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
“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
“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
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,”
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
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
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
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
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