The city this week is expected to close on a $173 million deal to purchase 17 buildings and convert them into affordable housing. But watchdogs and public officials say the deal raises questions about conflicts of interest and a lack of transparency.
The de Blasio administration opted to buy the buildings in Brooklyn and the Bronx two years ago from the Podolsky brothers, two landlords with a long record of violations who are currently under federal investigation for tax fraud. And the lawyer who represented them in the portfolio sale to the city is Frank Carone, is a longtime de Blasio ally and fundraiser.
Initially, the total value of the buildings was estimated at about $50 million, the New York Times reported. A private appraiser later estimated it at $143 million. City officials said the price rose during the course of negotiations with the Podolsky brothers, who run Amsterdam Hospitality Group.
Amid the negotiations, Caron donated the maximum $5,000 to the mayor’s federal political action committee, Fairness PAC, which he’s using to explore a presidential run. Heading in to the closing of the deal, Carone also solicited other donors. Both de Blasio and Carone said they had not discussed the real estate deal.
City comptroller Scott Stringer wrote to the mayor’s office in March, asking to see the appraisals but was told that the city’s policy was not to release them — because the information could affect future negotiations.
The mayor’s press secretary, Eric Phillips, said de Blasio’s ties to Carone didn’t influence the deal.
“This deal is about improving and securing affordable homes for 2,000 people,” Phillips said in a written statement. “The personal political activity of one of the many lawyers involved never entered into the equation.”
Referring to the mayor, he added, “They’ve never spoken about any details of the deal.”
Carone, a lawyer at Abrams Fensterman and counsel to the Brooklyn Democratic Party, said that it made sense for him to represent the Podolskys because he had known the “family for more than 30 years.”
For years, hundreds of the apartments in the Podolskys’ buildings have been used by the city to house homeless families, as part of the porous and controversial cluster-site program. Under the deal, nonprofit groups will convert them to permanent affordable housing and own and operate them. [NYT] — Meenal Vamburkar