affordable housing in New York City,” says Benjamin Dulchin, deputy director of the Association for Neighborhood and Housing Development. “There’s too much money out there, to tell you the truth. Wall Street has found a sleepy corner of the market, and it’s chewing it up.”

Tishman Speyer’s landmark purchase of rent-stabilized Stuyvesant Town and Peter Cooper Village last year for $5.4 billion is the marquee example. There’s also the $1 billion in residential real estate bought over the last few years by the Pinnacle Group, which was sued by nine individual tenants and a Harlem community group in July for allegedly harassing lower-rent tenants. Pinnacle is backed by the Praedium Group, a real estate investor “focusing on underperforming and undervalued assets throughout North America,” according to its website. On a smaller scale, firms such as Taconic Investment Partners, SG2 Properties and Apollo Real Estate Advisors have purchased thousands of units in Queens, Brooklyn, the Bronx and upper Manhattan.

The terms of some deals are revealed through financial documents filed with the federal Securities and Exchange Commission, providing a window into expectations of income growth in rent-stabilized buildings. In fact, the filings relating to a deal by one of the more aggressive players in New York, Vantage Properties LLC – which was formed in late 2005 and often obtains financing through Apollo Real Estate Advisors – demonstrate how one group of properties is expected to double its current rent yield in under a decade.

Vantage Properties owns or manages some 7,000 units in the city. The company’s first major purchase was Delano Village in Harlem, renamed Savoy Park after the acquisition. It is a 1,802-unit apartment complex built in the late 1950s and bought in March 2006 for a reported $175 million. The seven buildings (15 and 45 West 139th St.; 30 West 141st. St.; 60 West 142nd St.; 2300 Fifth Ave. and 620 and 630 Lenox Ave.) occupy a city block on the former site of Harlem’s famed Savoy Ballroom.

In early 2007 the buyers refinanced their 2006 loan of $165 million to $210 million, reserving as much as $42 million for improvements to the property, according to the prospectus from financier Credit Suisse First Boston. The refinancing was in addition to $157 million secured in mezzanine financing, a common borrowing tool used to obtain cash, often at a higher interest rate.

The prospectus outlines an aggressive plan to increase profitability for the building, hiking net operating income from the 2006 level of $7.7 million to $19.5 million. A target date was not given to hit the higher figure, but analysts said it was likely to be in seven years, at the maturity of the loan.

The owners “plan to improve the [property’s] performance by making capital improvements to individual units and raising rents to market levels,” the filing said.
That means taking rents hovering at about $700 for studios and $850 for one- and two-bedroom units and more than doubling them over several years to as much as $2,300 for a two-bedroom, the prospectus said.

Others in the real estate industry see such housing as a strong asset. David Eyzenberg is president of the investment banking firm Prodigious Capital Group, which provides financing to developers. Although not involved in the Harlem property sale, he considers multi-family buildings in working-class neighborhoods a solid investment even as prices are rising. “This is recession-proof. I don’t care what happens, the blue-collar people have to [live] somewhere,” Eyzenberg said.

Michael Slattery, senior vice president for the Real Estate Board of New York, the industry trade group, said investing in older buildings improves the quality of the apartments, creates jobs and adds to the city’s tax base. He said rent-stabilized apartments could not be taken to market rents either outside the law or beyond local demand. “They can’t operate above the market. If they are too aggressive they will lose tenants, and that is a hit on their return,” he said.

In central Harlem in particular, says Corcoran Group senior associate David Daniels, the market is strong and the rents investors hope to get – around $1,200 for a one-bedroom – are on the mark. “The availability of rentals is very limited, so anything that comes on (the market) is going to be rented,” Daniels said.

Eyzenberg said in general new owners can decide how quickly they'll try to get to market rents. "How aggressive will I be? Some are more aggressive than others. The math is not different, only how quickly will I get there,” he said.

Paths management can take toward raising the development’s income include managing the building more efficiently; imposing a 17 to 20 percent post-vacancy increase; adding 2.5 percent of the cost of improvements to the rent; and imposing the city-regulated maximum increase of 5.75 percent for a two-year lease.

Management plans to spend $36,000 on renovations per vacant unit, the prospectus said, which would allow them to add $900 per month for the improvements.

Rent hikes like that make tenant advocates skeptical of the infusion of Wall Street money as a positive force that will primarily bring needed improvements to multi-family housing stock. Dulchin of ANHD, for example, said as the owners seek to make their financial goals in the Harlem complex there will be a loss of affordable rentals. "Clearly we see that in Savoy Park the landlord appears to be engaging in a very aggressive strategy to push out low-paying tenants," he said.

At Savoy, tenants say Vantage Properties subsidiary Vantage Management Services LLC has been alleging that the leases written by the prior owner were below what could legally be charged, an arrangement known as a preferential rent. Over the past six months, Vantage Management has notified scores of tenants that new leases would be based on the legal maximum rent, which in some instances is hundreds more, said housing attorney David Hershey-Webb.

But Hershey-Webb, a partner of the law firm Himmelstein McConnell Gribben Donoghue & Joseph, says the owner can't base a rent increase on the legal maximum because most tenants were never told they were getting a "preferential rent" in the first place. Hershey-Webb has reviewed about 40 leases and is representing 12 tenants against the buildings’ owners in Harlem Housing Court. He has won one case, but dozens remain unresolved.

A more common avenue building owners use to move tenants out is to verify that the individual named on the lease is the same person living in the unit, called a non-primary tenant case. If a landlord can prove a tenant lives most of the time elsewhere, the landlord has no obligation to renew the lease.

Savoy Park tenant association president Valerie Orridge claims that dozens of tenants have received letters alleging the resident is not the lessee. James Drayton, for example, who has lived at Savoy Park for 36 of his 70 years and pays $506 per month for a one-bedroom, says he received notification this spring that Vantage Management would not renew his lease because he actually lived one block away. "I live with my wife... I am home every night and every day. When I got that letter, I had to think: Who would do that to me?" said Drayton, who eventually persuaded the company that he is the primary tenant.

Vantage Properties president and chief executive officer Neil Rubler said his company provides rent protection to tenants, as well as reserving the right to remove tenants that are living illegally in their buildings. In an e-mail from Rubler's representative, Rubenstein Communications, he said, "Our philosophy as new owners is to make long-term investments in the overall quality of our properties, from security and landscaping to structural and unit improvements, in order to create both a more desirable environment for current residents and demand among prospective residents. It’s our guiding principle and we apply it across all of our properties – those with substantial leverage and those that have no leverage at all." Rubenstein declined to have Rubler address the situation with any more detail or specificity.

But Dulchin said the situation cries out for tenant organizing, and his group is working to determine what can be done. He expects outreach to begin this fall.

