The following is from the EVG inbox via Tenants Taking Control ...
A festive group of holiday carolers from the TTC (Tenants Taking Control, formerly the Toledano Tenants Coalition) visited the Midtown offices of Madison Realty Capital on Monday morning. But the songs they sang were much more ironic than celebratory.
"Madison is Coming to Town" was sung to a familiar tune, but featured such lyrical enhancements as "♫ They’re making a loan ♪ They’re raising the price ♪. They’re funding a landlord who’s not very nice ♫ Madison is coming to town ♪"
In 2015, Madison Realty loaned $124 million to Rafael Toledano, a 25 year old with no track record as a landlord and a conviction for aggravated assault, so that he could buy a "portfolio" of 15 buildings in Manhattan, mostly in the East Village.
Through demolition that generated lead dust, outright neglect of the properties, aggressive buyout offers and threatened lawsuits, Toledano removed about a third of the 450+ rent-regulated tenants from those buildings before defaulting on Madison's loan and then facing foreclosure in February 2017.
On Monday, the group of remaining tenants also sang "I Had a Little Landlord" (to the tune of "I Have a Little Dreidel"). One verse went: "♪ I had a little landlord ♫ He bought the place one day ♪ He got a check from Madison ♫ And then he couldn’t pay! ♪"
The LLCs once controlled by Toledano staved off the foreclosure in March 2017 by each declaring bankruptcy. Through bankruptcy court, control of the buildings was given over in April to Silverstone Properties, the property management arm of... Madison Realty Capital. If you think that sounds kind of circular, you're not alone. It's a bit like singing a round.
In May 2017, the New York State Attorney General's office filed a massive objection (PDF here) and declaration, accusing Madison Realty Capital of practices “Consistent with a Predatory ‘Loan to Own’ Business Model.” The filings dissected the striking irregularities of the deal. Among other oddities, it references...
• "fatal flaws" in the underwriting of the loan, as evaluated by the NYC Department of Housing Preservation and Development. • clear evidence that Signature Bank (an investor in the loan) foresaw that Toledano would default, and that Madison was well positioned to take over the properties.
• floor plans for the apartments that show newly-added, windowless bedrooms, which are illegal in NYC.
Bankruptcy court hearings regarding the case have been repeatedly postponed by Madison since the AG and the DHCR's Tenant Protection Unit publicized through its filings that the ongoing investigation of Toledano had been expanded to include Madison.
On Monday morning in Midtown, Santa Claus himself made an appearance. He had a special gift for the principals of Madison: Gift-wrapped little sacks of coal. Bellowing loud enough to (possibly) be heard on the 37th floor, he pronounced that the company had been naughty.
Previously on EV Grieve:
Amid claims of being a rent-stabilized tenant, Raphael Toledano faces eviction from his home
Foreclosure notice arrives on Raphael Toledano-owned building on 12th Street
Claim: Landlord of 444 E. 13th St. threatened 'to drop dynamite on the building'
Cleaning up 444 E. 13th St.
Report: State investigating East Village landlord Raphael Toledano
Health Department to inspect Raphael Toledano's East Village properties for toxic levels of lead dust
Foreclosure notice arrives on Raphael Toledano-owned building on 12th Street
Report: Raphael Toledano files for Chapter 11; $145 million deal for EV portfolio is off the table
Raphael Toledano tenants take to Midtown streets to speak out against their landlord and his lenders
East Village tenants pay landlord Raphael Toledano a visit at his Upper West Side home
