Tenants suing Pinnacle get 40 percent off
April 17, 2009 01:10PM By Sarah Ryley
668 Riverside Drive
Eight rent-stabilized tenants who sued ubiquitous landlord Pinnacle Group for shoddy living conditions at its Riverside Drive condominium conversion are now buying apartments there at a 40 percent discount under a recent negotiation with the landlord, said the tenants' attorney.
The attorney, Adam Leitman Bailey, said judges commonly award victorious tenants in such cases with rent credits of around 10 to 20 percent for each month of living under a state of disrepair.
Instead, the case was withdrawn after Pinnacle, owned by Joel Weiner made an out-of-court agreement to let all tenants in the building buy their apartments for 40 percent less than the "free market" price listed three months ago when the agreement was made, along with a $1,000 down payment.
"I told them this is an excellent opportunity to own an apartment," Bailey said.
In addition, he said Pinnacle has made most of the 45 repairs at 668 Riverside Drive that were listed in the lawsuit, which was filed last summer, and is in the process of completing the rest.
"Pinnacle always disputed that there were any hazardous conditions as set forth in the lawsuit," said Kenneth Fisher, an attorney for Pinnacle. "The upshot was that some repairs were done by Pinnacle and some money was put into a reserve fund so that the condo association could make the repairs themselves."
Fisher added, "Getting a discount on the apartments was more than what they would have gotten in court, because they might have gotten nothing."
The agreement could be viewed as a win-win for Pinnacle, given the difficulty of selling properties in Upper Manhattan. Transactions there dropped up to 90 percent since the previous quarter, according to Streeteasy.com. In an effort to lure buyers, numerous brokers have said they are slashing prices, and must accept offers even below the discounted asking price to close the deal.
But Amy Casey, a Barak Realty sales associate marketing apartments in 668 Riverside Drive, at 144th Street, said 40 percent off is a good deal.
She said Pinnacle is making deals on the building's market-rate units,
"but they're not dropping prices 40 percent, that's for sure."
"It was a very respectful and fruitful dialogue and price negotiation with Mr. Bailey and his clients," Weiner said through Fisher.
The building is one of at least seven in the area that Pinnacle has controversially sought to convert from rent-stabilized into market-rate condo. The conversion is a non-eviction plan in which apartments are renovated and marketed for sale as tenants vacate them.
Two apartments have closed in the 64-unit building, including the first discounted tenant sale, a 582-square-foot one-bedroom for $141,120. Besides the other discounted tenant sales, Casey said four more are in contract.
Five are on the market for between $195,000 for a 315-square-foot studio and $579,000 for an 844-square-foot two-bedroom.
While the apartments she's marketing are gut renovated, including all new electric wiring and plumbing, the ones bought by tenants were not, although Bailey said "any necessary repairs that were requested" by the tenants were made.
Pinnacle is one of the city's largest landlords, having purchased hundreds of apartment buildings this decade, including 104 from landlord Baruch Singer for more than $500 million in 2005. Recently, the company has been shedding some of its portfolios.
Pinnacle is also named in a high profile, federal lawsuit that alleges the company engaged in unlawful eviction practices in an effort to boot tenants from 5,000 of its 21,000 apartments citywide. Pinnacle's attorney Fisher said that suit is still pending.
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Comments
Anonymous
Selling apartments to current rent stabilized tenants? Pinnacle is the winner at the end.. Once the building is converted, those pathetic rents wont even cover the operating expenses and taxes that the sponsor (pinnacle) would be required to pay.. He lucked out
Comment #1 Posted By: Anonymous 04/17/09
Anonymous
40% off of what asking price, a realistic one or one that Pinnacle will have to negotiate down 20% from just to unload the units? Also, take into account that they are not fully renovating these units which could account for as much as 10-20% of the value when the other offerings are listed. This settlement might really only translate to a loss in potential profit that Pinnacle might have made if those units had been renovated and sold to the public and not an actual price reduction. In this market I think they would rather boost the percentage sold in the building in order to move things along than make a few bucks more! Smart move on Pinnacle’s part.
Comment #2 Posted By: Anonymous 04/17/09
Anonymous
How does this attorney Adam Lietman Baily keep getting this mega discounts? I live in 20 Pine Street and he got a group in our building 40% off and got a free month's rent and a freeze on rents in the Manhattan House for the tenant's association.
Comment #3 Posted By: Anonymous 04/17/09
Anonymous
#3 First of all these are not great deals. 40 percent off is probably market rate. Second, he has a huge ego and is so persisitent they make these deals to get off the developer's back. Third, he uses the press, governmental officials and the courts as his tools. My company was on the other side of one of these deals and he makes it look like he is a hero but in reality the developer wins.
Comment #4 Posted By: Anonymous 04/17/09
Anonymous
#4 What are you smoking--all of the deals above were probably negotiated many months ago since it takes at least three months to close. Back then 40% off is hero worship. Bailey does it by picking his cases carefully--he is expensive and only takes cases where he see an angle and it does not hurt that he is charming and at the same time an animal negotiator.
Comment #5 Posted By: Anonymous 04/17/09
Anonymous
Hero worship? An animal negotiator? #5 wouldn't happen to be the man in question, would it?
Comment #6 Posted By: Anonymous 04/17/09
HanaLee
#7. What law firm do you work for?
Comment #7 Posted By: HanaLee 04/17/09
Anonymous
Number 6 where do you live?