The efforts to remove tenants have grabbed the attention of lawmakers. City Council Speaker Christine Quinn is working on legislation that would allow tenants to bring legal action against landlords they accuse of a pattern of harassment.

State Sen. Bill Perkins, a Democrat representing Harlem, said he had been receiving calls from tenants and tenant leaders expressing anger about the tactics being used to move residents out.

"We are looking into legal ways to protect the affordability of the development as well as to protect those individuals who are being forced into court or out of their homes," Perkins said.

- Adam Pincus

http://www.citylimits.org/news/articles/3402/when-wall-st-comes-to

The Pinnacle Group: Owner Joel Weiner is a Wiener.

The Pinnacle Group is very similar to the (Oheb)Shalom family, except that this post doesn’t start out with a song. It’s a family-owned business, currently owned by 3rd generation Joel Weiner, who’s very obviously a wiener. The Pinnacle Group owns over 20,000 rent-stabilized units that cost around $500 a month, but they evict the tenants, do a quick remodel, and then rent it out for $1500-$1700 a pop. In the last few years, they have tried to evict ¼ of their tenants for no real reason and have had 5,000 eviction proceedings in various housing courts.

From The New York Times:

“When you are trying to evict one out of four tenants, that is what lawyers call prima facie evidence,” Congressman Rangel said. “It is something that screams out for a criminal or civil or legal remedy.”
They rarely win in court, and that’s partially because they “accidentally” charge their tenants for a lot of extra things that they obviously didn’t use in that apartment (unless it was a really, really […really, really, really…] big apartment):

When they examined Pinnacle’s invoices for the work done on [one] apartment… they found that the company had included charges for 160 light bulbs, 75 pounds of grout, 130 gallons of paint, a $198 nail gun and a $424 drain cleaning device. They also found that some items listed as installed were not there, including oak flooring and a pedestal sink.
Unless Pinnacle was giving this tenant their own building all to themselves, then they screwed up big time. They have also charged other tenants $1000 for 100 gallons of paint, 5 toilets for a 2 bathroom apartment, and other outrageous amounts of supplies, which basically means that they’re building all of their evicted tenants large castles. At least I hope. Residents have also said that they have been charged for new front doors that were installed years before they moved in.

You would hope that Pinnacle wouldn’t overcharge people and spend most of their money in housing courts so that they could fix building violations, like a building that went on fire one Father’s Day several years ago and was never fixed. But no. Instead:
Statements from tenants at properties owned by Pinnacle… detail what they call constant harassment: allegedly discriminating against Latino tenants; invasion of privacy; alleged mail theft to facilitate bogus court proceeding; and sustaining second-degree burns from a radiator explosion – the alleged result of long-standing need for repair.

This is just the tip of the iceberg with this shitty management company. Read the articles at The New York Times, The Real Deal, and Indy Press NY, and also check out BRUSH’s website. When apartment hunting, make sure that these guys are not the management, and always look at your bill for what you’re being charged for.

List of 12 of NYC's Landlords

By Justin Rocket Silvermanam NewYork Staff Writer

The 'Dirty Dozen' list provided by the Association for Neighborhood and Housing Development:

Mt. Eden, the Bronx: Jacob Finkelstein for not fixing leaks at 105 E. Clark Place

Washington Heights: Joel Weiner of The Pinnacle Group LLC, which is said to have begun legal proceedings against 5,000 tenants

Central Brooklyn: John Tsevelos of G-Way Management

West Side Manhattan: Jay Podolsky for harassing tenants at SRO hotels-

Lower East Side: Nathan Shuchat at 141 Ridge Street

Williamsburg: Adam Mermelstein and TreeTop Development LLC

Queens:George Subraj for his many buildings in the Jamacia area.

Bushwick: David Melendez is said to have more than 673 open building code violations-

Harlem: Joel Weiner of The Pinnacle Group LLC

South Bronx: Doug Peterson of NYC Capital Value Fund II LLC for pressuring Section 8 tenants to move out

Chinatown: Benjamin Shaoul for bringing frivolous lawsuits

South Brooklyn: Julia and Carlos Guzman for harassing tenants at 268 Dean Street

Lawsuit against Pinnacle announced

THE REAL DEAL

By Jen Benepe

Scott Stringer A lawsuit was filed in federal court today against mega-landlord Pinnacle Group and its principal, Joel Wiener, for allegedly fraudulently inflating rents, failing to make needed repairs, and groundlessly harassing tenants as "part of a coordinated business strategy to boost profits and drive middle-income tenants from their apartments," according to statements.

The lawsuit was announced in a press conference held by Public Advocate Betsy Gotbaum and Manhattan Borough President Scott Stringer. Weiner and his company have come under increasing criticism since buying an estimated $1 billion in distressed buildings in Upper Manhattan and parts of the Bronx over the past few years. In its biggest buy, Pinnacle purchased 104 properties from landlord Baruch Singer in 2005 for more than $500 million.

The suit alleges that Pinnacle is trying to drive out many tenants and is subjecting some of them to unnecessary legal machinations. "I have never seen the mere mention of a landlord create so much fear," said Stringer. "Pinnacle is simply a code word for mass eviction." Stringer said his and Gotbaum's offices had met with Pinnacle and spent many hours trying to negotiate a way that tenants could effectively deal with the legal notices that would not require them to miss work for long stretches of time and hire lawyers. "Our attempts to sit down with Pinnacle have not borne fruit, however," said Stringer. "

A federal lawsuit will be a dose of reality and give them a taste of their own medicine."The suit alleges that Pinnacle has broken federal racketeering laws by utilizing the mail and electronic means to send fraudulent requests for rent; that the landlord has misrepresented the minimum amount of rent due; and that Pinnacle has made false statements about repairs that were made, said the lead counsel on the case, Richard Levy, whose firm is representing tenants in the action pro bono after being contacted by Gotbaum. In statements to the press, Levy characterized Pinnacle's actions as tantamount to a "scheme" to defraud tenants on a grand scale. He also said that Pinnacle has allegedly engaged in "a general practice of deceiving the tenants for the purposes of getting people out of rent control, getting people to the point where the [apartments] could be converted to condominiums."

