The Real Deal New York

Judge halts UWS condo conversion pending fraud probe

AG investigating Newcastle Realty for allegedly failing to offer tenants the right to buy their units

January 13, 2015 09:30AM

From left: Margaret Streicker Porres and 101 West 78th Street

From left: Margaret Streicker Porres and 101 West 78th Street

The developer of a condo conversion on the Upper West Side has been forced to pause construction after allegedly forcing the rent-regulated tenants out of the building without offering them the option to buy their units.

New York Attorney General Eric Schneiderman will continue an investigation into Newcastle Realty Services, according to DNAinfo. The conversion in question is a 44-unit rental building at 101 West 78th Street. Newcastle bought the building for $85 million in 2012.

While the company, lead by Margaret Streicker Porres, initially said it wouldn’t do any major construction at the building, the developer later filed plans to renovate and combine apartments. The firm also allegedly pushed tenants to accept buyout offers before they could review the conversion plan and didn’t offer them the chance to buy their apartments, which is illegal.

“In attempting to clear the building of tenants to make a conversion easier and more lucrative, these developers violated the law and stripped tenants of their rights,” Schneiderman said in a statement. 

“These developers violated the law and stripped tenants of their rights.”- AG Schneiderman

Only 10 tenants remain in the building, according to the website.

Until the investigation is finished, Newcastle must halt construction, as well as condo sales and any potential removal of tenants. [DNAinfo]Claire Moses

  • Two Piece and Biscuit

    Total amateur! I wonder if she filed her plan before she began vacating tenants? Does she know what warehousing is? Did the AG look into if she had less than 90% of the units occupied before filing the plan?

  • John

    A very expensive mistake.

  • Mike

    She is no amateur. She has been doing this for a long time. In fact, she is a pro. I remember touring a townhouse she was converting in Chelsea about 10 years ago. The whole building was gutted except for one unit on the 3rd floor of a walk up. The unit was inhabited by a mentally disabled guy.

  • BH

    i’d hit it

  • Charles Dale

    More GREED, try to kick out the present tenants so you can covert to condos to make MORE money. If some tenants can’t afford to move or have no where else to go, oh well, at least you are making MORE money.

    We have made money our god and money does not care about where it goes or who has it. More BS in the world in which we live.

    Build AFFORDABLE housing for the median income for New York City which is $51,100 a year. That is what the city TRULY needs.

    • Edward Johnson

      read the article again – she tenants agree to cash buyouts – the tenants were happy – what do you have against happy tenants?

      • Charles Dale

        I am not trying to be rude but you need to read the article again.

        “after allegedly forcing the rent-regulated tenants out of the building without offering them the option to buy their units. The firm also allegedly pushed tenants to accept buyout offers before they could review the conversion plan and didn’t offer them the chance to buy their apartments, which is illegal. “In attempting to clear the building of tenants to make a conversion easier and more lucrative, these developers violated the law and stripped tenants of their rights,” Schneiderman said in a statement.”

        These are not happy tenants.

        • Edward Johnson

          You’ve allowed the bias of the author to skew your views. These tenants have rights. They did not have to agree to these buyouts. They knew their rights and several of their neighbors chose not to take the money and keep their rights to their apartments.
          Note that in the article there is not one quote from a tenant who took the money. Why? Because they are happy and it didn’t fit the narrative of this smear piece to speak with them.
          The tenants had a cheap rent for decades. Then they got huge payments to move. They didn’t have to take the money. They didn’t have to sign the contracts. This article is garbage. I don’t feel sorry for people who got cheap rent for decades and then got paid tens of thousands of dollars to move. I’ve moved 5 times in the last 15 years. It’s not that big of deal and in many respects it’s actually pretty invigorating.
          Further, Schneiderman’s statements are garbage.

          • Charles Dale

            “New York Attorney General Eric Schneiderman will continue an investigation into Newcastle Realty Services, according to DNAinfo.”

            I want to see what the investigation finds. There has to be something in order for the investigation to have started in the first place.

