Showing posts with label Raphael Toledano. Show all posts
Showing posts with label Raphael Toledano. Show all posts

Tuesday, February 1, 2022

Notorious East Village landlord Raphael Toledano faces 5-year real-estate ban

[5th Street buildings that were part of Raphael Toledano's portfolio

New York Attorney General Letitia James announced a court victory yesterday against notorious East Village landlord Raphael Toledano. 

An order by the New York Supreme Court bars Toledano from engaging in any New York real-estate business activity for at least five years, at which point he can petition the court for re-entrance.

Per a release from the AG's office:
This decision comes after Toledano repeatedly violated a 2019 agreement with the Office of the Attorney General (OAG) that required him to stop harassing New York City tenants and stop engaging in illegal and predatory real-estate practices. 
"New York tenants can breathe more easily knowing that Rafi Toledano is no longer in the real estate business," said James. "Through his deceptive and illegal actions, Toledano caused incredible pain and suffering to hundreds of vulnerable families, who are still feeling the effects of his harassment today. Every New Yorker deserves to live in a safe, decent home free of abuse and fear."
Here's some of what James found from her previous investigation:
" ... established that Toledano engaged in a pattern of fraudulent and illegal conduct throughout his work as a landlord and real estate developer. Toledano harassed tenants in the East Village through coercive buyouts and illegal construction practices, and failed to provide his rent-regulated tenants with utilities, repairs, and other necessary services. 
Toledano also engaged in deceptive business practices in his real-estate transactions, including repeatedly and persistently misrepresenting himself as a lawyer and advertising apartments with three or four bedrooms, when legally the apartment could have one or two bedrooms only."
The AG's office outlined how Toledano violated his 2019 agreement: 
  • Failing to disclose his real-estate business activities to the independent monitor or to get the monitor's approval for further deals 
  • Diverting funds from a reserve account established by the agreement 
  • Failing to make penalty payments (other than initial payments totaling $520,000) 
  • Failing to maintain his properties in a manner that complied with applicable laws and protected tenants' rights, health, and safety.
It's not immediately clear how many properties Toledano still owns. 

Last May, Madison Realty Capital (MRC) closed on Toledano's bankrupt East Village portfolio. Toledano had received $124 million in cash and lines of credit from MRC to finance his $97 million purchase of the buildings. 

Toledano purchased 28 buildings in two separate portfolios from the Tabak family for a total of $140 million in 2015. Experienced real-estate players raised red flags about Toledano's heavy reliance on debt.  

In an interview with The Real Deal in June 2016, Toledano, then 26, made "frat-tastic boasts about his wealth," including: "I'm worth a fuckload of money, bro."

Sunday, May 16, 2021

EVG Etc.: The fate of Raphael Toledano's bankrupt EV portfolio; the free fitness classes on Avenue B

• In $153 million deal, Madison Realty Capital closes on Raphael Toledano's bankrupt East Village portfolio (The Real Deal ... previously on EVG

• A long read on the reconstruction plans for East River Park (Curbed

• Mayor de Blasio signs Open Streets bill into law (amNY ... previously on EVG

• New Yorkers on the CDC's new mask guidelines (Gothamist

• An East Village-focused look back at the pandemic's darkest days (The Nation

• The new show at the Housing gallery on the LES pays tribute to Steven Cannon, founder of the East Village-based A Gathering of the Tribes (Hyperallergic ... previously on EVG

• A list of the free fitness activities on the Open Streets of Avenue B (Instagram ... flyer

• Joyface reopened on Avenue C and Seventh Street this past week (Instagram

• Rough Trade's new NYC home — after seven years in Williamsburg — will be in Rockefeller Center (Official site

Photo of a familiar car around the neighborhood from Sixth Street between Avenue C and Avenue D

Wednesday, December 16, 2020

NY AG: Madison Realty Capital to pay more than $1 million for victims of fraud and tenant harassment

The legal fallout from Raphael (Rafi) Toledano's brief yet soul-crushing stint as an East Village landlord continues.

Yesterday, New York Attorney General Letitia James announced an agreement that secures more than $1 million in rent credits for harassed tenants and provides housing placements for 10 homeless families. 

The agreement with private equity firm Madison Realty Capital comes after James found that the company aided and abetted tenant harassment and other fraud by Toledano.

"Today's agreement stands up for all the tenants harassed and pushed out of their homes by a fraudulent landlord and the lender that financed his unlawful operation," James said in a statement. "Madison Realty Capital aided one of our city's worst landlords in his unlawful scheme, but we're holding the company to account and delivering real relief to the many victims through rent credits and housing placement."

Here's more of the background and current narrative via the AG's office:

With the financial backing of Madison Realty Capital, Toledano harassed tenants through coercive buyouts; executed illegal construction practices; and failed to provide tenants with utilities, repairs, and other necessary services. 

Even with this track record, in 2015, Madison Realty loaned Toledano over $100 million to purchase a 15-building portfolio in the East Village, despite his limited experience in managing a portfolio of this size, evidence of prior tenant harassment, and plans to continue to vacate rent-stabilized tenants and renovate units in violation of law.

Attorney General James’ investigation found that Madison Realty Capital knew or should have known of Toledano’s history, that the proposed conversions were unlawful, and that the aggressive schedule for buyouts and renovations was likely to result in tenant harassment. 

As a result of the loan that allowed Toledano to take over management of the East Village Properties, Toledano did exactly that — harassing hundreds of tenants, engaging in dangerous construction practices, and failing to provide basic services. In March 2017, the East Village properties filed for bankruptcy.