Ken Fisher, a spokesperson and legal representative for Pinnacle, said they had not even received a copy of the filing when the public announcement of the lawsuit was made. "The lawsuit appears to have been instigated by a woman whose mother was arrested for vandalizing an elevator in an Pinnacle building and with whom we are currently in litigation," said Fisher, referring to one of the plaintiffs, Kim Powell, whose mother allegedly vandalized an elevator on Pinnacle property."We are confident that this lawsuit, which was released to the press before being served on us, will be found to be without merit," said Fisher. He also noted that his office and Pinnacle had been in negotiations with Kim Powell and her lawyers, and that the last he knew, his firm had sent a proposal over to Powell's lawyer's offices two weeks ago."We thought we had provided a reasonable basis for solving the legitimate issues, and they filed a lawsuit without telling us that those discussions had ended," he added.

http://www.therealdeal.net/breaking_news/2007/07/11/1184190588.php

'SLUM BUM' HIT WITH RICO SUIT

By TOM TOPOUSIS- NY Post

July 12, 2007 -- One of the city's largest landlords was slapped yesterday with a federal racketeering lawsuit, claiming the company is waging "an attack" on affordable housing with thousands of illegal evictions aimed at jacking up rents beyond what the law allows.

The RICO lawsuit, filed by a group of tenants, accuses the Pinnacle Group and its chief officer, Joel Wiener, of "corporate slumlording" by hiring a legion of lawyers, who turned out more than 5,000 eviction notices in just over two years.
"This is not another case of landlords' penny-pinching," said lawyer Richard Levy, of Jenner & Block, the firm representing the tenants.
"This corporation has made what can be called an attack on affordable housing."
Pinnacle owns 420 buildings, mostly in upper Manhattan and parts of The Bronx, with 21,000 apartments.
Levy said Pinnacle, and its financing partner, the Praedium Group, have targeted "undervalued" buildings with high concentrations of rent-stabilized apartments. The suit under the Racketeer Influenced and Corrupt Organizations Act accuses Pinnacle of using illegal tactics to evict tenants in order to jack up rents.

The lawsuit has the backing of Public Advocate Betsy Gotbaum and Manhattan Borough President Scott Stringer, both of whom joined a press conference by telephone yesterday to announce the action filed in federal court.
Gotbaum said Pinnacle is waging "a coordinated plan to harass tenants and then flip the apartments at market rate."
Pinnacle spokesman Kenneth Fisher called the claims "nonsense." He said the lawsuit was "instigated by a woman whose mother was arrested for vandalizing an elevator in a Pinnacle building and with whom we are currently in litigation."

Fisher said Pinnacle has acted legally and has not filed more eviction notices than is common among city landlords.
"Pinnacle is proud of its record of providing safe and affordable housing for thousands of New York families, and we are confident that this lawsuit . . . will be found to be without merit," Fisher said.
Levy said that in addition to the eviction strategy, Pinnacle has vastly inflated costs of repairs and improvements at its buildings in order to justify huge rent increases.

Andreas Mares-Muro, a tenant in a Pinnacle-owned building on Riverside Drive and 141st Street, said the rent on his apartment was raised prior to his moving in from $648 to $1,275, which violated rent-stabilization laws.
Pinnacle bought the building in 2005 but has refused to correct the rent overcharges, said Mares-Muro, one of the tenants bringing suit.
tom.topousis@nypost.com

In Suit Against Landlord, Tenants Make Unusual Accusation: Racketeering

By TIMOTHY WILLIAMSPublished: July 12, 2007

3Joel Weiner , one of the city's most notorious slumlords, was accused in a Manhattan Federal Court lawsuit yesterday of fraud and racketeering.

A group of tenants filed a federal racketeering lawsuit against one of the city’s fastest-growing residential landlords yesterday, accusing it of harassment, fraud, rent overcharges and illegal evictions.The suit, filed in Federal District Court in Manhattan, contends that the landlord, the Pinnacle Group, and its owner, Joel Weiner, systematically evicted tenants to raise rents in apartments throughout the city, but primarily in units concentrated in Harlem, Washington Heights and the Bronx.Because Pinnacle owns several thousand apartment units in those areas — most of them bought during the past four years — tenants and their lawyers said the company’s actions constituted an attack on rent-regulated housing in some of Manhattan’s few remaining working-class neighborhoods.Pinnacle has acknowledged sending out some 5,000 letters, called dispossess notices, to tenants in about a quarter of its 21,000 units during a 29-month period from 2004 through 2006, citing nonpayment of rent, invalid line of succession for occupancy and other violations; however, it said only a few hundred people had actually been evicted.

Issuing a dispossess notice is a legal requirement before an eviction can take place. The company said that its rate of eviction was below the industry average.Pinnacle representatives said yesterday that data on evictions since 2006 were not available.In a statement yesterday responding to the lawsuit, Kenneth K. Fisher, a lawyer and former city councilman who is representing Pinnacle, said that the company had not violated any laws.“Pinnacle is proud of its record of providing safe and affordable housing for thousands of New York families, and we are confident that this lawsuit, which was released to the press before being served on us, will be found to be without merit,” the statement read.

The lawsuit — filed by several individual Pinnacle tenants along with a tenants’ group, Buyers and Renters United to Save Harlem, made up largely of Pinnacle tenants — is unusual in that it accuses Pinnacle of engaging in racketeering, including using the federal postal system and interstate wires as “part of an ongoing scheme to increase rents unlawfully, to receive illegal rents and ultimately, to free their properties from New York’s rent control and rent stabilization requirements.”Racketeering allegations are more commonly used by the federal government to prosecute organized crime figures and drug traffickers.The suit also contends that Pinnacle has intimidated tenants through threatened evictions and claimed to make building repairs and improvements that had never been made. The company has acknowledged in the past that it improperly passed on costs of repairs and apartment upgrades to new tenants, but said they were isolated mistakes.Last year, both the state attorney general’s office and the Manhattan district attorney’s office began investigations into the company after receiving numerous complaints from tenants and elected officials.

In December, Pinnacle reached a settlement with the state in which it admitted no wrongdoing but agreed to hire an auditor to analyze its rents. The district attorney’s investigation is continuing, officials said.Richard F. Levy, a senior partner at Jenner & Block, who is representing the tenants pro bono, said the firm filed the lawsuit against Pinnacle after conducting its own yearlong investigation.Andres Mares-Muro, a Pinnacle tenant who is a plaintiff in the suit, said he had recently learned that the rent on his Harlem apartment, $1,275, was almost double that of the previous tenant, $648. “In this supposedly rent-stabilized unit, we are paying market rate,” he said.

http://www.nytimes.com/2007/07/12/nyregion/12evict.html

News probe helps put hit on Pinnacle

BY JUAN GONZALEZ DAILY NEWS COLUMNIST

State Attorney General Eliot Spitzer, who launched a probe in September into allegations that Pinnacle Group LLC had illegally overcharged many rent-regulated tenants for apartment renovations, has reached a deal with the company, one of the city's biggest owners of rent-stabilized units.

Under the deal, Pinnacle will allow an independent investigator appointed by Spitzer's office to review all rent records for the company's nearly 20,000 rent-regulated units. The company agreed to repay any rent overcharges that the investigator uncovers, according to a source with knowledge of the negotiations.

