Financing comes together for the office building planned for the gateway of the East Village

[Photo from yesterday]

All has been quiet on the northeast corner of Third Avenue and St. Mark's Place since workers cleared the lot in late summer of the assemblage of buildings that housed Korilla BBQ, the Continental and McDonald's, among other businesses.

For the foreseeable future, the RIP ST. MARKS message, which arrived over the summer on the west-facing wall of 5 St. Mark's Place, will continue to greet passersby.

As you likely know, a 10-floor office building with ground-floor retail is in the works here. The total size of this new building has yet to be officially determined. Real Estate Equities Corporation (REEC) wants to transfer the air rights from the landmarked Hamilton-Holly House at 4 St. Mark's Place to add more square footage, a move that has plenty of critics.

In June, the Landmarks Preservation Commission voted to support the plan, and has issued a report to the City Planning Commission to allow the proposal under a specific zoning resolution.

The City Planning Commission will likely sign off on the project next as part of the city’s Uniform Land Use Review Procedure. City Council will have the final say on the Morris Adjimi-designed building. Those meeting dates have not yet been made public. (This Zoning Application Portal provides a project status. The most recent activity by the developer: filing the Land Use application on Oct. 3.)

Meanwhile, the financial elements are coming together for the project.

This press release — citing square footage even though it hasn't been determined — landed in our inbox last Friday:

Madison Realty Capital (MRC) has provided a $48 million senior loan for the funding of a $79.1 million financing package for the development of a mixed-use office project at 3 St. Mark’s Place ...

Hana Financial Group, a leading South Korean financial services company, provided Real Estate Equities Corporation (REEC), an experienced local developer with an additional $31.1 million of mezzanine financing to fully capitalize the project.

REEC’s development plans call for a 10-story, 68,224-square-foot modern boutique office building with eight floors of office space, a fitness center, roof deck, and 7,886 square feet of retail.

The property is well-located at the corner of St. Mark’s Place and 3rd Avenue in a section of Manhattan’s East Village that has seen significant growth in demand for quality office space from a mix of tech, finance, law, and family office tenants in recent years.

The site is adjacent to 51 Astor Place, a 400,000-square-foot office and retail asset developed by Minskoff Equities that is home to anchor tenants IBM Watson and St. John’s University, in addition to a strong retail roster that includes Shake Shack, Flywheel, Bluestone Lane and Orange Theory.

In reporting on this financing, The Real Deal noted:

The developers will be eyeing rents in the area of $150 per square foot. Such figures were once only seen in the most expensive locations in Midtown but now are commonplace for newly constructed office buildings in areas like the Meatpacking District, Soho and Greenwich Village.

[A rendering of 3 St. Mark's Place]

Madison Realty Capital, who provided the senior loan, is a familiar name for some EV residents. In the fall of 2015, they loaned $124 million to Rafael Toledano, a then 25 year old with no track record as a landlord so that he could buy a portfolio of 15 buildings, mostly in the East Village. He eventually defaulted on Madison's loan.

REEC picked up the 99-year leasehold for the properties here for nearly $150 million in November 2017. The corner assemblage is owned by the Gabay family.

Previously on EV Grieve:
Demolition permits filed for northeast corner of 3rd Avenue and St. Mark's Place

End is nearing for the businesses on the northeast corner of 3rd Avenue and St. Mark's Place

New building plans revealed for 3rd Avenue and St. Mark's Place

Concern over potential air-rights transfer for new office building on St. Mark's Place and 3rd Avenue

Developers of 3 St. Mark's Place are looking to increase the size of their proposed office building at 3rd Avenue to 10 floors with air-rights deal

The lobbyists behind the air-rights transfer and zoning variance for 3 St. Mark's Place

Final demolition phase for 1 St. Mark's Place; more questions about lobbyists attached to project

Report: LPC approves transfer of air rights across St. Mark's Place

Live at 1 St. Mark's Place this summer; views of 51 Astor Place are free

The annual 9th Street Block Party is tomorrow (Saturday — on 9th Street)

The annual 9th Street A-1 Block Association Block Party — one of the best around — is coming up tomorrow (Sept. 14).

Both residents and merchants along the block — Ninth Street between Avenue A and First Avenue — will have items for sale. Expect some live music too.

