Government Real Estate Scam Odds, Ends & Loose Threads

City Council News Kings County
Top Row: (L to R) 1217 Dean Street, Residents of 25 MacDonough Street in Bed-Stuy, Bottom Row (L to R): Mr. Dorsey previous owner of 373 Rockaway Parkway, 19 Kingsland Ave. in Bushwick

Editor’s Note: The following is the 16th 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.

As The KCP Investigation continues into the city’s taking of fully paid off properties through the Department of Housing Preservation & Development (HPD), Third Party Transfer (TPT) program, KCP has been busy chasing down a number of leads in trying to unravel the complex role of the government’s involvement. What follows is a few of these odds, ends and false leads with a brief explanation:

False lead: 2017 City Legislation Prompted the Foreclosures

In 2017, the coalition Stand For Tenant Safety (STS) along with the City Council’s Progressive Caucus put together a legislative package of 11 bills, which passed the Council in August of that year.

Among these bills was City Council Member Ben Kallos‘ (D-Manhattan) bill, Intro. 0930, which expands HPD’s (TPT) program, allowing the city to foreclose and sell distressed residential buildings to pre-qualified third parties, and to include buildings whose owners have incurred large amounts of unsatisfied building violations.

The bill, although expanding the definition of “distressed” property, had nothing to do the seizure of more than 60 properties across Central Brooklyn in a single foreclosure judgement last September. The  legislation does not go into effect until 2019, and even if it was in effect, would unlikely  include the properties featured in KCP’s investigative series as these properties do not have the type of building violations detailed in the bill.

However, further investigation surrounding legislative issues around the TPT program, has revealed that once the properties are transferred, the new owners/sponsors are not liable for any taxes, water bills or building code violations fees owed. Additionally, the new sponsors get millions of dollars in subsidies, tax breaks and other financial incentives to redevelop the properties.

Additionally, several STS coalition members are connected to two of the four fully paid off properties KCP is examining that have been seized by the City. Specifically, St. Nick’s Alliance, Brooklyn Legal Services Corporation A and the Urban Homesteading Assistance Board (UHAB).

Antonio Reynoso
City Council Member Antonio Reynoso

When initially facing a foreclosure proceeding, tenants at 19 Kingsland Avenue reached out for help to Brooklyn Legal Services A and St. Nick’s Alliance for advisory help. Though both organizations stepped in to help, in the end the residents still lost ownership to their property. The former property owners also allege, through emailed documentation, that the Progressive Caucus and City Council Member Antonio Reynoso‘s (D-Williamsburg-Bushwick) office was helping them get through the foreclosure process.

In the end, 19 Kingsland Ave. was taken in foreclosure, with St. Nick’s Alliance, the same non-profit counseling the owners out of foreclosure, wound up taking their property. Brooklyn Legal Services also denied any wrongdoing in the final foreclosure judgement, simply stating through a spokesperson that they merely advised the tenants on the foreclosure process but were never formally retained as their legal counsel.

Additionally, the Wall Street-based Urban Homesteading Assistance Board (UHAB) and the Fifth Avenue Committee are members of Stand for Tenant Safety coalition. HPD tabbed UHAB as the sponsor/owner of 25 McDonough Street.

Mayor Bill de Blasio
City Council Member Brad Lander

The Park Slope-based Fifth Avenue Committee is also a member of the coalition. They are a major non-profit property owner and manager with close ties to both Mayor Bill de Blasio and City Council Member Brad Lander (D-Park Slope, Kensington, Windsor Terrace). HPD Foreclosure Acquisitions Analyst Lorraine Seabrook-Fisher formerly worked for the Fifth Avenue Committee.

New Leads Worth Investigating 

Relationships Between HPD, The City & Non- and For-Profits  

The relationships between HPD and the trusted pool of for-profit and non-profit developers have yet to be publicly revealed. HPD has yet to provide a list of these chosen third party developers and how they made it onto their list.

The still seems to be a lot of information left to be revealed about the board and ownership of each of these developers in regard to campaign contributions and relationships to HPD and other city housing agencies.

The Legal/Judiciary Branch

A good number of all foreclosures come before two or three judges, and in particular the Hon. Judge Lawrence Knipel, the Hon. Judge Mark Partnow and the Hon. Judge Noach Dear.

Partnow is married to Sue Ann Partnow, the female district leader and counterpart to male District Leader and Kings County Democratic County Boss Frank Seddio. Knipel is married to female District Leader Lori Knipel.

Dear, earlier this year, was removed from Brooklyn Civil Court and sent back to State Supreme Court after it was reported indiscretion over consumer debt cases, according to the New York Post.

Though these relationships in no way mean or allege any wrongdoing or culpability, the connections still lead to more questions than answers.

City Councilman Robert Cornegy Jr

Meanwhile, City Council member Robert Cornegy Jr. (D-Bedford-Stuyvesant, Crown Heights), who chairs the council’s Buildings Committee, said at the very least it appears to be a glitch in the system in regards to these homeowners paying their property taxes and not having the payments recorded in a timely manner. 

However, Cornegy stopped short of calling for a freeze on the properties taken thus far, even though according to the law, the City has no authority to designate a property for the TPT program unless liens have existed for significant health and safety violations or emergency repairs. 

“We’re committed to re-evaluate every single one of them [properties taken]. At the very least they bear looking at in a deeper dive and I’m going to commit to that. Clearly there is something wrong with how money is being directed and one of the first things to look at is how funds are directed once made,” said Cornegy.

Cornegy will hold a Town Hall on the program’s recent round of seizures. The event is slated for 6:30 p.m. to 8:30 p.m., Thursday, Nov. 15, at Brooklyn Law School, at 250 Joralemon Street in Brooklyn Heights.

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