As part of the agreement, which was still being finalized yesterday, Pinnacle will admit no wrongdoing. In addition, the company has agreed to pay $100,000 to the AG's office for the cost of the investigation, the source said.
The deal comes less than two weeks before Spitzer will leave office and be sworn in as governor.
The AG's probe and separate investigations of Pinnacle by the Manhattan district attorney's office and the state Division of Housing and Community Renewal were all launched after the Daily News revealed in a series of articles this year that Pinnacle had filed more than 5,000 eviction proceedings over the past two years against its tenants - nearly one for every four apartments it owns.
The News investigation also found many cases where Pinnacle had inflated the costs of its repairs for vacant apartments and then doubled or tripled monthly rents far above what rent laws allow.
The company's aggressive tactics spawned widespread opposition and numerous protests during the past year from many of its tenants as well as from political leaders and housing advocates in Harlem, Washington Heights and the Bronx, where the bulk of Pinnacle's housing stock is located.

"We are not in a position to comment on any aspect of the review by the attorney general's office at this time," said a spokesman for Pinnacle last night. "The Pinnacle Group, however, has been cooperative throughout this process."
But some tenant groups who heard of the settlement yesterday called it a slap on the wrist to a huge company.
"This agreement is too nice to Pinnacle," said Luis Manuel Tejada, a spokesman for the Mirabal Sisters Cultural Center in Washington Heights. "You just can't tell them to return rents they've overcharged to tenants without also penalizing them for violating state housing laws."
"It sounds like it's, 'Let's pay it off and let the whole thing go away,'" said Kim Powell, of Buyers and Renters United to Save Harlem. "This agreement does nothing about the massive eviction proceedings or poor management procedures at Pinnacle. It's only a part of the problem being solved." Originally published on December 18, 2006

Pinnacle Group: One big city landlord and many little headaches

October 2006

Landlord's battle illustrates trend of buying deteriorating buildings for big profits

By Jen Benepe

706 Riverside Drive In today's tight rental market, any New York City landlord should be sitting pretty.Unless of course, he happens to be Joel Weiner, owner of the Pinnacle Group.Weiner and his company have come under increasing criticism as they have bought up an estimated $1 billion in distressed buildings in Upper Manhattan and parts of the Bronx over a two-year period.The complaints have come from tenants' groups, legal aid lawyers and elected officials who say the company has been overly aggressive in raising rents through false major capital improvements (MCIs) and by trying to remove rent-stabilized tenants.The allegations have spurred recent investigations by both the state attorney general and the Manhattan district attorney.If anything, the public tempest about Weiner and the Pinnacle Group (which is backed by the real estate investment fund Praedium) reflects changing times.Deteriorated housing stock, once the bane of a landlord's portfolio, is now a primary source of double-digit growth.

Reversing the status quo

The company's business model is a factor: Praedium seeks to invest its money in large numbers of deteriorated properties, make repairs and create a healthy rent roll that will yield a profit within one to two years.But most tenants in the new Pinnacle acquisitions, observers say, are more familiar with the old "slumlord" model, where the landlord lets the building go and the tenants stop paying the rent because they're living in a slum; a downward spiral where no one wins.Most of the 104 properties that Pinnacle purchased from landlord Baruch Singer in 2005 for over $500 million were in severe disrepair, and a number of tenants had stopped paying rent years earlier, said Ken Fisher, a former Brooklyn member of the City Council and Pinnacle's legal representative.It's a situation that can lead to clashes with the tenants as they scramble to pay unpaid rent, or balk at new charges that come with building improvements, Fisher noted.These factors have figured significantly in the negative backlash in part because Pinnacle is the only landlord to undertake such a massive buy-out in the areas, or even in the city, some observers said.

Condo conversions

Complicating the picture, some of the properties might be converted to condos: Pinnacle has asked the attorney general's office to approve seven non-eviction plans, most of them on Riverside Drive. One has already been approved.Although Weiner has owned property in New York for 30 years, public opposition to him crystallized when residents of Pinnacle's prime Riverside Drive properties learned of his intent to take their buildings condo. This created fear that they might lose their rent-stabilized apartments, said Kim Powell, a resident in a Pinnacle building who started BRUSH, or Buyers and Renters United to Save Harlem.Another group attacking Pinnacle, the Mirabel Sisters, is run by Luis Tejada, a superintendent at 619 West 140th Street who was fired when Weiner took over, Fisher said."They want to throw out people with rent-controlled apartments, but people here can't pay more rent," said Tejada.Pinnacle has also come repeatedly under the sting of the New York Daily News' reporter Juan Gonzalez, who discovered that Pinnacle has sent out 5,000 dispossess notices for the 21,000 units the company owns, a figure the company has not denied, according to press reports.Gonzalez also provided powerful accounts of tenants -- including a 78-year-old woman and her nine cats -- being forced out of their apartments.A recent account of Pinnacle's actions by the New York Times detailed alleged cases of fraud -- including false billings and cost of renovations that were exaggerated -- that are being examined by the district attorney and the state attorney general's office.In one instance, Pinnacle allegedly recorded using 160 light bulbs, 75 pounds of grout, and 130 gallons of paint for the renovation of a single two-bedroom apartment in Harlem in order to justify raising that unit's rent to $1,900.Pinnacle lawyers acknowledge they made mistakes in the case, according to the Times, and the couple occupying the apartment was awarded $10,000 in rent credits, though they claim they are owed $15,000 more.Pinnacle's lawyers also continue to legally challenge some of their claims, the Times reported.

Uphill public relations battle

The company has been engaged in an uphill public relations battle ever since.While not disputing the figure of 5,000 dispossess notices, Fisher pointed out that the number is misleading, because multiple notices can be sent to the same apartment, or an apartment could have changed hands during the two and half years the notices were sent out.The number of apartments targeted for eviction is closer to 2,500, or 12 percent of Pinnacle's total portfolio, he said. That is less than the city average of 15 percent, or 320,000 dispossess actions out of 2.1 million units citywide, he claimed."In the first year that Pinnacle owns a building, there is usually a higher number of dispossess cases because there are a large number of tenants who haven't been paying rent," Fisher explained.He said when Pinnacle bought the Dunbar Building, a landmark structure that takes up an entire block in Harlem, the arrears were $4 million on a $1.3 million annual rent roll.He also said that BRUSH and several of the tenants at 706 Riverside Drive were using their stance against Pinnacle as a way to negotiate a lower asking price for their apartments, many of them two- and three-bedroom apartments with sweeping river views and original prewar detailing -- worth an average of $1 million, out of reach for most people living in the building.Currently, most of the rent-stabilized, two- to three-bedroom apartments in the building average just $1,100 a month in rent, confirmed Powell.Fisher said BRUSH and Powell were disingenuous because, although claiming to represent all tenants in Harlem, they had only expressed dissatisfaction with Pinnacle.As to former super and current Pinnacle opponent Tejada, he was fired for incompetence, said Fisher, who showed a reporter pictures of the building he was supposed to care for, 619 West 140th Street, surrounded by garbage.Finally, Fisher noted that the rent payments made by the woman with nine cats had not been properly accounted for by the previous landlord, and that her case had since been resolved.