In addition, look for the return of Clayworks Pottery for the day. Helaine Sorgen will have items left from her Ninth Street shop, which closed after 44 years in 2017 thanks to Raphael Toledano.

Find all this — and more! — from 11 a.m. to 5 p.m. There isn't a rain date — so don't let it rain!

Green Garden Buffet coming to 9th Street

[Photo by Steven]

Awning signage is up now for Green Garden Buffet on 332 E. Ninth St. between First Avenue and Second Avenue... not sure what this is (other than some kind of buffet!) at the moment.

This space was previously home for 22 years to Gallery Vercon, who wasn't offered a lease in 2016 after Raphael Toledano bought the building. (The property is now owned by Renaissance Realty Group in Brooklyn.)

Week in Grieview

[Sign painting at Van Leeuwen on 7th Street via Derek Berg]

• Garbage truck parking situation on 10th Street still stinks, residents say (Thursday)

• RIP Joe Overstreet (Tuesday)

• Photo exclusive: Take a look inside the former Hells Angels clubhouse on 3rd Street (Monday)

• A visit to St. Mark's Church in-the-Bowery (Wednesday)

• Explosion-site condoplex reaches the top (Friday)

• The Gem Spa Zoltar is alive and well and telling fortunes an L-train ride away in Bushwick (Wednesday) "Gem Spa is open" (Tuesday)

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

• Report: 18 years to life for man who murdered Elizabeth Lee on Cooper Square (Friday)

• What happened to the DeRobertis neon sign on 1st Avenue? (Monday)

• Grant Shaffer's NY See (Thursday)


[The 6 & B Community Garden via riachung00]

• The Richard Morrison and Bill Rice exhibit at SHFAP (Monday)

• East Village merchant pride (Monday)

• Report: LPC approves transfer of air rights across St. Mark's Place (Thursday)

• St. Mark's Vegan Food Court debuts at 12 St. Mark's Place (Monday)

• The MTA wonders if you'll shop at this CVS machine in Union Square (Friday)

• The 411 on the 101 Condominium (Wednesday)

• So long to 238 E. 3rd St. (Tuesday)

• 2 storefronts shaping up on 2nd Avenue for Calexico and Brasserie Saint Marc (Wednesday)

• Report: Ricky's will be down to 2 NYC locations (Wednesday)

• Anything to lose sleep over? That empty Raymour & Flanigan space on 14th Street (Monday)

• A reminder that First Lamb Shabu is coming soon to 14th Street (Monday)

... and it will feel more like summer when workers put away the snowblower in Tompkins Square Park...



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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

MAD Toast House bringing bubble tea and toast to 9th Street

[Photo on May 16 by Steven]

A new cafe called MAD Toast House is coming to 332 E. Ninth St. between First Avenue and Second Avenue.

The Toast House, which serves a variety of bubble tea, sparkling water and toast-related creations, is having a soft-opening today ahead of a grand opening on June 10, per the shop's Instagram account.

Speaking of Instagram, a look at some of their offerings...

View this post on Instagram

Kumquat lemon spritzer🍋#kumquatlemonjuice##kumquat##lemon##tea##teatime##spritzer##金桔柠檬##金桔柠檬汁#juice#

A post shared by MADtoasthouse (@madtoasthouse) on May 23, 2019 at 2:31pm PDT

View this post on Instagram

Creme brulee toast#toast##honeytoast##hightea##afternoontea##teatime#

A post shared by MADtoasthouse (@madtoasthouse) on May 22, 2019 at 11:26am PDT

This space was home for 44 years to Clayworks Pottery, which was forced to close in the fall of 2017 thanks to predatory landlord Raphael Toledano.

Developers eye air rights at Campos Plaza for long-stalled 14th Street development

[The long-stalled 644 E. 14th St.]

Back in December, Mayor de Blasio announced that the New York City Housing Authority would sell its unused air rights to developers for the first time ever as part of plan called NYCHA 2.0.

The cash-strapped NYCHA said that it would transfer a portion of its 80-million square feet of air rights to generate $1 billion in capital repairs for nearby developments.

PincusCo examined city records to find that several developers have spent hundreds of thousands of dollars to lobby the city for these air rights.