Under the terms of this agreement — which also resolves claims filed against Toledano’s former business entities in New York bankruptcy court — Madison Realty Capital must now take ownership of the 15 buildings in the East Village portfolio subject to $1.05 million in rent credits. 

These rent credits will be shared among the remaining tenants who suffered through Toledano’s mismanagement of these properties. The owners of the buildings will also ensure placement of 10 formerly-homeless families and will adhere to tenant health and safety protections during construction there. 

Under the settlement agreement with the AG's office, Madison wasn't required to admit wrongdoing.

"We are pleased to have resolved this matter without admitting or denying any of the allegations raised, and will continue to work with the tenants and community stakeholders to continue to improve the buildings and bring positive change to the community," a spokesperson for Madison said in a statement obtained by The Real Deal.

In June 2019, James announced a settlement with Toledano to put an end to his harassment of tenants and to prevent him from engaging in speculative real-estate deals designed to profit by violating New York's rent-stabilization laws.

In previous years, Toledano purchased 28 buildings in two separate portfolios from the Tabak family for a total of $140 million. Experienced real-estate players raised red flags about Toledano's heavy reliance on debt.

In an interview with The Real Deal in June 2016, Toledano, then 26, made "frat-tastic boasts about his wealth," including: "I’m worth a fuckload of money, bro."

Previously on EV Grieve:
• Tenants call out Madison Realty Capital: Stop warehousing rent-regulated apartments

• Report: Raphael Toledano files for Chapter 11; $145 million deal for EV portfolio is off the table 

Thursday, June 18, 2020

Report: These 12th Street residents are going on 5 months without gas for cooking



A handful of residents at 327 E. 12th St. between First Avenue and Second Avenue have not had any gas for cooking since February, the Daily News reported.

The article focused on longtime building resident Georgina Christ.

[She] hasn’t been able to use her stove since February. And for her, that means no home-cooked bone broth — and more trips to the grocery store for provisions at a time she’d rather stay in.

"It makes me have to go out more," said the 70-year-old, who's lived on the fifth floor of a sixth-story walk up since 1971. "I find I'm having to walk in the middle of the street to avoid people who are drinking and hanging out on the sidewalk without face masks."

Christ and at least four other tenants are without cooking gas.

Last week, local elected officials — Sen. Brad Hoylman, Congresswoman Carolyn Mahoney, Manhattan Borough President Gale Brewer, Assembly Member Deborah Glick and City Council Member Carlina Rivera — sent a letter to the building's management, Silverstone Property Group.



The letter reads in part:

The provision of reliable gas service is a crucial responsibility for property management companies and landlords regardless of the circumstances, but especially during the ongoing pandemic. Additionally, four of these tenants fall squarely within the demographics proven to be most vulnerable to COVID-19, and it is wrong to require them to continually risk exposure to the virus simply to secure meals.

We strongly urge Silverstone Property Group to restore gas service to these tenants as soon as possible and provide them with a 15% rent abatement, standard for diminution of services of this kind, for the period of time that they have been without gas service. These are stressful, difficult times for everyone, and these tenants shouldn’t have to worry about how they will be able to cook their meals on top of the other burdens that so many tenants are currently facing.

Silverstone did provide hot plates, though they reportedly aren't too functional.

A Silverstone spokesperson told the News that they are "ready, willing and able to repair the gas lines at the property as soon as possible."

However: "In order to do so, the property must be vacated according to engineering experts Silverstone has consulted."

Christ said that she is skeptical, and thinks this is "a ploy to empty the building and jack up rents."

No. 327 was among the many East Village properties that disgraced landlord Raphael Toledano owned at one point during his local building grab. He had been accused of harassing rent-stabilized tenants in a bid to vacate and deregulate units in them.

In 2017, a subsidiary of lender Madison Realty Capital took over the portfolio. As of January, Toledano was still mired in bankruptcy proceedings with Madison Realty Capital, per reports.

The listing at Streeteasy describes the building this way:

Most units have been gut-renovated with innovative and luxury finishes. Our design team works to create a rustic/modern look to appeal to a vast array of tastes and lifestyles. 327 East 12th Street is a building combined with beautiful high ceilings that provide an abundance of natural light and fresh air into each residence. Amazing Features Include:

•Wall-mounted 40 inch flat screen TV and soundbar pre-installed in every residence
•Washer and Dryer in every residence
•Ambiance-setting light dimmers

A sister property at 325 E. 12th St. has also suffered cooking-gas blackouts.

Wednesday, January 22, 2020

Report: Half of the units in Raphael Toledano's former East Village portfolio remain vacant

Nearly three years have passed since Silverstone Properties, a subsidiary of Madison Realty Capital (MRC), took control of disgraced landlord Raphael Toledano's 15-building portfolio in the East Village.

As The Real Deal reported yesterday, due to drawn-out court proceedings, a bankruptcy plan has yet to be executed for the buildings. According to Met Council, a tenants’ rights group, half of the 279 units have been “warehoused” since 2016. Per TRD: "The portfolio includes 226 rent-stabilized apartments, according to tax filings."

This past December, Tenants Taking Control — the group formerly known as the Toledano Tenants Coalition — reported that there were 136 vacant apartments across the 15-building portfolio. At the time, the group called on MRC to sell the 15 buildings to a nonprofit preservation buyer.

