PUBLISHED BY MOSHOLU PRESERVATION CORPORATION

Vol. 18, No. 21 Nov. 3 - 16, 2005



     
 

Investor’s Tactics Worry Tenants

By HEATHER HADDON

A landlord who recently acquired dozens of Bronx buildings has a track record of aggressively raising rents, suing tenants to recoup extra fees, and evicting people, according to residents.

Joel Wiener, a large city investor, purchased over 30 buildings in the Bronx over the past year, including eight in the local area, as the Norwood News documented issue. Back in 2002, Wiener also purchased seven former Mitchell Lama buildings in Riverdale, Pelham and Williamsbridge, according to news and industry reports. The Pinnacle organization, which Wiener heads, manages all of the properties.

Tenants of the former Mitchell Lama buildings were initially encouraged when Pinnacle took them over and made a number of major capital improvements (MCIs). But the situation deteriorated within a year after the deal. Many tenants now accuse Wiener of saddling them with extra fees and exorbitant renovation costs.

“It’s really ridiculous,” said Joseph Brown, 50, an Olinville Avenue tenant. “He’s very aggressive in trying to get more money.”

All residents were slapped with a $40 air conditioner fee, as documented in rent receipts obtained from several tenants. Then there were additional parking charges. Recently, $25 carbon monoxide detectors were installed, and now Pinnacle wants to replace the apartment doors in some of the Olinville Avenue properties.

“I don’t want a new door,” said Brown, standing next to his solid entryway. “They’re just trying to get more MCIs.”

Landlords can pass off a fraction of expenses for MCIs, such as a new roof or boiler, onto tenants in the form of increased rent. It seems that Wiener is abiding by the legal percentage, but tenants charge that the cost of the original items are significantly inflated. “He’s not stupid, just greedy,” said Hazel Miura, a housing specialist for the Neighborhood Initiatives Development Corporation, an east Bronx nonprofit that is helping the Olinville tenants.

Pinnacle did not return calls for comment.

Miura researched how much new closet doors would cost after they were installed in one apartment. The doors and hardware at Home Depot were under $200. Pinnacle put the total bill at $1,000, according to Miura.

Pinnacle does an extensive makeover on vacated apartments, including new kitchens, bathrooms and floors. Those costs are also figured into the rent, and Miura said the expense total has gone as high as $25,000. “What he says he spends on renovations is so outrageous,” she said.

Pinnacle took several tenants to court in 2002 to recoup the extra fees, as stated in Bronx Civil Court records. Rappaport, Hertz, Cherson and Rosenthal, a Queens firm specializing in housing disputes, represented Wiener. An attorney who tried the cases refused to comment.

Pinnacle is part of a new crop of investors who seek to quickly profit from their properties by making repairs, raising rents and selling them, as documented in a 1999 Crains article. Jonathan Bowles, who heads the Center for an Urban Future, a progressive think tank, has observed this trend in Brooklyn neighborhoods. “Beginning in the late ‘90s, there are countless stories of investors buying buildings and flipping them more than one time,” Bowles said.

Wiener purchased the properties in conjunction with the Praedium Group, an investment fund that capitalizes on undervalued real estate. Since 1994, the company has funded the acquisition of hundreds of commercial and residential properties, including 210 in New York state, according to its Web site.

A Praedium spokesperson said the company doesn’t comment on specific assets.

Their Web site, however, is telling. The company purchases “properties that are ‘broken’ and can in turn be fixed and then sold upon stabilization,” it states. Broken properties are identified as those that fail to “aggressively manage the current tenant/leasing base.” Solutions include “strategic capital improvements and proactive leasing.”

The local buildings are on DeKalb Avenue, East Gun Hill Road, East 196th Street, Sedgwick Avenue, West 190th Street and Botanical Square, according to city Department of Finance records. They were purchased as part of a 51-building, $200.5 million deal that included properties in Harlem and Washington Heights, according to the New York Post and financial industry reports.

Pinnacle has made many improvements to the local properties, including new doors, entryways and lighting. The lobby was renovated at 2304 Sedgwick Ave. during the summer, according to a tenant, and last week was clean and well-lit. Security cameras and a new door were installed over at 6 W. 190th St.

Stephanie Diallo, a resident of 60 E. 196th St., said Pinnacle did some work on the building’s exterior, but nothing on the inside. She’s more concerned about rumors concerning the rents. “I could not stay if they raised the rents,” she said. “I don’t know where else I would go.”

Some residents are already facing that reality. Alice Marx, a tenant of a University Heights building on Cedar Place, says she was recently told by Pinnacle that her lease will not be renewed. “I pay my rent every single month,” said Marx, 49. “I’ve never been a problem.”

The Bowery Residents’ Committee, a nonprofit serving the homeless, disabled and ill, has housed clients in private Bronx apartments since 1994. After Pinnacle purchased four properties accommodating their clients, Marx and several other residents were told that their leases would not be renewed next year. One man with a current lease was already forced out, according to Alice Jordan, a Bowery program director.

“All of the client’s stuff was just put out on the street,” she said.

Bowery is taking the issue to court, and Jordan is currently trying to locate new apartments for her clients. “It’s just short of a nightmare,” she said.

Miura is also looking to take legal action, and is creating a newsletter to distribute to prospective tenants about Wiener’s practices. “He thinks he’s above the law,” she said.

Jordan Besek contributed to this story.


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