Many familiar names are on the list. According to the PincusCo investigation, Madison Realty Capital hired one of the city’s most active government lobbying firms, Capalino+Company, to approach NYCHA about the air rights at Campos Plaza II adjacent to the long-stalled development at 644 E. 14th St. at Avenue C.

Per PincusCo:

Madison Realty is not the fee owner, but the lender on the project. The property owner, Shulamit and Shaya Prager’s Opal Realty, purchased 644 East 14th Street for $23 million in 2016, from the Rabsky Group. At the same time, Opal borrowed $52 million from Madison Realty Capital.

How the firm will obtain air rights from NYCHA for its site is not clear, however, because the adjacent NYCHA development, Campos Plaza II, has no available residential air rights, according to a PincusCo Media analysis of city land use records.

That said, Madison Realty almost certainly has a legitimate strategy to obtain air rights. The firm may be seeking an upzoning on the NYCHA parcel, which would make air rights available.

Or alternately, the developers may be seeking a lot merger with two other tax lots co-owned by NYCHA that have more than 300,000 square feet of community facility space available. That would allow the developers to build, for example, a college dormitory space for students. Scores of New York University students live in apartments across the street at Stuyvesant Town. Madison Realty did not respond to a request for comment.

As previously reported (see the links at the bottom of this post), the pre-air-rights plans called for a 15-story residential building with space for a health-care facility.


[The most recent rendering of the development]

There hasn't been much, if any, activity at this southwest corner of 14th Street and Avenue C in 15-plus months. According to city records, the new building permits expired in December. As the PincusCo report notes, this stall may be intentional. "With additional air rights, the project could presumably be larger."

Also, in late January, the Commercial Observer reported that Second Avenue Deli owner Jeremy Lebewohl filed a $10 million lawsuit alleging that his five-story residential building at 642 E. 14th St. sustained damages by the foundation work next door at No. 644.

As for the currently stalled new development, here's a rehash of the info I received on the project in September 2016:

Madison Realty Capital (MRC), an institutionally-backed real estate investment firm focused on real estate equity and debt investments in the middle markets, provided a $52.0 million first mortgage loan for the acquisition of a development site in the East Village and construction of an approved 76,259 square foot mixed use development on the site.

The plans for 644 East 14th Street include 50 residential units, 8,064 square feet of retail space with 200 feet of frontage on 14th Street and Avenue C, and 21,575 square feet of community facility space.

The property is located at the corner of 14th Street and Avenue C, along the Northern border of the East Village and directly across the street from Stuyvesant Town. Residential units will offer contemporary finishes and large balconies with East River views. The borrower is currently finalizing a lease with a major New York hospital to occupy the entire community facility portion of the new building.

This corner property previously housed the single-level R&S Strauss auto parts store, which closed in April 2009.

In 2015, Madison Realty loaned $124 million to Rafael Toledano, a then 25 year old with no track record as a landlord so that he could buy a portfolio of 15 buildings, mostly in the East Village. He eventually defaulted on Madison's loan.

Previously on EV Grieve:
Development back in play for East 14th Street and Avenue C

More details on the sale of 644 E. 14th St.

Here comes a 15-story retail-residential complex for East 14th Street and Avenue C

Prepping the former R&S Strauss auto parts store for demolition on East 14th Street and Avenue C

City OKs 15-story mixed-use retail-residential building on 14th and C

14th and C now waiting for the Karl Fischer-designed 15-story retail-residential complex

14th and C still waiting for its Karl Fischer-designed retail-residential complex

Report: New owners for the empty lot at 14th Street and Avenue C

6 posts from March

[1st Avenue looking south toward 13th Street]

A mini month in review...

A visit to Peter Jarema Funeral Home on 7th Street (March 22)

The mystery of Moishe's (March 21)

New York Attorney General intervenes to stop eviction of tenants in Raphael Toledano-owned building on 13th Street (March 14)

Photos: "Best Wishes" from Harley Flanagan at the Pyramid Club (March 13)

A Repeat Performance, until July 31 (March 13)

I Am a Rent-Controlled Tenant (March 7)

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.