It's also about the system

"Many of the cases that Pinnacle brings are not legitimate," said Ken Rosenfeld, director of legal services of the Northern Manhattan Improvement Corp., a nonprofit organization that provides legal services to tenants in the area. "They just sue."But while tenants' rights advocates, elected officials and lawyers interviewed for this article stated repeatedly that they loathed Pinnacle's tactics, sources noted that the state Legislature created the platform for a company to bring action against tenants who know little about how to navigate landlord-tenant court.A lack of public funding for court representation means that many low-income tenants will lose their homes, said Susan Russell, chief of staff for City Council member Robert Jackson, a Democrat whose district includes many of the up-and-coming Riverside Drive addresses."This is a capitalist society -- what are we supposed to say, that residential property should not be profitable?" she asked. Because 92 percent of landlords have lawyers in housing court, while only 8 to 10 percent of tenants are represented, Jackson's office contributed $50,000 toward tenant court representation, "to level the playing field."Observers also agreed that the law governing the state Department of Housing and Community Renewal should enable the agency to do an accounting of charges related to rent increases, and not expect the tenant to do an after-the-fact investigation on a rent number that he or she may not even suspect is inaccurate.Rosenfeld said the blame also lay in the "extreme" lack of affordable housing in the city, and the inability by government to deliver alternatives.Pinnacle responded that, when it buys a property, it must take legal action if a tenant owes rent. Many of the rental records that Pinnacle inherits are a mess, said Fisher, and have created unnecessary dispossess notices."The real problem comes with relatives of people who have lived in these apartments for years," said Russell, who said many find themselves out of a home if they don't have a solid contract with the previous landlord."There are a lot of concerns about gentrification, but it is not being created by Pinnacle," added Fisher.Powell said that Pinnacle sued practically everyone when they bought a building, but that the majority of the tenants didn't qualify for legal aid. "All of them won, but they didn't get their money back," money that could have been spent toward buying their own apartments, she said.

Making good on a bad start

Still, Pinnacle says it's not only different from many landlords, but that it also provides fair, affordable housing while government has long ago stopped trying to house middle- and lower-class New Yorkers.Fisher said that Pinnacle's intent is to upgrade a property once it has been purchased."In 2005, Pinnacle purchased 6,006 units and we spent $11.5 million on building renovations and $9.7 million on renovation of apartments," he said. Since then, 416 units have turned over to other tenants, but only $4.4 million was allocated to rent-increase calculations, he added.When Pinnacle purchased the Dunbar, there was "broken furniture, a loan shark ring, a brothel, and drug gangs operating out of some of the apartments," said Fisher. "But if you go today the graffiti is gone, the place is spotless."Reporter Wayne Barrett decided against putting Pinnacle on his "10 Worst Landlords" list in the Village Voice because their record was unclear, he wrote.Rosenfeld, who has represented some tenants in court against other big owners in the area like Prana (see below), agreed that Pinnacle had received more attention than other landlords who engaged in the same, or even worse, practices in the area."But when you enter into New York City real estate in such a big fashion and make so many purchases, you unite tenants against you because you are so big," Rosenfeld said.In Pinnacle's favor, Weiner had attended public meetings and made himself accessible, noted Russell.Fisher acknowledged that the company had made some mistakes and had since hired two community outreach staffers, met with more than a dozen elected officials and community leaders, and joined organizations that reach out to tenants.

Necessary improvements?

Part of the brouhaha is that one person's justifiable building improvement is another person's gingerbread. When MCIs are made, the major capital improvements can be used as a way to increase rent-stabilized rents."Our allegations have been overcharging in rent and capital improvements," said Powell, whose tenants' group raised $6,500 for an independent engineer's assessment of 706 Riverside Drive, which they determined will require an additional $2.8 million dollars worth of work."Flags, gold paint and security cameras," she noted, "are not for the benefit of the tenants."But one man's unneeded gold paint is another's sorely needed paint. Fisher tells the story that someone was complaining that the elevator in 706 Riverside Drive needed to be replaced, and Joel turned to Kim Powell and said, "You told me not to do that because you didn't want an MCI.""That is an example of the level of complexity and acrimony that you might not see in other cities," Fisher said.

Funds find profitability, controversy as landlords

The prospects for growth in changing areas like Washington Heights and the Bronx have attracted large investment funds looking for big profits.Although tenants are quick to attack the Pinnacle Group as making cosmetic improvements to attract higher rents and then passing the charges along to existing tenants, other landlords in the area with a similar financial model have operated quietly out of the limelight. New York City property records show that Prana Growth Fund owns more than 42 properties in the area, most of them in the heavily Dominican areas of Washington Heights, where tenants are less likely to wage public battles because they don't speak English. Prana quickly sold 600 West 161st Street when news of their lawsuits with tenants started becoming public, according to sources. Extell Development recently bought up five buildings from Broadway to Riverside Drive on 137th Street, but tenants say they received notices of the new ownership in their rent slips, and the office number they were given always goes to an answering machine. A spokesman for Extell, George Arzt, said that the company had no intention, so far, of turning those buildings into condos, and would make itself more accessible to tenants in the future.Operated by Kurt McCracken, Richard Esposito and Peter Larsen, Prana, which is based in San Francisco, is described by investment adviser Kochis Fitz in their newsletter as a company that "looks for opportunistic investments in inefficient markets that are generally characterized by unsophisticated, capital-constrained buyers and sellers, significant government regulation (primarily rent control), and a large variance in rents for similar units."The newsletter notes that Prana seeks such investments in urban areas and "once purchased, the objective is to achieve positive cash flow within 12 months." Their long-term goal says Kochis Fitz is "significantly increasing rent rolls," while managing tenant turnover, focusing on tenant relations, and making "cosmetic improvements."Yet tenant groups, local representatives and even legal aid lawyers for the most part were unaware that the company is operating in Upper Manhattan or that many of its tenants have experienced such aggressive tactics when Prana bought out their buildings.Attorneys Robert Sokolski and Daphna Zekaria successfully represented tenants in actions against Prana in 2004 and 2005. Ana Ingersoll, president of a tenants' group at 600 West 161st Street, said the building had 1,023 code violations."Many [of the apartments] are in obvious disrepair: Faucets leak, paint is peeling, bathrooms are moldy, and some stoves have been without gas for months," reported the Gotham Gazette in 2005; the newspaper noted that Prana had not returned its phone calls. In San Francisco, Prana has gained a reputation for "systematic evictions" of tenants of buildings it acquired, according to tenants and lawyers who represented them. Praedium Group, the big backer behind Pinnacle's two-year buying spree, has an investment strategy that reads like a carbon copy of Prana's:"Our strategy," the company wrote on its Web site, is "centered on pursuing middle-market assets with a total cost of less than $75 million each, and focusing on "value enhancement" opportunities, which includes "deterioration of the asset's physical condition; inadequate repairs and maintenance, an ownership that has failed to aggressively manage the current tenant/leasing base," and several other criteria that define distressed properties.Both Prana's and Praedium/Pinnacle's business models seek to upgrade the properties well beyond the level at which they had been operating. But while Pinnacle owner Joel Weiner has appeared publicly to address tenant issues and responded positively to pressure from the media, Prana has made itself completely inaccessible to the public; every single one of their publicly listed numbers is a fax machine. Repeated calls to their offices in San Francisco went unanswered.

