The Real Deal New York

Tenants rally to protest “predatory” equity deal

The Harlem tenants are planning a rent strike and asking the city to intervene
April 27, 2014 10:00AM

 A group of several dozens tenants, elected officials, and tenant advocates held a rally Friday in front of a former Mitchell-Lama apartment building to demand a better investment deal for their Harlem homes.

Currently about 100 tenants at the two 35-story towers known as Schomburg Plaza and the Heritage, located at 1295 Fifth Avenue and 1660 Madison Avenue, are planning a rent strike due to poor conditions in their apartments, problems with management and what tenants are calling a “predatory” equity deal.

The controversy stems from a 2005 trade, in which Mitchell Lama sold the buildings to private equity firm Cammeby’s International for just under $300 million. In 2007, New Jersey-based landlord Urban American Management purchased the portfolio for $918 million, which included a $700 million mortgage originated by Deutsche Bank, as well as a large investment by the City Investment Fund. The second sale tripled the debt on the projects overnight, according to a release from Tenants and Neighbors, a New York State tenant collation.

Many city employed tenants are angry that the City Investment Fund, which is supported by New York City and New York State pension funds, used their own pensions to back the deal. Now tenants are calling for the city to intervene on their behalf. – Christopher Cameron