Comment #8 Posted By: Anonymous 04/17/09
Anonymous
Having sold units in those condos there and having seen them, I'd say the tenants got a good deal, and pinnacle did a good job too..a mutually beneficial meeting of the minds
Comment #9 Posted By: Anonymous 04/17/09
Anonymous
At least deals are closing in this article. We all should be rooted them on as we try to jump start the economy. Makes deals. Discount. Go NYC.
Comment #10 Posted By: Anonymous 04/17/09
Anonymous
40% off? He can be as huckster as they come.
Comment #11 Posted By: Anonymous 04/17/09
Anonymous
Adam Leitman Bailey is a notorious landlord lawyer who delights in forcing out tenants. Just look at his web site.
Comment #12 Posted By: Anonymous 04/18/09
Anonymous
From Wikipedia, the free encyclopedia "Medicine man" or "Medicine woman" are English terms used to describe Native American healers and spiritual figures.
Comment #13 Posted By: Anonymous 04/18/09
Anonymous
Not just a landlord lawyer but known as an extremely aggressive one that has emptied buildings full of SRO tenants.
Comment #14 Posted By: Anonymous 04/18/09
Anonymous
At least Bailey negotiated with Joel Weiner instead of spending his client's money and years suing and getting them nothing.
Comment #15 Posted By: Anonymous 04/18/09
Anonymous
Anyone stop to consider how these closings will drive the price per foot and price per unit down in Harlem (and Manhattan). With so few transactions closing today having a building like this close 10 or so units in a quarter will move the averages. These closings will make the market appear worse than it actually is. It will take prices down 50% or so. Just as the numbers were skewed up by the "Uber-luxury" condos they will now be skewed down by these rent stabilized non-renovated units.
Comment #16 Posted By: Anonymous 04/18/09
Anonymous
#18 Good point. I wonder how many closings happen per quarter in Manhattan?
Comment #17 Posted By: Anonymous 04/18/09
Anonymous
I hate condo's. I hate Lawyers. I am rent control. I am legend.
Comment #18 Posted By: Anonymous 04/18/09
Anonymous
Those tenants got a rotten deal. Shame on Bailey and on Pinnacle. Both are notorious for stealing from people who don't have much to begin with. How can they look at themselves in the mirror? They are no better than Madoff who is the scumbag's scumbag.
Comment #19 Posted By: Anonymous 04/19/09
Anonymous
According to the article: 1. Only 1k was needed for the downpayment. 2. The buyers got 40% off. 3. The buyers, former tenants got their repair issues resolved. 4. We do not know how much Bailey got paid. Madoff, really. Rotten deal?
Comment #20 Posted By: Anonymous 04/19/09
Anonymous
I remember the Zeigelman group from the 80's who co-oped about 200 buildings (across the city) to be co-oped with many tenants forsaking their rent regulated status to become homeowners. Most purchasers were low to middle income earners and these buildings were located in mostly minority neighborhoods. Within about 5-7 years "each" and "every one" of these Co-op buildings FAILED/DEFAULTED and purchasers lost (1)their money, (2)their neighborhoods and (3)their apartments as defaults and foreclosures collapsed these co-ops. This Weiner Condo scheme is a mere repeat performance designed to oust middle-income minorities from the communities they inhabit by selling them a sack of 'do-do' under the false illusion of home ownership of broken, old, decrepit, buildings that are 80-90 years old with dilapidated, buildings (plumbing, electrical, elevator, heating etc). Weiner and Zeigelman are cut from the same cloth and are vicious 'entrepreneurs' preying upon workers black,brown and lower class whites and are no better than predatory lenders and their ilk. Like Zeigelman, Weiner probably has a bank or three willing to participate in this latest real estate scam (designed to divest people of their rent regulated status under the guise of 'home ownership'). Buyers beware!
Comment #21 Posted By: Anonymous 04/20/09
Anonymous
number 18, youre a douche, but you already know this
Comment #22 Posted By: Anonymous 04/22/09
Anonymous
#21 That is right...how are these people going to afford the assesments that will come down the road, because the building has a faulty roof, bad elevators, electrical problems etc. These people cannot really afford the financial responsibilities of this kind of home ownership. Even if some of them can, the building has to become a sum of it's parts. I think that most people cannot afford the repairs of an antique, and this will always keep the property un- desirable and probably not solvent. I think the deal sounds like a wolf is sheep's clothing.
Comment #23 Posted By: Anonymous 04/23/09
Anonymous
#21 You obviously have been around, your post is excellent. Many Ziegelman wannabees bought in Washington Heights in the late 80's, expecting to convert these crappy buildings to coops and failed miserably as the market tanked. Now Joel Weiner is trying this same idea. Sell crappy apartments in crappy buildings needing millions in structural repairs, and get the hell out of Washington Heights and back home to Great Neck with these poor people's cash. Joel Weiner is just another scumbag.
Comment #24 Posted By: Anonymous 04/29/09
Anonymous
Why were shoddy and dangerous conditions allowed to persist in a building that was occupied and under conversion? Why were complaints and violations not addressed in a reasonable or timely manner? Who approved the conversion plan? Where was the Attorney General's office during this conversion?
Comment #25 Posted By: Anonymous 05/06/09
Anonymous
PINNACLE HAVE ALWAYS IS GIVEN RENTERS A HARD TIME
Comment #26 Posted By: Anonymous 05/08/09
Anonymous
Where the hell have some of you learned ENGLISH???!!!
Comment #27 Posted By: Anonymous 05/14/09