The New York Times delved into Raphael Toledano's crumbling East Village real-estate empire yesterday... focusing specifically on the resnt-stabilized residents who accepted buyouts to leave their homes — but have yet to receive their payment.
When we last checked in with Toledano, Madison Realty Capital had replaced the 27-year-old landlord as the property manager of 15 East Village buildings while a deal to transfer the ownership was worked out.
Toledano planned to use $124 million worth of financing from Madison Realty Capital for buyouts and renovations.
Per the Times:
What followed was a familiar playbook: Coerce tenants to give up their valuable rent-regulated apartments with threats of eviction or offers of cash payouts, or both. Once the tenants leave, renovate the empty spaces and lease them for considerably more money. “At the end of the day, it’s a part of the business plan,” Mr. Toledano said in a telephone interview.
Then...
“He made it really clear that he was going to make it a miserable place to live,” said Jen Bekman, 47, an entrepreneur who lives in another Toledano-owned building, on East Fifth Street. She also fielded daily calls and texts from the landlord. “Sometimes he’d lose his temper. You could just tell that he was kind of volatile.”
The clock was ticking for Mr. Toledano. His deal with Madison Realty Capital gave him a year to clear out apartments, then renovate and rent them.
In the end, 140 of the 300 tenants who lived in the 15 buildings signed buyout agreements, totaling $7 million in payouts, Toledano confirmed. (Bekman received the largest payout offer — $600,000 for the $1,900-a-month, one-bedroom apartment she lived in for 25 years.)
However, by the time all the buyout offers were finalized, Toledano no longer had the money to pay his debts.
To shield himself from personal liability, Mr. Toledano had purchased each of his properties using limited liability companies. Last summer, the L.L.C.s that owned the buildings in the Madison Realty portfolio went into default and Madison stopped funding the buyouts.
So the residents who took the buyouts are in various stages of housing limbo. You can read the piece for more.
Meanwhile, Toledano has sold off other pieces of his East Village portfolio, as we've noted.
You may want to warn anyone you know who lives in the West Village.
Back to the Times:
[Toledano] said he was in contract with an investor to buy a $200 million portfolio of properties in the West Village, a neighborhood where he said tenants were less organized.
“I kind of want to get out of the East Village walk-up business, to be honest,” he said, without a hint of remorse. “There is so much scrutiny of the buyouts.”
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