In comments to TRD, an MRC spokesperson blamed Toledano for the delay, saying, “The owner of the properties demolished the vacant units a few years ago and therefore the vacant units are not habitable at this time.” She said that Madison still does not own the properties despite the foreclosure in 2017.

In June 2019, Attorney General Letitia James announced a settlement with Toledano to put an end to his harassment of tenants and to prevent him from engaging in speculative real-estate deals designed to profit by violating New York’s rent-stabilization laws.

The AG's investigation established that Toledano engaged in a pattern of fraudulent and illegal conduct throughout his work as a landlord and real-estate developer. He harassed tenants through coercive buyouts, illegal construction practices and failed to provide his rent-regulated tenants with utilities, repairs and other necessary services, according to the AG's office.

Toledano had received $124 million in cash and lines of credit from MRC to finance his $97 million purchase of the buildings.

Previously on EV Grieve:
Tenants call out Madison Realty Capital: Stop warehousing rent-regulated apartments

Report: Raphael Toledano files for Chapter 11; $145 million deal for EV portfolio is off the table

Friday, December 20, 2019

Tenants call out Madison Realty Capital: Stop warehousing rent-regulated apartments



More than 50 residents, community activists and local elected officials gathered on Tuesday afternoon in the rain outside 325 E. 12th St., a building owned by Madison Realty Capital (MRC) that serves as a de-facto office for MRC’s property management arm, Silverstone Properties.

The group, led by Tenants Taking Control (formerly known as the Toledano Tenants Coalition), called on MRC to sell their 15 buildings to a nonprofit preservation buyer.

They also wanted to bring attention to the practice of property owners letting rent-regulated apartments sit vacant in the aftermath of the Housing Stability and Tenant Protection Act of 2019.

According to the tenants, there are 136 vacant apartments across the 15-building portfolio, which has a total of 279 units. (MRC took control of the portfolio from disgraced landlord Raphael Toledano in the spring of 2017.)



"It is unconscionable to keep these apartments empty, when affordable housing is so rare," said TTC member Beth Carey.

"We have persevered for four long years — enduring an onslaught of insincere buyout badgering, construction as harassment, elevated lead dust, vermin infestations, and unfair lawsuits," said Sandra Mayer, a TTC tenant. "We have watched our friends and neighbors be picked off one by one until these once vibrant buildings stood dark and quiet. This community of working-class families and artists should not lose its spirit. It is our goal to bring back a solid base of rent-stabilized housing in the East Village."

Joining the tenants were several community groups and elected officials, including members of the INK Tenants Coalition, Cooper Square Committee, Lead Dust Free NYC coalition, St. Nicks Alliance, Good Old Lower East Side, United Neighborhood Organization (UNO), Manhattan Borough President Gale Brewer, Assemblymember Harvey Epstein, Assemblymember Deborah Glick, Sen. Brad Hoylman and City Councilmember Carlina Rivera.


[Sen. Hoylman]


[Assemblymember Glick]



Photos courtesy of the Cooper Square Committee.

Previously on EV Grieve:
Health Department to inspect Raphael Toledano's East Village properties for toxic levels of lead dust

Ongoing concerns about demolition work and elevated lead levels in Toledano-owned buildings

Tenant activists praise lead reform, urge for more protections from city against predatory landlords

Petition asks Madison Realty Capital to waive legal fees for evicted East Village family

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

Santa delivers sacks of coal to Madison Realty Capital, Rafael Toledano's lenders

Friday, June 21, 2019

Raphael Toledano to pay $3 million, faces possible lifetime real-estate ban, for harassing EV tenants

New York AG Letitia James yesterday announced a settlement with notorious East Village landlord Raphael Toledano to put an end to his harassment of tenants and to prevent him from engaging in speculative real-estate deals.

Let's go right to the news release via the AG's office...

Under the terms of the Consent Order (stipulation and judgement) being submitted to the Court, Toledano’s real estate business will be supervised by an Independent Monitor, who will ensure that Toledano ceases to engage in fraud and tenant harassment. Toledano will not be allowed to have any direct contact with tenants, and will be required to hire an independent management company for any of his properties.

In addition, Toledano has agreed to pay $3 million in damages and penalties. If Toledano violates the terms of his agreement, then Attorney General James will seek a lifetime bar against any further participation in the real estate industry, as well as a suspended judgment of $10 million.

Attorney General James and Governor Cuomo’s Tenant Protection Unit (TPU) within New York State Homes and Community Renewal began investigating Toledano after receiving complaints from tenants and community advocates about his use of harassment, unsafe construction, and other illegal conduct to push tenants out of their rent-stabilized homes.

As set forth in the Complaint filed in New York Supreme Court, Attorney General James’ investigation established that Toledano engaged in a pattern of fraudulent and illegal conduct throughout his work as a landlord and real-estate developer.

He harassed tenants through coercive buyouts, illegal construction practices and failed to provide his rent-regulated tenants with utilities, repairs, and other necessary services. Toledano also engaged in deceptive business practices in his real-estate transactions, including repeatedly and persistently misrepresenting himself as a lawyer and advertising apartments with 3 or 4 bedrooms, when legally the apartment could only have 1 or 2 bedrooms.

It's not immediately clear how many properties Toledano still owns. (His Brookhill Properties website is no longer active.) Toledano, who bought up dozens of East Village properties only to foreclose on many of them later, is still the owner — via an LLC — of 444 E. 13th St. between Avenue A and First Avenue.

In March, he reportedly filed for bankruptcy on the building, and was attempting to reject the rent-stabilized leases for a number of residents in the building, per NBC 4. However, AG James and several housing officials from the city and state intervened to help the tenants.