Week in Grieview

[St. Patrick's Day weekend on 2nd Avenue via Derek Berg]

Stories posted on EVG this past week included...

Good Records NYC is closing, though the shop will continue to sell vinyl as Stranded Records (Monday)

A visit to Sixth Street Specials (Friday)

Photos: 'Best Wishes' from Harley Flanagan at the Pyramid Club (Wednesday)

A Repeat Performance, until July 31 (Wednesday)

Art on A Gallery closing this summer after 7 years (Tuesday)

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

The Annual Mr. Lower East Side Pageant returns to the neighborhood for its 20th edition (Monday)

The FDNY honors fire marshal Christopher T. Zanetis in plaque ceremony on 2nd Street (Friday)

Todaro Bros. is closing April 2, ending 102 years of business (Thursday)

Hanoi House expanding on St. Mark's Place (Monday)

Cold case: New information sought in the 23-year-old murder of Second Avenue Deli owner Abe Lebewohl (Friday)

An outpost of Original Nicky's Vietnamese Sandwiches arrives on Avenue A and 13th Street (Wednesday)

Station on 10th Street along Tompkins Square Park now one of the largest in the Citi Bike system (Wednesday)

Tree Bistro is returning after October fire (Thursday)

Reminders: the Ottendorfer Library is back open (Monday)

This week's NY See (Monday)

Christmas is coming to 10th Street thanks to 'Mr. Robot' (Wednesday)

Van Đa brings modern Vietnamese cuisine to 4th Street (Friday)

Report: MTA commits to a shorter work day for the 14th Street L-train rehab (Friday)

Chinese Graffiti now open at 171 Avenue A (Friday)

Coming soon signage spotted for Plado on 2nd Street (Tuesday)

The Black Emperor has arrived on 2nd Avenue (Thursday)

The building housing the now-closed Sidewalk remains for sale on Avenue A (Wednesday)

Another look at that 5th Street ghost signage (Wednesday)

1st of the new businesses at 20 Avenue A is now open (Monday)

Wattle Cafe joins forces with Pure Green at 152 2nd Ave. (Tuesday)

Perk Espresso and Coffee Bar opens this week on 14th Street (Monday)

Former No Malice Palace for rent on 3rd Street (Monday)

... and on Friday, students from several East Village schools came to Tompkins Square Park in support of the National Youth Climate Strike ...


[Derek Berg]

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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.

For years, these residents have stood resilient in the face of attacks by their predatory landlords. Today we rallied to send a message that greed is not a case for displacement & won’t be tolerated. Thanks to @TishJames @MTorresSpringer @NYSHCR & @GOLESNYC for standing united. pic.twitter.com/SaCzvXCtz5

— Carlina Rivera 利華娜 (@CarlinaRivera) March 13, 2019

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

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

Report: New owner for 531-533 E. 12th St., the onetime home of the East 12th Party Crew

[EVG file photo]

The seven-story rental building at 531-533 E. 12th St. between Avenue A and Avenue B reportedly has a new owner.

According to The Real Deal, Michael Shah's Delshah Capital paid $25.2 million for the 11-year-old building.

The seller, Zelman Properties, paid $16.6 million for the place in 2012. It had been expected to fetch in the mid-to-high $30 million range.

No. 531-533 has 26 residential units, many of them with outdoor space. According to Streeteasy, monthly rents range between $2,900 to $7,500.

As you may recall, Shah was entangled in a legal battle with Raphael "I will bury you" Toledano over the ownership of 97 Second Ave. (Read how that turned out here.)

And as you also may recall, No. 531-533 received some attention in 2009 for being home to NYU's Delta Phi House/East 12th Party Crew:

531 East 12th Party Crew (Apt 1E)
Description:
There are lots of places to party in New York, but few can match the insanity of 531 East 12th Street. If you are tired of going out to bars, come to an apartment with a massive common room filled with multiple pong and flip cup tables.

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

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

[Photo via the Cooper Square Committee]

City Council is taking up new legislation regarding lead and is holding a joint oversight and legislative hearing tomorrow morning.

Ahead of that, the Cooper Square Committee, working with local residents and elected officials, released a statement as well as a series of photos that "tell a story of lead contamination."



