Facing mounting repair costs, seven Brooklyn and Harlem churches put their faith in New York developer Moujan Vahdat to buy their sites and build projects that included space to worship.
Then word broke that the deals were rigged.
Vahdat paid a few AME church leaders, unbeknownst to congregants, so he could redevelop the properties, according to the state attorney general’s office. And he didn’t always deliver, in one case ejecting a church from its lease and shutting off heat and electricity while dismissing complaints about a collapsing sanctuary ceiling.
Attorney General Letitia James’ office investigated the transactions and settled with Vahdat and two church leaders last year, although it did not post the news on its website until last month.
In total, three church leaders got about $2 million from Vahdat, according to the AG’s office. Patch first reported the settlement, prompting the AME’s Council of Bishops to rebuke the paid-off clergy. A third pastor has been fighting the allegations in state court.
The scandal served as an unfortunate introduction to Vahdat for many in the New York real estate industry, although he has been quietly buying and selling buildings in the city for nearly four decades.
Who is Moujan Vahdat?
Vahdat is a relative unknown in the industry. His development firm, Elmo Realty, has a minimalist LinkedIn page — it lists five employees or board members, four named Vahdat — but no website. Few of his deals ever appeared in trade publications before the church scandal surfaced.
But the story of Vahdat’s rise is a familiar one in New York real estate annals. Born in Iran, Vahdat immigrated to the United States in 1964 at age 12. His first jobs included mopping floors and washing dishes in Elmhurst, Queens, according to a source.
“He grew up as an unbelievably poor kid,” his daughter, Saba Vahdat, told a Cornell University publication in 2017.
In the mid 1980s, Vahdat saw an opportunity to break into the telecommunications space as the industry was deregulated. With a $40,000 investment, Vahdat started I.T.C., an international telephone business, which he eventually exited in 1996.
Vahdat also began his real estate ventures in the mid ’80s, acquiring his first property in Harlem.
From its office in the Empire State Building, Vahdat’s family-run Elmo Realty has bought and sold over 75 properties and owns and manages over a dozen, focusing on multifamily and affordable housing throughout New York, according to Elmo’s LinkedIn page. His daughter and son, Shawn Vahdat, are its president and vice president, respectively.
“The reason I work hard is because of him,” Saba Vahdat said in the Cornell interview. “I have so much opportunity that to not take advantage of it would be a disservice to him.”
While Vahdat has not done any media interviews, some articles, including a 2015 Real Estate Weekly story, call him a billionaire. The Real Deal could not independently verify the claim, and Elmo’s spokesperson declined to provide additional information.
However, Vahdat does own a palatial, 9,000-square-foot waterfront estate in the tony community of Great Neck, property records show.
Prior to the church deals, one of Vahdat’s largest acquisitions was a shuttered hospital in Pelham Bay. He paid $5 million for the Bronx site but his plans to build luxury apartments fell through. He then proposed a facility to house low-income adults with chronic health conditions, which drew concern from local residents.
“They’re trying to pull the wool over our eyes,” said one neighborhood activist, according to the Daily News.
The site now houses a 90-unit residence that provides short-term or permanent supportive housing.
Vahdat’s church ventures began in 2013. His initial plan was to buy ailing church sites and build multifamily developments while setting aside space for a new church center.
Vahdat was introduced to Kevin Griffin, a pastor at Childs Memorial COGIC, through a real estate broker who knew the pastor’s wife. In 2014, Vahdat and Griffin reached a deal to sell the Childs Memorial Church on Amsterdam Avenue.
Vahdat paid Griffin a finder’s fee to locate additional church properties from 2015 to 2017.
Vahdat was also introduced to Bishop Gregory Ingram, a leader in the AME Church, and Rev. Melvin Wilson, and secretly paid them for deals as well. Ingram was also given a Rolex. The fees were not disclosed to church members or to the attorney general, which must approve property sales by religious institutions. Under New York law, religious institutions are required to disclose related party transactions to the attorney general.
In 2016, the Childs Memorial COGIC transaction closed. As part of the deal, Empire Development Fund, an entity connected to Vahdat, paid $50,000 to the pastor’s wife.
The attorney general began looking into the matter in 2018, as church leaders grew concerned about the projects’ lack of progress. In 2021, Vahdat settled with James without admitting or denying wrongdoing.
As part of their settlement, Wilson and Ingram are required to return what Vahdat paid them.
James gave the churches four options: They could cash out; have the developer rescind the deed; have him proceed with an independent construction monitor; or opt out of the settlement.
Six of the seven churches choose the third option, while St. John AME cashed out for $1.3 million, according to Patch.
Vahdat’s deals are hardly the first between New York City churches and developers that have run into trouble. In 2019, a historic Harlem church, St. Luke Baptist Church, sued Azimuth Development and its founder Guido Subotovsky, claiming its deal with the developer was “wrought with fraud, misrepresentations and misconduct” and that Azimuth took advantage of the church’s “unsuspecting nature and charitable parishioners.” The lawsuit was discontinued last year.
But other development deals worked out for the houses of worship. For example, Hope Street Capital’s 29-story apartment project at Atlantic and Vanderbilt avenues, the Axel, allowed for the restoration of the adjacent Church of St. Luke and St. Matthew, which provided air rights in the deal.
DNAinfo wrote in 2014 that more than 20 historic churches had been converted into residential buildings in Brooklyn’s “brownstone belt” in the previous 20 years. Some of those enabled the religious institutions to stay afloat.
The Elmo spokesperson issued a statement that said in part, “We are grateful to the churches for reaffirming their decision to work with the developer and their continued trust in the developer’s ability to rehabilitate properties that have been in disrepair for years.”