In previous years, Toledano purchased 28 buildings in two separate portfolios from the Tabak family for a total of $140 million. Experienced real-estate players raised red flags about Toledano's heavy reliance on debt.

In an interview with The Real Deal in June 2016, Toledano, then 26, made "frat-tastic boasts about his wealth," including: "I’m worth a fuckload of money, bro."

Previously on EV Grieve:
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

Thursday, March 28, 2019

97 2nd Ave. is for sale — again


[Photo via LoopNet]

The 6-story building between Fifth Street and Sixth Street has returned to the sales market.

First, here's more from the pitch:

The 10,948 square foot building (approx.) contains 10 residential units and one retail unit. Currently, of the 10 apartments, eight are free market and two are rent stabilized.

69% of the property’s income is derived from the residential component and 31 percent from the ground floor retail. The 10 residential apartments comprise 9,123 SF of the building’s gross square footage and are made up of two, three, and four bedroom units. The retail tenant on the ground floor is a restaurant currently paying $249,142 annually.

Asking price: $14.5 million.

This building is notable for being the source of a legal tussle between Raphael "I will bury you" Toledano and developer Michael Shah.

During a hearing in November 2017, a federal judge tossed a bankruptcy case filed by Toledano, ending his bid to stop the sale of 97 Second Ave. to Shah’s Delshah Capital, The Real Deal reported at the time.

Both landlords were claiming ownership of the building. It's a little complicated. Read the Real Deal piece here for the full blow by blow.

According to the documents filed by Shah, Toledano allegedly told him, "I will bury you, literally. I will bury this building and make sure of it."

However, it was never buried, and now awaits another owner. Toledano reportedly lost control of the property when he defaulted on a $2-million loan.

No. 97 was one of the first East Village properties purchased by Toledano. Public records show that Toledano paid $4.95 million for it in April 2014.

Previously on EV Grieve:
Claim: Landlord of 444 E. 13th St. threatened 'to drop dynamite on the building'

Report: Threats made in ongoing battle over 97 2nd Ave.

Thursday, March 14, 2019

Report: New York Attorney General intervenes to stop eviction of tenants in Raphael Toledano-owned building on 13th Street


[Photo at No. 444 from May 2015 by Stacie Joy]

Updated to include the Gothamist post.

Landlord Raphael Toledano is still causing grief for East Village residents.

The controversial landlord, who bought up dozens of East Village properties only to foreclose on many of them later, is still reportedly the owner — via an LLC — of 444 E. 13th St. between Avenue A and First Avenue.

According to published reports, Toledano filed for bankruptcy on the building, and is attempting to reject the rent-stabilized leases for a number of residents in the building, as NBC 4 first reported.

Per Gothamist, Toledo/the LLC is asking for a bankruptcy court to terminate the tenants' leases, on the grounds that a proposed $8.2 million sale of the property can't go through while the rent-stabilized leases are in place. (The Gothamist piece has a lot of good details not reported elsewhere.)

Now, however, New York Attorney General Letitia James and a handful of housing officials from the city and state have intervened to help the tenants, eight of whom have been withholding rent due to inadequate heat, broken or defective plumbing, garbage in the hallway and rodents, as Patch noted. (The NYC Department of Housing Preservation and Development website lists 68 outstanding violations.)

James and the housing officials joined in an action in the United States Bankruptcy Court for the Southern District of New York on behalf of tenants at No. 444. Here's more via a media advisory from the AG's office:

Both the City and State are opposing the building owner's application to reject tenants' leases, an application that is a thinly-veiled attempt to flout rent regulation laws and displace tenants.

"Bankruptcy Court should not be used as a tool to unjustly oust rent-stabilized New Yorkers from their homes," James said. "In filing this motion, my office is working to ensure that the tenants are not displaced. Housing is a right, and we will continue to use every legal tool available to stand up for tenants and to enforce their rights."

Local City Councilmember Carlina Rivera pointed out Toledano's ugly past as a landlord.

"The owner of 444 East 13th St. has spent years illegally harassing the tenants living in these rent-stabilized apartments, and this legal maneuver is just the latest shady tactic to remove these long-time New Yorkers from their homes," she said in a statement. "Bad actors across New York need to be put on notice — our government is in the business of protecting and expanding rent-regulated apartments, and I certainly will not sit idly by while harassment takes place in my District."

James and Rivera both took part in a rally outside 444 E. 13th St. yesterday, as PIX 11 reported.



This is the address where many people first heard about the twentysomething Toledano. In the spring of 2015, tenants at No. 444 accused Toledano, and a management company he reportedly hired (then later fired), of harassment and intimidation.

There are tape recorded conversations where a rep for Goldmark Property Management reportedly said, among other things to a rent-stabilized tenant: "I'm here, really, to help you. Because if it were up to the owners, they would just drop dynamite on the whole building and everyone would figure it out."

(The Times published the audio recordings here... Gothamist posted them here.)

In May 2016, Toledano agreed to pay a little more than $1 million to settle claims that he harassed the tenants, according to The Real Deal. The Times reported that most of the the tenants are "low-wage workers of Mexican descent who pay modest rents for the neighborhood and have lived in their building for decades."

In previous years, Toledano purchased 28 buildings in two separate portfolios from the Tabak family for a total of $140 million. Experienced real-estate players raised red flags about Toledano's heavy reliance on debt, per The Real Deal.

