Wednesday, December 16, 2020
Updated: It's still snowing
And we're off...
Gallery Watch: In the Woods by Sally Saul at Rachel Uffner Gallery
NY AG: Madison Realty Capital to pay more than $1 million for victims of fraud and tenant harassment
"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.
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
Workers clear lot ahead of new-building construction on 6th Street and Avenue C
Another late-night break in, this time at East Village Finest Deli on Avenue B
Tuesday, December 15, 2020
Tuesday's parting shot
A second Christmas tree for Tompkins Square Park?
Updating: East Village bars and restaurants temporarily close down again
Celebrating 41 years of the Pyramid Club
A break in at Kolkata Chai Cafe
Here then, the renovated 84 2nd Ave.
This property has changed hands twice in the past four years. Highpoint bought the building for $7.8 million in the spring of 2018. According to public records, the building sold in May 2016 for $5.1 million. The Sopolsky family had owned it for years.
Also as we've noted several times through the years, the address has a dark past, which includes the still-unsolved murder of Helen Sopolsky, proprietor of the family's tailor shop who was found bludgeoned to death in 1974, per an article at the time.
The storefront had remained empty since her death.
And here's the plywood rendering so you can see how the real-life No. 84 matches up...
Previously on EV Grieve:
• Plywood and a petition at 84 2nd Ave.
• Workers clearing out the mysterious 84 2nd Ave. storefront
• Renovations proposed for mysterious 84 2nd Ave.
• Mysterious 84 2nd Ave. sells again, this time for $7.8 million
• There are new plans to expand the mysterious 84 2nd Ave.
• Renovations underway at the (formerly) mysterious 84 2nd Ave.
• A rendering and vintage erotic playing cards (NSFW) at the under-renovation (and mysterious!) 84 2nd Ave.