Slate sues lawyers for allegedly giving bad advice on how to evict Section 8 tenants

Developer claims it overpaid for 222-224 West 21st Street thinking it could boot poor residents

Martin Nussbaum, David Schwartz and 222-224 West 21st Street
Martin Nussbaum, David Schwartz and 222-224 West 21st Street

UPDATED, Nov. 18, 6:01 p.m.: Slate Property Group sued its former attorneys for allegedly giving them bad advice on how to evict Section 8 tenants at two Chelsea rental buildings.

According to the complaint, Martin Heistein and Joseph Burden of Belkin, Burden, Wenig & Goldman told Slate that the development firm could get rid of federally subsidized low-income tenants at 222-224 West 21st Street by giving them 30 days notice. Based on that assumption, Slate paid $16.75 million for the buildings in 2014 with plans to kick out the tenants, renovate the apartments, add extra rooms, and jack up the rent.

But two Section 8 tenants managed to block eviction by suing Slate in federal court. “Plaintiff not only overpaid for the Buildings at the time they were purchased, but incurred additional and unnecessary legal fees, lobbying and public relations expenses in an effort to undo the damage caused by Defendants’ faulty advice,” the complaint reads. Last week, Slate sold the two buildings for $29.5 million. The firm claims it would have sold them for $2.4 million more if it had been able to kick out the Section 8 tenants and renovate their apartments. Slate seeks at least $2.4 million in damages.

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In September 2014, State Sen. Brad Hoylman and Council member Corey Johnson joined a tenants’ rally against “unconscionable harassment” by Slate at the building, according to Chelsea Now.

Slate declined to comment. The company has been in the news lately for its role in the Rivington House nursing home sale. Mayor Bill de Blasio alleged that the firm intentionally kept City Hall in the dark over the deal. In August, Slate left the Bedford Armory affordable housing development in Crown Heights amid public pressure.

“Although it is not appropriate for us to discuss on-going litigation, we are confident that our advice and work product adheres to the highest ethical and legal standards,” a spokesperson for Belkin, Burden, Wenig & Goldman told TRD.

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