Previously on EV Grieve:
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

Friday, November 30, 2018

Tenant activists praise lead reform, urge for more protections from city against predatory landlords



On Tuesday, members of the Lead Dust Free New York City coalition marched through parts of the Lower East Side and East Village, stopping at three buildings — 113 Stanton St., 57 Second Ave. and 233 E. Fifth St. — "where shoddy renovations have released lead dust into the air."

The group, including organizers from the Cooper Square Committee and Icon Tenants United, Tenants Taking Control and the Alliance of Croman Tenants, also praised elected officials for introducing laws aimed at protecting them and urged them to continue pushing for more lead reform.











Here's more background via a news release from the Cooper Square Committee...

Known collectively as the Stand for Tenant Safety (or STS) Laws, they included a new, Real Time Enforcement statute, as well as a tenant bill of rights that must be posted in buildings where construction takes place. They also created a new position within the Department of Buildings, called the Office of the Tenant Advocate.

This year, the City Council is looking at 25 more new bills to further protect tenants from lead exposure. The thrust of some of these bills is to break down the silos that current separately the Department of Health & Mental Hygiene, the Department of Buildings and the Department of Housing Preservation and Development.

Marchers demanded that these laws also be enacted to further prevent the erosion of affordable housing in New York City.

As in other cities around the United States ... New York is being inundated by a hyper-gentrification tsunami that has been permanently pushing middle- and lower-income tenants out of their homes. Some landlords, hungry for quick returns, continue to pursue the practice of predatory equity, which worsens the city’s affordable housing crisis. These same landlords typically ignore safe work practices while renovating their buildings.



All photos courtesy of Tenants Taking Control

Previously on EV Grieve:
Health Department to inspect Raphael Toledano's East Village properties for toxic levels of lead dust

Ongoing concerns about demolition work and elevated lead levels in Toledano-owned buildings

Get the lead out: Tenants call for protections from lead dust during renovations

Friday, September 28, 2018

East Village residents ask Madison Realty Capital to 'See the Light'



In the rain on Tuesday evening, members of Tenants Taking Control, a coalition of residents from buildings formerly owned by Raphael Toledano, along with the Middle Church Jerriese Johnson Gospel Choir and the Cooper Square Committee, held a march and vigil to urge Madison Realty Capital (MRC) to end their pursuit of nearly $250,000 in legal fees from the SmithStone family.

The congregation of activists, clergy, and community members assembled on Union Square and later marched to 24th Street, where the group held a candlelight vigil outside the apartment of MRC’s co-founder and managing principal Josh Zegen, urging him to release the family from the responsibility of paying the corporation's legal fees.

Here's background on the situation via the Cooper Square Committee:

In October 2003, the SmithStone family moved into an apartment at 233 E. Fifth St. They opened the nonprofit Phoenix Theatre Ensemble a year later. Their theatre offers a full season of performances as well as lessons in theatre to aspiring actors, seniors and kids in local public schools.

Their building was purchased by Raphael Toledano in 2015, with a loan from Madison Realty Capital. The fledgling landlord asserted that the family’s apartment had lost its rent-stabilized status in 2003 and sued to retake possession of the unit, but the family opposed Toledano’s claim, arguing that the apartment was rent stabilized. The legal battle lasted 34 months. In the midst of it, Toledano defaulted on his loan. Madison Realty Capital reclaimed the properties as de-facto landlord and continued prosecuting the lawsuit.

In June 2018, the Appellate Division of NY State Supreme Court ruled against the family, and Madison Realty Capital immediately began eviction proceedings. Due to a clause in their lease, the SmithStones are now being held accountable by Madison's lawyers for Toledano/Madison Realty Capital's legal fees, amounting to about $250,000. As dedicated artists and educators with 3 college-age children, these fees would be disastrous to the family.

Here are a few scenes from Tuesday's march and vigil...

















This is the second SmithStone rally for the group. On Aug. 23, Tenants Taking Control, supporters of the family and Assemblymember Harvey Epstein also gathered outside Zegen’s home, calling on Madison to drop their pursuit of the legal fees.

The court date to decide whether the family is subject to these fines was adjourned until early November.

Photos via the Cooper Square Committee.

Previously on EV Grieve:
Petition asks Madison Realty Capital to waive legal fees for evicted East Village family

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

Santa delivers sacks of coal to Madison Realty Capital, Rafael Toledano's lenders

Amid claims of being a rent-stabilized tenant, Raphael Toledano faces eviction from his home

Wednesday, August 15, 2018

Petition asks Madison Realty Capital to waive legal fees for evicted East Village family


[5th Street buildings that were part of Raphael Toledano's portfolio]

After a lengthy legal battle that started with landlord Raphael Toledano, longtime East Village residents Craig Smith and Elise Stone and their family have been evicted from their rent-stabilized apartment on Fifth Street.


[Smith, Stone and family]

With Toledano in bankruptcy, Madison Realty Capital is the de-facto landlord. Due to a clause in their lease, Smith and Stone are now being held accountable by Madison's lawyers for Toledano/Madison Realty Capital's legal fees, which amount to $250,000.

This petition is asking Madison Realty Capital, who reportedly manages over $4 billion of capital, to waive their legal fees.

The following, via the EVG inbox, is from the group Tenants Taking Control...

In July of 2018, Craig Smith and Elise Stone, their three college-age children Kerem, Tes and Hakima, and Elise's ageing mother Sandy were given 12 days to leave their home of 15 years — a walk-up apartment in the East Village.

