Kings County Supreme Court Judge Mark Partnow is in the process of making a ruling on the city’s taking of two black- and brown-owned properties, and giving them in sweetheart deals to connected non-profits that stand to make millions of dollars in redevelopment fees.
The properties – at 19 Kingsland Avenue in South Williamsburg and 25 MacDonough Street in Bedford Stuyvesant – are two of 66 properties originally taken as part of the city’s Department of Housing Preservation and Development’s (HPD) Third Party Transfer program (TPT) in a in-rem foreclosure judgement that Partnow granted in December 2017.
However, in light of a continuing KCP investigative series on the program, a number of the properties have been taken out of judgement. Additionally, several lawmakers have called on a city, state and federal investigation of the program, which is potentially taking millions of dollars of generational wealth out of these communities.
On Tuesday, Partnow heard arguments from Angelyn Johnson, the lawyer for the six working-class co-op tenant owners of 19 Kingsland Avenue, and Attorneys Warren Shaw and Andrea Feller representing the city, and Brian Markowitz, the attorney representing Neighborhood Restore, the public /private non-profit that serves as the go-between for the city and the favored non-profits.
In many of the cases, the properties are completely paid off with no mortgage, and are now worth millions of dollars and located in historically black and brown neighborhoods, where property values have skyrocketed due to gentrification.
Johnson’s arguments centered on the 19 Kingsland Avenue property not meeting the definition of being “distressed” which the law requires for the taking of in-rem foreclosures. She also argued the city did not serve the tenants properly in letting them know that they faced foreclosures.
Johnson further argued that now that the building has been assessed at over $3 million, the city is trying to take the building for about $200,000 in property arrears without any equity given to the tenant/owners.
The city attorneys countered that the tenant/owners were behind on their property taxes and had ample time to pay them. But Partnow noted that the tenants have made payments in good faith to the city – and that they payments were never applied to the property.
Partnow implored the city to make some kind of settlement agreement with the tenant/owners to allow them to keep their property, but the city attorneys refused, saying it would set a bad precedent for other property owners on the foreclosure list.
Partnow said he could not force the city attorneys to agree to some kind of settlement, and was not concerned with the other properties on the list, but with the case before him.
Similarly, Partnow is set to make a decision in regard to the 19-unit building at 25 MacDonough Street, which the city has taken under the TPT program with no compensation to the black family which owned the property for 50 years.
In this case, Partnow requested the Department of Finance to explain how the owners actually signed an agreement to pay the back taxes and made payments on the property that were never recorded. Partnow also urged the city to come to a settlement agreement with the property owners, which the city refused to do.
Johnson said she expected the city to appeal the case, should Partnow rule against the city. It is sad that working-class property owners must pay all kinds of legal fees to keep their property and that the city is refusing to come to a good faith settlement.
Johnson also noted that State Attorney General Letitia James has taken an interest in the third party transfer cases. She also indicated there is strong case-law that points to the city taking the properties illegally as they don’t meet the definition of distressed properties.
This property at 19 Kingsland is in immaculate condition and does not meet the definition of a ‘distressed’ property, she said.