Copyright © 2003-2005 The Real Deal

DUNBAR TENANTS ASSOCIATION

DUNBAR TENANTS ASSOCIATION

As Landlord Grows, So Does Criticism

September 3, 2006
As Landlord Grows, So Does Criticism
By TIMOTHY WILLIAMS

Not long ago, Joel Weiner was a small player in New York City’s residential real estate industry. The properties he owned were neither extensive, nor impressive.

But during the past two years, Mr. Weiner, 57, and his firm, the Pinnacle Group, have spent more than $1 billion on hundreds of apartment buildings and quietly become one of the biggest property owners in neighborhoods from Brooklyn to the Bronx.

But Pinnacle has had pro

blems as it expanded: It is the subject of criminal investigations by the Manhattan district attorney and the state attorney general’s office; it has been denounced by Representative Charles B. Rangel and other politicians; and it has been the subject of angry community meetings and rallies and petitions signed by thousands of people who object to its business practices.

Last week, the attorney general’s office subpoenaed Pinnacle documents, including rent registration forms, as part of its investigation, Pinnacle officials said.

The antipathy generated by Mr. Weiner and Pinnacle is the city’s latest entry in the time-honored landlord-versus-tenant struggle, between those who want to keep their rents down and those who want to raise them. But this one is being played out with perhaps greater passion because of a tight housing market and the breakneck speed of gentrification in recent years, which has seemed to transform many formerly undesirable neighborhoods overnight.

Critics accuse Pinnacle of buying buildings and firing superintendents within weeks. Questions have also been raised about whether the company has violated the city’s rent-stabilization laws by sometimes raising rents higher than is legally allowed, through such measures as passing along the cost of questionable renovation expenses. In one case, the cost of installing five toilets was passed on to a tenant in a two-bathroom apartment.

The critics also say the company has been engaging in harassment to force people out of their apartments. Tenants describe being put through a Kafkaesque tangle of eviction notices slipped under doors at night, and of legal challenges made to their right to live in longtime apartments.
In some buildings, one-quarter to one-half of the tenants have received so-called dispossess notices — typically the start of the eviction process — within a few months of Pinnacle’s purchase of the property. The company’s practices, its critics say, are a case study in the gentrification of some of the last working-class neighborhoods in Manhattan.
“We’ve been living here since it was the drug capital of the world, now we are sitting on a commodity,’’ said Rafael Gomez, 48, who lives in a Pinnacle building in Washington Heights, adding that people ask how “do we end up in such a beautiful neighborhood when we are poor people?”

Mr. Weiner denied criminal wrongdoing and said his goal was to be recognized as a model landlord. He has acknowledged raising some rents, but said the increases were necessary so he could provide safe, quality housing. His lawyers maintain that any errors Pinnacle may have made in seeking to evict tenants or in overcharging on rent have been the result of honest mistakes. The company rightly says costs of improving apartments can be legally passed on to tenants.

Mr. Weiner has not disputed that his company has sent out 5,000 dispossess notices to tenants in its approximately 21,000 apartments in the past 29 months. That, say adversaries, is itself cause for alarm.
“When you are trying to evict one out of four tenants, that is what lawyers call prima facie evidence,” Congressman Rangel said. “It is something that screams out for a criminal or civil or legal remedy.”

Mr. Weiner agreed to be interviewed, but did not want his photograph taken because, his lawyers said, he wanted to protect his privacy and because he had received a death threat on the Internet.

Mr. Weiner, who was born in Brooklyn and lives on Long Island, said his objective was to simply get tenants to pay their rents. And he makes no apologies for Pinnacle’s aggressiveness in moving to evict those late on rent or otherwise not legally entitled to live in his buildings.

“When you are in the trenches and you try to turn around a building, it’s not easy,” he said. He has hired a team of prominent lawyers, including former City Councilman Kenneth K. Fisher and Benjamin Brafman, a defense attorney whose clients have included Michael Jackson.

Mr. Weiner describes himself as a hands-on owner who visits his properties frequently and is a stickler for cleanliness, order and the removal of building code violations.

Although much of the criticism about him has focused on gentrification, Mr. Weiner said his recent purchases of buildings in neighborhoods like Washington Heights, Harlem, Inwood and the South Bronx would not necessarily lead to wealthier tenants moving in and displacing current residents.
“I don’t want to call it gentrification,” he said. “I want to call it meeting community needs.”

He said he typically raises rents after he buys a building in order to pay for the major improvements he must make because previous landlords have neglected many of the properties. Pinnacle legally passes those costs on to tenants in higher rent bills. “This is a very tough business,” he said. “I have a passion for doing it, and doing it right.”

In December 1997, Pinnacle owned 267 apartments in the city, and Mr. Weiner, though wealthy, was unknown, even to many of his competitors. But by May of this year, after an infusion of cash from the Praedium Group, a real estate fund that specializes in investing in inner cities, Pinnacle’s holdings had jumped to 21,642 apartments.
From May 2004 to May of this year alone, the number of Pinnacle-owned apartments had tripled, with most of the recent purchases concentrated in Upper Manhattan and the Bronx. Among its acquisitions — for $500 million — was the 2,900 apartment portfolio of Baruch Singer, who had become one of Harlem’s most notorious landlords because of the number of code violations and fines his buildings incurred.

Kim Powell, who in November 2005 helped start an anti-Pinnacle group called Brush — Buyers and Renters United to Save Harlem — said the group’s primary problem with Pinnacle was how it treats renters. “They have shown an absolute disregard for tenants,” Ms. Powell said.
The Pinnacle model has been to purchase what it refers to as distressed properties — typically apartment buildings that have numerous code violations, are in poor repair, and house many tenants who are behind on rent. The tenants in the 104 Singer buildings, for example, were in arrears for a total of $4.3 million, according to Pinnacle.