Craig and Elise — much can be said about this extraordinary couple. They are parents, thespians, teachers and artists who have spent a lifetime giving to their community. Notably, they started up a local, award-winning, nonprofit theater company in 2004 that, in addition to producing shows, runs educational programs for aspiring actors, children and seniors.

The SmithStones were sued for eviction in 2015 by their new predatory landlord, Raphael Toledano, whose lawyers spotted a loophole in the city's rent-stabilization law. Rather than give up, Craig and Elise fought back. Their motivation was not just self-preservation — in keeping with their community spirit, they aimed to protect other New York City rent regulated tenants who face similar gentrification pressures. Had they won, thousands of deregulated apartments in the city could have been re-regulated.

The legal battle lasted 34 months. In the midst of it, Toledano defaulted on the loan he'd gotten from Madison Realty Capital to buy their building (along with 14 others). Although still owned by Toledano's LLC, in the bankruptcy Madison Realty Capital became the de facto landlord of the buildings, put up the money to manage the properties, and continued prosecuting the lawsuit.

In June of 2018, the Appellate Division of NY State Supreme Court ruled against Craig and Elise. Madison Realty Capital told them to leave their home, and NYC lost yet another affordable apartment. The loss to the neighborhood has been devastating.

Due to a clause in their lease, the SmithStones are now being held accountable by Madison's lawyers for Toledano/Madison Realty Capital's legal fees, amounting to $250,000. As dedicated artists and educators, this couple does not have that kind of money.

THIS PETITION ASKS MADISON REALTY CAPITAL TO DO THE RIGHT THING AND PAY ITS OWN LEGAL COSTS.
It is a private investment fund, so its earnings and revenue are not publicly disclosed. But last month, Madison's CEO Josh Zegen told The Commercial Observer: "We manage over $4 billion of capital and we have every piece of the business in-house." It's likely that they can afford their own legal fees, and still be a very profitable business.

In the same interview, there was this exchange:

COMMERCIAL OBSERVER: "What keeps you up at night?"

JOSHUA ZEGEN: "The unknown. You’re starting to really feel the rate creep more than you did six to nine months ago..."

So, the TTC (Tenants Taking Control) asked the same question of the SmithStones.

TTC: "What keeps you up at night?"

CRAIG SMITH: "Bankruptcy. No money to pay for my kids' college, no money to pay for a dentist, long commutes... the fear that we won't be able to keep the theater going, and no longer be able to show seniors and children the joy of being involved in the arts."

This family is in a precarious situation now, and really needs the help of the greater community. They have already lost their home. Please add your name to this petition, to have Madison Realty Capital relieve the SmithStones of the crushing, unfair debt burden they will otherwise face.

Here's the link to the petition.

Previously on EV Grieve:
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

Santa delivers sacks of coal to Madison Realty Capital, Rafael Toledano's lenders

Amid claims of being a rent-stabilized tenant, Raphael Toledano faces eviction from his home

Thursday, March 15, 2018

Thoughts on Raphael Toledano: 'The dude was imploding'

The Commercial Observer has a Q&A with Michael Shah, who runs East Village-based Delshah Capital, which boasts "a diverse portfolio of New York City real estate assets approaching $1 billion in value."

The interview touched on a variety of topics, including Delshah Capital's recent deals to scoop up "commercial mortgages and particularly debt that is nonperforming or on properties that have slipped into bankruptcy."

That's when the conversation turned to Raphael Toledano, who quickly established himself as a terrible landlord in the East Village.

To the Observer's Q&A:

[T]hose deals have also earned you enemies like landlord Raphael Toledano, who allegedly said he would “bury you” after you bought the note on his building at 97 Second Avenue. What did you make of that? [In November 2017, a federal bankruptcy court judge dismissed a lawsuit filed by Toledano seeking to block Shah’s acquisition of the property.]

The dude was imploding, and it was pretty clear vultures were going to pick his carcass dry, and I wanted to be one of them. From the time Madison Realty Capital made the loan [a $124 million mortgage on Toledano’s acquisition of a 16-building East Village portfolio], it wasn’t a question of if he was going to default — it was when.

I don’t really know how anybody in their right mind believed [Toledano] was going to out-litigate us; he’s not very litigation-savvy. I think it was a lot of noise and press — he’s a colorful guy.

Before we did the deal, we had analyzed the litigation risk and knew how a bankruptcy would end, and it played out exactly how we planned. [Note: Toledano and his firm, Brookhill Properties, could not be reached for comment.]

Previously on EV Grieve:
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'

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

East Village tenants pay landlord Raphael Toledano a visit at his Upper West Side home

Wednesday, November 8, 2017

Report: Judge dismisses Raphael Toledano suit over 97 2nd Ave.

During a hearing on Monday, a federal judge tossed a bankruptcy case filed by Raphael "I will bury you" Toledano, ending his bid to stop the sale of 97 Second Ave. to Michael Shah’s Delshah Capital, The Real Deal reports.

Both landlords were claiming ownership of the 11-unit building between Fifth Street and Sixth Street. It's a little complicated. Read the Real Deal piece here for the full blow by blow.

According to the documents filed by Shah, Toledano allegedly told him, "I will bury you, literally. I will bury this building and make sure of it."

The 6-story building was one of the first East Village properties purchased by Toledano. Public records show that Toledano paid $4.95 million for it in April 2014.

Toledano reportedly lost control of the property when he defaulted on a $2 million loan.

Previously on EV Grieve:
Claim: Landlord of 444 E. 13th St. threatened 'to drop dynamite on the building'

Report: Threats made in ongoing battle over 97 2nd Ave.