            “While the company, lead by Margaret Streicker Porres, initially said it wouldn’t do any major construction at the building, the developer later filed plans to renovate and combine apartments.”

            If true, the company, lead by Margaret Streicker Porres did something that they said they wouldn’t do.

            “Until the investigation is finished, Newcastle must halt construction, as well as condo sales and any potential removal of tenants. [DNAinfo] — Claire Moses”

            We shall see what this investigation finds.

            Note, that in the article, there is not one quote from any of the 10 tenants still there. They could have used quotes from any of them if this was a smear piece to back up claims that the remaining tenants feel the company went back on their word of not doing any major construction at the building and how the company tried to force them out to.

            Most people that I know who have moved, tell me it is a pain in the butt. Packing everything, the cost of the move, hoping the moving company does not lose, damage or hold up delivering the furniture by requesting a higher price then that was quoted and agreed upon. Also, people that I know who have received tens of thousands of dollars to move say that the cost of the move, plus the significantly higher rent or purchase price of where they are moving to, eats up that money in no time and it is then hard to afford the new rent or maintenance charge of their new place since they were paying a cheap rent but that was all they could afford so how can they now pay double or more for all the years they need to live in this new place. There are people in my building complex which is 30% rental, 70% co-op where seniors, who have lived in the same apt. for 30 years or more and are still rent stabilized, are also on SCRIE and are paying $600-$700 a month for a 1 bedroom with gas and electric included located in Rego Park Queens. They only get Social Security and their fixed income is around $1,200 a month with very little savings. Even if they were to receive tens of thousands of dollars to move, where would they go? Their income alone would disqualify them from moving just about anywhere in the 5 boroughs. I have lived in this building since 1975 and see several tenants in this 3 building complex that fit this description.

          • Monica McLaughlin

            According to the law, tenants must be made aware of their rights. Failure to inform tenants of their rights is a violation of their rights.

      • comment flagged

        Correct me if I am wrong, but I think the issue is that she should have issued them offering plans before or while she was offering them buy-outs.

    • BH

      you cannot build developments for people who make less than the median income in the city. what about everyone who falls below or above that? you just give favor to those with moderate earnings?

      • Charles Dale

        I am trying to be fair. I used the median income for New York City because that is what half of New York City residents make or less. Since there are approx. 8 million people New York City, that means approx. 4 million New York City residents make $51,100 or less. I figure if you make affordable housing for those New York City residents, the ones who make more would be able to afford housing for median income earners also. Yes, New Yorkers who make less than the median need affordable housing also. I want affordable housing in New York city for people who make the median income or below. People who make more, would be able to afford that to.

        • hey

          i understand what you are saying, and your point has some validity.

          the fact is with the price of land no developer would see creating lower income housing as a profitable business, and you can’t provide enough incentives for them to even consider multiple projects.

          they can never create enough units. For Hunters Point South in Long Island city they received 25,000 applications in the first week.

          • Charles Dale

            It’s a shame that the median income is considered lower income when half of all NYC residents make that amount and less. 4 million people out of 8 million is no small number. When a city can not build affordable housing for half of its residents who make a certain income, you have a problem and this is happening in San Diego, Seattle, Washington DC and here in NY. The median income for the United States is slightly above $50,000 a year for an individual so housing in NewYork, San Diego, Seattle, Washington DC and other places is really not financially affordable for half the residents of the United States. That is approx. 200 million people (half of the approx. 400 million population of the US.) By financially affordable, I use the rule that finical planners say you should use to find what housing is affordable and the rule is 30% of your income for housing. I know people are using at least 40-50% and more of their income for housing but there is your problem. At $51,100 you would look for an apt. that rents for $1,200 a month or a mortgage of approx. $183,484 (using a mortgage loan calculator with $51,100 yearly salary in the calculator.

        • hey

          why aren’t you wearing a shirt?

          • Charles Dale

            I took that pic in the summer when it was warm and I wanted to add a pic for my profile. I was sitting at my desk without a shirt on and used my webcam.

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