Editor’s Note: The following is the ninth of a KCP investigative series by reporters Kelly Mena and Stephen Witt on how New York City is taking paid off properties from longtime small property owners, including black and brown seniors, and giving them to connected non-profit and for-profit developers as gentrification sweeps across Brooklyn.
If the city’s justification for taking fully paid off black-owned properties is to keep the apartments affordable and the buildings better kept, they’re off to a rocky start with the longtime tenants of 25 MacDonough Street in Bedford-Stuyvesant.
That after the new “sponsors” under the city’s Department of Housing Preservation and Development (HPD) told the new tenants nothing will get repaired until they start paying them rent, and they will likely have to vacate the building in two years because they plan to gut renovate the building.
“They put a flier up in the hallway saying they are the new owners with no official documentation and told us that we have to pay rent to them and if we don’t pay it nothing will get fixed,” said Bernard Mayers, a long-term resident who lives in the building with his wife and three kids.
Mayers and other tenants said they’re not even sure who the new owners are or if there is in fact new owners. They were told, though, that once the building is gut renovated they will have a choice of giving them a low down payment to buy their apartments back as co-ops, or they can find another place to live.
The 19-unit building, which the city has taken with no compensation to the black family which owned the property for 50 years, did so for back property taxes and water bills totaling about $120,000, and after labeling it a “distressed property.” It is currently worth about $3.2 million and sits on a choice block near two subway stations and a stone’s throw from Fulton Street – Bed-Stuy’s main commercial thoroughfare.
HPD took the property in a bundled and alleged secretive court foreclosure proceeding under its Third Party Transfer (TPT) program. The program started when the city had thousands of abandoned and neglected properties on its hands – long before gentrification greatly increased the value of even vacant lots all across Brooklyn.
In this case, HPD transferred the property to its city-affiliated Neighborhood Restore Housing Development Fund Corporation (HDFC), which gave the property to the Wall Street-based non-profit Urban Homesteading Assistance Board (UHAB) as the building “sponsor,”who in turn gave it to Long Island-based Concord Management of New York to manage the property.
Ronald Callender, a Barbadian immigrant who worked as a mechanic on Atlantic Avenue, bought the rent stabilized apartment building in 1968, kept it during the city’s lean years, paid it off and left it to his son and two daughters under the name Gilmer Holding Corp.
However, the son, who was named executor of the estate mismanaged the building and several months ago, the two daughters enlisted their first cousin, Lamarr Jones, a graduate of finance from the prestigious historically black school, Morehouse College to come in and straighten things out.
Jones entered into a property payment installment agreement with the city on Nov. 2, 2017 and made an initial payment of $25,000 for back payment of the property and water taxes, as well as an additional $535 to get the property in a payment plan to stop the city’s collection process.
Jones also participated in HPD’s Alternative Enforcement Program (AEP) and cleared up 82 percent of the relatively minor building code violations. What neither he nor the AEP director nor the tenants knew at this time was that the family already lost the building in a foreclosure court to the TPT program.
Jones, who said Ronald Callender always wanted to keep the property in the family as a legacy, retained attorneys who successfully got a temporary restraining order from the city to proceed any further with the foreclosure. They did so on the grounds that both the Gilmer’s procedural and substantive due process rights have been violated, the property itself is not a “distressed property” as the city alleges and the program used to take the property was both untimely and caused irreparable harm.
But the restraining order apparently did not stop the new managers from changing the locks and meeting with the tenants to tell them of their plans to displace them and gut renovate the building.
Meanwhile, the tenants are angered that the city has not been forthcoming about the takeover of the building and several told KCP they were never given proper notice that the city took it. Additionally, they are not sure who actually owns the property now – Neighborhood Restore, UHAB, Concord Management or Gilmer Corp .
While the tenants complained that the building is in disrepair, the building’s handy man, who identified himself as Tony, and who does work on several buildings in the neighborhood, said the boiler is in good shape and while some repairs are needed, the older building is more in need of some tender loving care and not a gut renovation.
Mayers said he thinks it would be better if the city worked with Gilmer and gave them a chance to both repair and make up the property taxes so the building can stay in the family and remain black owned.
While the building’s tenants are black and it is in a traditionally black neighborhood, whites now walk up and down the street as gentrification transforms the neighborhood. A gut renovation could likely include more square footage such as the new building next door, in which several of the new white neighbors now live.
Jones, meanwhile, questioned the city’s plan to displace tenants, many of whom have not had rent increases in years. They also include some family members and several of the tenants trace their roots to Barbados, much like the Callender family.
“The economics here just doesn’t work,” said Jones. “We have a tenant in a studio apartment here that pays $667 a month. They’re going to take everybody out and gut renovate this place, and that same tenant not only will not be able to find a place to live at that price in the interim, but when they come back to that apartment they won’t be able to do so at anywhere near that price. The affordable housing agenda of this administration is bogus.”