Thursday, September 21, 2017

A celebration of tenant groups this weekend



On Saturday, the Middle Collegiate Church is hosting a Tenant Empowerment Conference.

Here are the details via the EVG inbox...

The goal of the conference is to celebrate all of the great work that's been done by tenant groups in New York City over the past few years.

We will also discuss the most effective means for tenants to assert their rights in the face of misbehaving landlords, rapacious developers and greedy banks.

In attendance will be tenants who have confronted predatory equity-practicing landlords (ie., Steve Croman, ICON Realty, Renaissance Properties, Jared Kushner, Samy Mahfar, Raphael Toledano, Madison Realty Capital etc.), as well as affordable housing advocates, local small business owners who are being threatened, local press, elected representatives and other interested parties from all over the city.

The conference will last from 10 a.m. until 2 p.m. There will be a welcome address and a keynote speaker. There will be three panel discussions, run sequentially.

Tenant power packs, continental breakfast and lunchtime sandwiches will be provided to attendees.

The TTC (The Tenants Coalition, formerly the Toledano Tenants Coalition) and Cooper Square Committee are the co-hosts. The Middle Collegiate Church entrance is at 50 E. Seventh St. between First Avenue and Second Avenue.

Here's a slide show that that the groups put together ... showing some of what tenant organizations in the city have done in the past two years:

Tuesday, September 19, 2017

Final date set for Clayworks Pottery on 9th Street

Last month, Helaine Sorgen announced that she was closing Clayworks Pottery after 44 years at 332 E. Ninth St. between First Avenue and Second Avenue.

"My building has been bought by a predatory landlord who will not renew my lease," she said at the time. "It's been over a two-year fight, and the time has come to close up shop." (You can read her closing letter here.)

At the time, she was unsure of her closing date — some time around Sept. 15.

Sorgen provided an update on Facebook this past weekend:

"I am sad to report that my court ordered last day at Clayworks will be September 30th. However, the exorbitant amount of money judgment levied against me doesn't quite make up for the extra week. Still, it gives me the opportunity to see many of you again and share memories and say goodbye. I look forward to seeing you all before Clayworks closes forever."

Jeremiah Moss interview Sorgen for a post that you can find here.

Storefront photo from 2009 via Facebook

Friday, September 15, 2017

Amid claims of being a rent-stabilized tenant, Raphael Toledano faces eviction from his home


[Photo outside Toledano's apartment building from May]

The Real Deal has the story:

Hyperkinetic landlord Raphael Toledano, whose alleged methods in evicting tenants from rent-stabilized apartments made him enemy number one of the New York City tenant movement, faces eviction at his $13,800 a month Upper West Side home, where he claims to be a rent-stabilized resident, court records show.

Some local reaction:

“This has got to be a joke, right?” said SaMi Chester, a tenant organizer at the Cooper Square Committee who actively works with tenants in Toledano’s buildings; they frequently claim they are being harassed by the 27-year-old landlord. “Here’s a guy who’s built his career on screwing over rent-stabilized tenants. Now he’s doing that?”

And some background:

Toledano, who recently filed for bankruptcy on a portfolio of multifamily buildings in the East Village amid claims he was overleveraged, essentially operated a real estate business whose model depended on vacancy deregulation to crank up rent rolls.

Read the whole Real Deal story here.

According to public records, Toledano is scheduled to appear in New York County Civil Court, 111 Centre St., Monday morning at 9:30. (The Court part is called F, Room 830.)

Previously on EV Grieve:
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

Thursday, September 14, 2017

Report: Threats made in ongoing battle over 97 2nd Ave.

Raphael Toledano continues to build his impressive tapestry of quotable quotes in his tenure as an East Village landlord.


His latest keepsake soundbite came during the ongoing battle over 97 Second Ave. between Toledano and Michael Shah’s Delshah Capital. Both landlords are claiming ownership of the 11-unit building. (It's complicated.)

The Real Deal has all the details about the legal drama here.

In August ... Toledano filed for Chapter 11 bankruptcy protection on the property and tried to procure a buyer. According to court documents filed by Shah, Toledano also used that time to threaten and extort him. Toledano threatened to instruct the tenants to withhold rent, according to the documents, and told Shah, “I will bury you, literally. I will bury this building and make sure of it.”

The 6-story building between Sixth Street and Fifth Street was one of the first East Village properties purchased by Toledano. Public records show that Toledano paid $4.95 million for it in April 2014. Toledano said in the bankruptcy protection filing that the property is valued at $15.1 million, per the Commercial Observer.

As for the status of Tolednao and his other neighborhood properties, The Real Deal reported:

The 27-year-old landlord is awaiting approval for the sale of the deeds of 15 distressed East Village properties to lender Madison Realty Capital, which recently replaced him as property manager on the buildings.



Previously on EV Grieve:
Claim: Landlord of 444 E. 13th St. threatened 'to drop dynamite on the building'

Monday, August 28, 2017

Saying goodbye to Clayworks Pottery after 44 years on 9th Street


[Storefront photo from 2009 via Facebook]

Late last week, Helaine Sorgen made official what had been a poorly kept secret among her customers — Clayworks Pottery is closing after 44 years at 332 E. Ninth St. between First Avenue and Second Avenue.

The upcoming closing has nothing to do with, say, a decline in business.

"My building has been bought by a predatory landlord who will not renew my lease," she said. "It's been over a two-year fight, and the time has come to close up shop."

