The Real Deal New York

These East Village landlords are working their buildings the hardest

Steve Croman filed twice as many alterations per unit owned as any other landlord in the area

June 10, 2016 07:00AM
By Ariel Stulberg and Will Parker

Alteration intensity data table

Source: TRD analysis of DOB data and other public records for the East Village since 2012

Some multifamily landlords buy and hold, gradually stacking up income from their properties, making repairs as problems arise — or never at all. Others – whether they aim to upgrade their buildings, divide or combine units or, sometimes, for different reasons – are more active.

The Real Deal dug through alteration filings with the city’s Department of Buildings, seeking to determine which landlords filed the most permit applications relative to the number of units they own in the East Village.

By far the most aggressive fixer-upper was Steve Croman of Croman Real Estate and 9300 Realty, who since 2012, filed for 165 alteration permits across his 517 neighborhood units — a strike rate of about 32 percent. Croman, who owns at least 27 buildings in the East Village according to TRD’s analysis of public records, was arrested last month on charges including grand larceny and tenant harassment.

According to a lawsuit brought by New York Attorney General Eric Schneiderman, Croman allegedly coerced “countless” numbers of tenants out of their homes, which allowed him to renovate the units and up their value. DOB filings show that there’s about one alteration application for every three apartment units he owns.

But, let’s be clear: The data doesn’t indicate whether units intended for alteration were vacant or occupied. And it’s likely many of the filings were merely for repairs on existing units. Some fillings, in fact, weren’t for units at all, but for public spaces.

A spokesperson for 9300 Realty said the majority of Croman’s apartments in his East Village portfolio are market-rate — though TRD couldn’t independently verify this claim. The spokesperson added that “construction affects our market-rate residents the same as it affects our rent-stabilized residents, so the allegation that we perform this work to harass rent-stabilized residents is counterintuitive. The fact is that we take great pride in the maintenance and upkeep of our properties and such upkeep requires periodic renovation and repair work. Contrary to the allegations, we feel that we would be negligent if we didn’t perform such work to upkeep our buildings.”

Other East Village landlords with a high alteration strike rate include Mark Scharfman’s Scharfman Organization, which owns about 4,000 units citywide, according to TRD’s analysis of public records. The company filed 19 alteration permits at its 118 East Village units since 2012, a rate of about 16 percent.

Jared Kushner’s Kushner Companies, which has acquired a sizable portfolio in the neighborhood since 2012, also made the top five. It filed 77 alteration permit applications and owns at least 522 units in the neighborhood. Raphael Toledano’s Brookhill Properties, which owns about 400 units in the East Village, was fourth on the list and filed 53 alteration permit requests.

Both Kushner and Toledano have been accused of trying to force out tenants at East Village properties in the past. In 2014, tenants alleged that Kushner Companies was forcing them out at 170 East Second Street in order to carry out luxury renovations, the New York Daily News reported. At least nine apartment alterations from that address appear in the data. As for Toledano, a judge last year ordered him to stop interior construction at 444 East 13th Street, where he settled a tenant harassment case just this May. Several unit alteration applications were filed by Toledano at the building up through 2015.

Emily Goldstein, an organizer at the Association for Neighborhood and Housing Development, an affordable housing advocacy group, believes any correlation between a high rate of renovations and harassment allegations may be more than coincidence.

“I think it raises a red flag,” she said. “I think absolutely an unusual rate of alt filings is cause for concern.”

But landlords emphatically rejected such characterizations of renovation work. In a statement to TRD, a spokesperson for Kushner’s Westminster Management said “we consistently invest in our properties across our walk-up portfolio and always work to deliver the highest level of customer service for our residents.” And a spokesperson for Toledano’s firm said “Brookhill is proud of the work we have been doing to upgrade housing units that we own and we believe that tenants are enjoying benefits of living in some of the most modern, safe and comfortable rental housing in New York City.”

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