City Council Schedules Hearing To Address Ongoing TPT Investigation

Much of the properties taken by the Third Party Transfer (TPT) program are located in rapidly gentrifying neighborhoods in New York City (Photo by Tsubasa Berg).
Much of the properties taken by the Third Party Transfer (TPT) program are located in rapidly gentrifying neighborhoods in New York City (Photo by Tsubasa Berg).

Major revelations are expected later this month, as a joint hearing between the New York City Council Committee on Housing and Oversight and Investigations looks to reveal the results of a 6-month long investigation in the controversial Third Party Transfer (TPT) Program, KCP has learned.

Council Member Corey Johnson
Council Member Corey Johnson (Credit: Jeff Reed)

The hearing will be lead by City Council member Robert CornegyJr. (D-Northern Crown Heights, Bedford-Stuyvesant) and Ritchie Torres (D-Bronx), who will announce the results from the Oversight and Investigations Unit of the Council.

“This joint hearing is the result of six months of the council working with the office of Oversight and Investigation (DOI) and their findings on HPD and their oversight of the Third Party Transfer Program,” said Cornegy.

A source close to the investigation says the findings have identified some problems in HPD’s handling of the TPT Program including potential abuses by the city through the program and mislabeling of “distressed properties” under the program.

The unit was first created in the beginning of 2018 under the leadership of newly minted Speaker Corey Johnson (D-Manhattan) with the aim of reviewing corruption or abuse amongst city agencies.

The unit has subpoena power and supports the Council’s Committee on Investigations and is made up of a team of about 15 staff members.

The hearing comes just three months after a sweeping decision in Kings County Supreme Court, in which Judge Mark Partnow ruled that the City of New York violated the U. S. Constitution in the seizure of six central Brooklyn properties, and ordered the city to give them back to their owners, restoring millions of dollars of intergenerational wealth in the black and Latino community.

The TPT program first came under fire last September, following KCP’s first storyinvolving the taking of a brownstone in Crown Heights, Brooklyn from a retired former nurse, Marlene Saunders.

Under the TPT program, the city seizes properties they deem “distressed,” and give them to the public/private non-profit Neighborhood Restore, who in turn give the property for a nominal fee to a qualified non-profit or for-profit developer. The program was created in the late 1970s, when the city had a large number of abandoned and neglected buildings.

However, with gentrification, these properties, and others in the same program, are now worth millions of dollars in market value. Almost all were completely paid for with no mortgage and located in traditionally black and brown neighborhoods, which are becoming increasingly gentrified.

When the city takes property under TPT, they give no equity to the property owners, who in many cases paid thousands of dollars in back taxes and water bills to the Department of Finance, which was never registered as being paid.

Currently, there is a federal civil lawsuit in the U.S. Southern District of New York Federal District Court against the constitutionality of the program’s taking of homes under the in rem foreclosure process.

The lead plaintiffs in the case-three of the property owners, McConnell Dorce, Cecilia Jones and Sherlivia Thomas-Murchinson- allege the city took their fully-paid properties with no compensation. The property owners are currently still litigating the matter and a decision is expected for later this year.

However, if successful, the class action lawsuit, could cost the city tens of millions of dollars and the return of dozens of properties.

The joint hearing is slated for 10 a.m., Monday, June 17, at City Hall in the Council Chambers in Lower Manhattan.

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