She shared with me a copy of her goodbye letter to the community. (The letter is displayed on the front window of the shop.)

Her last day will be around Sept. 15.

---

Well, it’s been quite a ride. When Clayworks opened in the EV in Jan, 1974, it was like an outpost of civilization. Empty stores were everywhere. Clayworks was the kind of unique, individual store that helped build this neighborhood into the desirable commodity it is today. Through four decades, I have been able to watch the EV grow and change from my window. It has been the finest front row seat I could ask for.

Clayworks survived everything the mad universe pitched at it — Hurricane Sandy, blizzards, The Great Recession, swastikas painted across the storefront, the front window being intentionally blown out, water main breaks, ceiling caves, the crack epidemic, and of course 9/11, all come to mind, plus the usual personal real-life challenges. Clayworks has always held its own, with great thanks to the support of this neighborhood and my loyal clientele.

That is, until the recent and well documented invasion of the EV by predatory landlords and perfidious financiers. You see, Clayworks now occupies real estate deemed too valuable to allow it to stay. The new building owner and the plethora of shell companies he hides behind wants me out, and this is a war that I cannot win. I have spent the past 2 years fighting. I am tired and my time is up. Let me be clear — this is not the story of an unsuccessful store hanging on for dear life. This is the intentional stomping out of yet another mom and pop store by predatory real estate weasels. We small businesses are a family. Every store whose light goes out is a small death among us, another cross in the graveyard. There, we are legion.

Clayworks is as much a part of the EV as the EV is a part of Clayworks. I live here. My heart lives here. The EV is my neighborhood, my community. I want to see thrive. I know there are 2 camps of thought in the EV currently. There are those who want to keep the wild, fierce, gritty, creative, independent EV spirit. There are others who want less edge and attitude and more sameness — tamer, user friendly stores, plus bars and restaurants that are trendy and cater more to the on-demand desires of a new generation. Why can’t we have a balanced mix here is the question.

I believe, if protected and supported by the City, it would be possible to have both — to support change, and yet maintain the unique identity that many of us treasure. But the Small Business Jobs Survival Act languishes in the purgatory of the City Council. Some form of this legislation, which supports small businesses the way other more enlightened cities do, has been moldering in the CC since Miriam Friedlander’s time. Politicians wave it around to get votes, but as soon as they are elected, it goes back into the junk drawer.

Now, we hear there is a movement to form a small-business-only region, and a protective registry for legacy businesses that have been around for 35 years or more. Well, that would be Clayworks, but, ironically, it’s too late for me.

I am not opposed to change but frankly, what is going on here is full-scale rape and pillage. So folks, it’s up to you. You vote with your ballot and you vote with your dollar. The kind of neighborhood and community you want to see is in your hands. If it matters, and it should, then be mindful. Exercise your right to vote and your right to make some noise.

It has been an incredible privilege to have been able to earn a living being a potter in the EV. I’ve always hoped that in a small way, Clayworks helped to make the world a better place, one mug at a time. I want to thank, sincerely and gratefully, every person who laid down their hard earned bucks to buy my work and support me. In my 44 years here, I have gotten to know many of you personally and my life has been greatly enriched by your company.

Everyone who came into this store, who shared their stories and lives, wove a fabric that connected us together, warp and woof, a tapestry of community and friendship. We made magic happen here. That’s really what it’s all about.

My last day will be sometime around Sept. 15. Whatever work I have left is all that there’s gonna be, so if you’ve been looking at something and can’t make up your mind, don’t wait too long! I will pack and store the rest with the intention of starting an online store (anyone out there who can help me set it up?). Or call me- I’ll meet you at the Veselka, you bring the $$$ and I’ll bring the goods!

With sadness and love,
Helaine Sorgen/Clayworks

P.S.

A special shout out of love for Santo and Margaret at The Source, who have generously supplied me with great quantities of packing boxes. Also to GOLES, which has helped so many here to organize and fight back. And to Cooper Square, especially SaMi Chester, who works tirelessly for EV tenants, and has been more than generous in sharing support and information and encouragement in my battle, even though commercial tenants are not really his purview.

And to 9th Street, the best little block in the EV and my home for 44 wonderful years!

Previously on EV Grieve:
29-year-old Gallery Vernon is closing on East 9th Street

Tuesday, August 8, 2017

More legal drama with Raphael Toledano and 97 2nd Ave.

The 6-story building at 97 Second Ave. between Sixth Street and Fifth Street was one of the first East Village properties purchased by Raphael Toledano, who would later buy several portfolios of buildings.

Now the building, which has a complicated recent history (there was a lawsuit in 2014 involving Toledano and another broker), is involved in more legal drama.

The Commercial Observer breaks it down:

Landlord Raphael Toledano is seeking Chapter 11 bankruptcy protection for an East Village walk-up building, which he says Delshah Capital’s Michael Shah has “commandeered,” according to a filing in the United States Bankruptcy Court for the Eastern District of New York...

And...

On July 21, Delshah Capital announced the “acquisition of a defaulted note encumbering the property” at 97 Second Avenue. Delshah said in a news release that day, “Shortly after acquiring the defaulted senior note, Delshah worked directly with the building’s now former owner to enable them to recoup their capital and to take possession of the property at 30 percent below market value.”

Public records show that Toledano paid $4.95 million for it in April 2014. Toledano said in the bankruptcy protection filing that the property is valued at $15.1 million, per the Commercial Observer.

Previously on EV Grieve:
Raphael Toledano-owned 97 2nd Ave. is on the auction block