The company cleans up the building, often starting at the basement. It scrubs graffiti, installs exterior lighting, cameras and new front doors, and works on code violations. The rent-stabilization laws allow some or all of the cost of that work to be passed on to tenants in the form of higher rents.

Vacant units often get complete makeovers, including new kitchens. Landlords can also increase rents on vacant apartments by as much as 20 percent under state rent regulations. As a result, rents paid by incoming tenants are often significantly higher than what previous renters of the same apartment had paid.

Tenant advocates say Pinnacle is intent on raising rents to the $2,000-a-month threshold, which would remove the units that are vacant from rent-stabilization protection.
The law would then allow a landlord to rent those apartments for whatever the market will bear.
“That’s their business plan,” said Ken Rosenfeld, director of legal services for the nonprofit Northern Manhattan Improvement Corporation. “They’re testing the waters, they’re pushing the envelope.”
Mr. Weiner however, said that few of his apartments had reached the $2,000 level, and that he usually charges tenants less than the legally allowed rent because the current market cannot support higher rents. The city allows an occupied rent-stabilized apartment to be deregulated after its rent hits $2,000, but only if the tenants’ household income is at least $175,000 for two years in a row.

The Manhattan district attorney’s office and the state attorney general’s office have sought Pinnacle work invoices, eviction records, responses to tenant complaints and other documents to try to determine whether there is a pattern of fraud, whether the costs of renovations were exaggerated and false billings were submitted, officials said, speaking on the condition of anonymity because the investigation is ongoing. Some of the accusations against Pinnacle, as well as some details of the investigations, have been reported by The Daily News.

Mr. Weiner said he was cooperating with the inquiries and has pledged to change Pinnacle’s business methods if either office requests it. The company has also hired two community outreach workers with the goal of forming a community advisory panel that would help guide Pinnacle operations.

Further, the company said it was willing to turn over the files of the 1,256 cases it is currently litigating against tenants to elected officials so they can be examined. Finally, it has agreed not to seek to evict elderly tenants without first contacting the city Department of Aging.

“I am looking every day to improve the operation,” Mr. Weiner said.
Many tenants however, say they have had unsettling encounters with Pinnacle and its lawyers.
Karen Flannagan, 53, said that even after she had presented Pinnacle documents that established her residency rights to her Harlem apartment after her mother died, the company slipped an eviction notice under her door and took her to court. Her mother had been the leaseholder and the family had lived in the apartment along with Ms. Flannagan’s teenage daughter for several years.

“Here I am trying to grieve, and I am having to worry about me and my daughter being thrown out,” she said.
After two years and 10 appearances in housing court, Pinnacle abruptly dropped the case a few years ago, she said. Pinnacle lawyers, however, said recently that Ms. Flannagan’s original documents had not been sufficient, though in a statement this week the company said it regretted any inconvenience it had caused her.
Marjorie Charron, 56, and her husband, Ted Charron, 59, moved into a Pinnacle building in Harlem in 2001, paying $1,900 a month for a two-bedroom apartment. They were told by Pinnacle that by law, the company could have charged as much as $2,500.
When the couple realized that other tenants were paying far less, they found out that Pinnacle had claimed to have performed $20,000 worth of remodeling work on the apartment before they moved in, which gave the landlord the right to raise the rent by a corresponding amount.
When they examined Pinnacle’s invoices for the work done on the apartment, however, they found that the company had included charges for 160 light bulbs, 75 pounds of grout, 130 gallons of paint, a $198 nail gun and a $424 drain cleaning device. They also found that some items listed as installed were not there, including oak flooring and a pedestal sink.
Other costs included maintenance work such as painting walls and sanding floors, the costs of which are not permitted to be passed on to a tenant by a landlord.
Five years later, the couple was awarded $10,000 in rent credits from Pinnacle, although they say the company owes them at least $15,000 more. Pinnacle lawyers acknowledged having made mistakes in the Charron case, but continue to legally challenge some of the couples’ claims.
“The average person can’t do this, so by default, Pinnacle wins almost every time,” Ms. Charron said. In a statement this week, Pinnacle said the items had been “inadvertently misallocated” and apologized.

In another case, Erica Martinez, who lives in a Pinnacle building in Washington Heights, received a $1,317.83 rent credit from Pinnacle after the State Department of Housing and Community Renewal ruled that she had been overcharged. In addition, the agency ordered Pinnacle to pay her triple the amount of the overcharge — or a total of nearly $4,000 — because the overcharge had been deemed “willful.”
Pinnacle lawyers said the company had made mistakes in the Martinez case, but had not done so purposely.

In another case, Pinnacle has attempted to pass on charges to tenants for the $21,700 cost of new front doors in one of its buildings in Harlem, even though they were replaced several years earlier. The state eventually quashed the attempt and the tenants’ rents were not increased.
“Pinnacle, if by the second or third overcharge they had said, ‘Something’s wrong, lets make it right,’ I would have given them credit, but they never have,” said Hazel Miura, a tenant organizer in the Bronx.
Another Pinnacle tenant, Mark Gordon, was charged through his rent for the cost of five toilets for his apartment in 2001, even though he had only two bathrooms. Pinnacle’s invoices also included the cost of replacing electrical wiring that appeared not to have been replaced and a double billing for the installation of kitchen cabinets.

Mr. Gordon said three years and $10,000 in legal fees later, Pinnacle resolved the case by agreeing to lower his rent. While at the time, Pinnacle did not admit making any errors, the company recently acknowledged making a mistake.

But Pinnacle’s lawyers said that in only about 50 cases had the company been found to have overcharged tenants and that only about 6 percent of its units were currently under litigation. Pinnacle says that most of the tenants it has moved to evict have failed to pay rent for at least two months.

Mr. Weiner said he instructed his employees to work out cases with tenants amicably, and that he only used the courts as a final resort. His lawyers say that despite handing out thousands of dispossess notices, no more than 351 people have actually been evicted since 2004.

Housing horrors basis for hearing and new legislation

by TALISE D. MOORER Amsterdam News Staff

The reason is unclear as to why Assemblyman Adriano Espaillat (D), who is not an official member of the New York State Assembly’s Housing Committee, attempted to chair a recent hearing on the grounds of Columbia Presbyterian Hospital—an area landlord with its own problems, also dubbed by watchdogs as notorious for displacing longtime Harlem residents—and not on friendlier turf.Of the many tenants and activists present at the lively meeting, some applauded the assemblyman’s vying for constituent affection.

Others are somewhat suspicious. What ’s pressing, however, is that tenants throughout the village of Harlem, including Board 12, Espaillat’s representative area, claim they are being legally thrashed and abused by practices of giant landlords in relentless pursuit of greater profits.Tenants, community activists and elected officials agree that the Pinnacle Group, who is presently under fire for allegedly deploying such practices against tenants to the tune of some thousands in Manhattan alone, is not the only real estate magnate in the till.One witness after another gave testimony before a dais that included Assemblyman Michael Benjamin; Jeffrey Dinowitz; Lisa B. Rosenthal; and later, Assemblyman Keith L.T. Wright, the senior ranking official and Chairman of the Sub-committee on Public Housing.“New York State Law is all but toothless when it comes to abusive landlords,” said Wright in a statement released to the press. “We in the State Legislature need to do much more to protect New York City’s affordable housing stock and its renters, such as strengthening DHCR enforcement powers over landlords who use fiscal might to lodge thousands of court cases against residents, using the judicial system as a tool for harassment.”

State Senator Eric Schneiderman was among the first witnesses. He testified to a need for a more aggressive agency in the Division of Community and Housing Renewal (DHCR), the reported overseers of a landlord’s application for recovering costs of Major Capital Improvements (MCI). Schneiderman said that there is a need for audits of MCI applications; fines need to be imposed in instances of abusing the process; and that he hopes for support of Assembly Bill 5292, which legislates such changes.Dinowitz agrees. He stated, “The DHCR is not functioning to protect tenants and more times than not tenants are hit with extensive recovery costs without warning. DHCR acts quickly when processing for the landlord and moves like a tortoise for the rights of tenants.” Individually, Kenneth Rosenfeld, Director of Legal Services, Northern Manhattan Improvement Corp.; and Attorney David Hershey-Webb stressed a need to improve tenants’ right to legal representation. “We need a different set of regs when a landlord can get triple rent by getting a tenant out of an apartment and the tenant lacks the right to legal counsel.”Recently, the Mirabal Sisters Cultural and Community Center, along with Assemblyman Wright, held another rally Against the Pinnacle Corporation.Angry tenants had reached out to Wright’s office out of disgust and frustration over documented complaints they’ve made concerning poor living conditions within their apartments, owned and operated by Joel Weiner, principal of the Pinnacle Group LLC, the real estate company that has allegedly filed an astonishing number of eviction proceedings since 2004 against tenants who live in its nearly 20,000 apartments.Reportedly, those cases were suddenly dropped within hours after at Pinnacle got wind of media inquiries.

Weiner has been under fire lately from housing advocates who say his company harasses rent-stabilized tenants, in order to vacate apartments and sharply increase rents.Weiner claims all his actions are aboveboard.Wright said, “Pinnacle tenants are still being evicted throughout Harlem at a record pace. Although Pinnacle’s public relations machine is in full gear to refute this fact, there has been no tangible change in their predatory and discriminatory business practices.”In response to a massive outcry from community members, elected officials and housing activist groups, Wright along with Mirabal Sisters Cultural and Community Center, held a rally in front of the Pinnacle Corporation’s headquarters to again call on the developers to end their perceived continued battle against Northern Manhattan residents.Pinnacle, who owns more than 100 buildings in the Harlem area, including those formerly owned by notorious slumlord Baruch Singer, has in the previous year begun thousands of eviction proceedings in Northern Manhattan. Many of these eviction proceedings apparently have been lodged under questionable circumstances resulting in dozens of cases being summarily dismissed, and more often withdrawn by Pinnacle after intense media attention.

The sheer number of proceedings, coupled with the manner by which many of them have taken place, has sparked official investigations by both Attorney General Eliot Spitzer and Manhattan District Attorney Robert Morgenthau.“Pinnacle is quickly becoming the worst of the worst when it comes to Harlem landlords, using methods and tactics that not only speed up the process of gentrification in Harlem but specifically exclude the indigenous tenants of Harlem who in some cases have been living in these buildings for generations,” said Wright. “With co-op and condo conversions, people being pushed out of public housing, Section 8 vouchers being cut back and so called ‘urban renewal’ schemes, these actions perpetrated by Pinnacle are the absolute last thing Harlem needs. I would encourage Attorney General Spitzer and District Attorney Morgenthau to do their utmost to ensure that all laws are being followed to the fullest extent, and stop the parade of Pinnacle lawyers smiling all the way down from Harlem to 111 Center Street.”Meanwhile, witnesses at the hearing and elected officials said they’ve accumulated great suggestions for forming new legislation to meet the needs of the people.Some activists wager that the government, with a change in control, could mark the return of home rule and the much needed repeal of the agonizing Urstadt Law, which essentially removed NYC control over housing policies.

Harlem Residents: Clinton Is Symbol Of Gentrification

Harlem Residents: Clinton Is Symbol Of Gentrification
By KELLY BIT - Special to the SunJuly 20, 2006
A D V E R T I S E M E N T



Harlem residents gathered outside President Clinton's office yesterday to protest against the former president as a symbol of Harlem's gentrification and the displacement of its residents.

The Harlem Tenants Council hosted the protest at 125th Street between Lenox and Park avenues that was attended by about 40 mostly elderly, African-American residents of the area. A HTC co-founder, Nellie Bailey, said the primary goal of the protest was to draw attention to what she calls a "housing crisis in Harlem," due in part to displacement because of price increases by landlords and evictions.

"We're hoping to have a dialogue with a president of enormous influence," Ms. Bailey said, "so he can understand the concerns of Harlem tenants," including the lack of a comprehensive, beneficial housing policy and legal services. A Clinton Foundation spokesman, Jay Carson, declined to comment on the protest.

The president of the Savoy Park Tenants Association, Valerie Orridge, said residents in her community generally
face two problems. Ever since Governor Pataki signed a law in 2003 that gave landlords the right to demand standard rent from tenants used to paying preferential rent — an amount lower than the standard price — landlords have demanded prices that tenants can't afford, she said. "There's a substantial difference between the two, like $300 or $400," Ms. Orridge said.

The other problem involves primary tenancy."Landlords allege that tenants don't live in their apartments and that they have other properties," she said. The New York City Rent Guidelines Board stipulates that tenants must live 183 days out of the year in their primary residences.

The Greater Harlem Real Estate Board reported that New York City's rent stabilization rate last month rose to 4.5% from 2.75% for a one-year lease and to 7.5% from 5.5% for a two-year lease. Belinda M'Baye, a broker for Harlem Homes Realty, said that fair market rentals in Harlem are also going up. "On average, rental prices for a one-bedroom apartment have increased from $800 in 2000 to $1,400 in 2006." She added that once rent surpasses $2,000 a month, the lease becomes destabilized. "More buildings are losing rent stabilization status. It's hard to say how many, there are so many buildings".