Per Cooper Square:

Tenants from the Lead Dust Free NYC (LDFNYC) coalition are releasing a series of photos showing the faces of lead dust contamination. As elected officials focus more on the issue of lead in NYC housing, LDFNYC urges them to crack down on landlords who contaminate buildings with lead during construction.

Lead contamination arising from unchecked construction dust has hit Lower East Side (LES) tenants hard over the last five years. Landlords like Samy Mahfar, Steve Croman, Raphael Toledano, and Icon Realty have all exposed tenants to lead through this form of contamination. In response, LES tenants have formed this campaign and assembled these photos of themselves to highlight the extreme lead exposure they have faced through construction dust in their buildings.

While tenants applaud new legislative efforts to stop lead poisoning, they want to also bring attention to the lax enforcement of existing laws. NYC’s predominant lead law is Local Law One of 2004. It was enacted fourteen years ago and many aspects of the law, which would help protect tenants from lead laden construction dust, are simply not being enforced.

"We have had multiple lead violations at 514 E. 12th St. The last violation placed found lead dust at four times the EPA standard. I do not believe Local Law One is enforced," said Holly Slayton, a longtime East Village resident whose doctor advised her and her daughter to wear face masks in their own home during renovations in their building (pictured above). "I had to call city agencies continually to get the dust tested and the landlord to follow the proper Local Law One protocol."

The statement from the Cooper Square Committee also includes comments from local elected officials, including City Council member Carlina Rivera and Assemblymember Harvey Epstein.

Back in May, City Council member Margaret S. Chin introduced legislation to empower city agencies "to stop dangerous and dirty construction before it sickens tenants and their families."

Here's more background from Chin's office:

In 1960, New York City was one of the first municipalities to ban the use of lead paint. In 2004, Local Law 1 set a goal for the City to eliminate lead in all residential buildings by 2010. Eight years past that deadline, it is clear that there is still more work to be done.

Under current law, landlords must perform annual checks for lead-based paint hazards in multiple dwellings built before 1960 with units that house children under 6 years old. Landlords must also perform a check whenever an apartment becomes vacant. To remediate the problem, landlords often paint over the lead paint surface. Because paint is susceptible to chipping or fading, this only creates a temporary solution to the presence of lead.

Intro 873 pushes for a permanent solution by requiring landlords to permanently remove or encapsulate any lead paint once a unit becomes vacant.

Intro 874 would increase inter-agency coordination when construction work blows lead particles into residential units and common areas, and also allow the City to issue a stop work order if a unit has received a notice of a lead-based paint hazard.

These two bills, sponsored by Chin, were introduced as part of a legislative package of 23 bills to expand the City’s oversight over lead paint, decrease the threshold for elevated blood lead levels that trigger investigation, improve inter-agency coordination and call for reporting to assess the impact and effectiveness of the City’s lead prevention measures.

Meanwhile, according to a new report by the New York Lawyers for the Public Interest, city officials have never brought a case against a landlord for failing to inspect their apartments for lead since the law was enacted requiring such inspections. Read more at the Post.

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

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

New state legislation aims to combat predatory equity

Local elected officials introduced joint legislation on Sunday targeting the practice of predatory equity.

State Sen. Brad Hoylman, Assemblymember Harvey Epstein and various tenants and advocates were present at a press conference outside the office of Westminster Management, a Kushner Companies subsidiary, on 12th Street between Avenue A and Avenue B. There, they discussed the legislation, which directs the New York State Department of Finanical Services (DFS) to collect data on financial institutions that lend to property owners with the intent to displace current tenants.

Per the announcement:

Specifically, the bill requires DFS to investigate the role financial institutions play in encouraging anti-tenant practices by notorious landlords like Jared Kushner, Steve Croman and Raphael Toledano.

Similar to the subprime mortgage crisis of 2008, lax underwriting standards and a general lack of transparency have allowed speculators and real estate agents to secure outsized mortgages with very little discretion and oversight. Owners use these loans to make purchases based on unrealistic projections of rising rents, and in turn have difficulty paying the mortgages.

Building owners — anxious to recoup on their hefty investments — often resort to abusive and exploitative tactics to drive rent-regulated tenants out. These abusive practices, known as predatory equity, are best-exemplified by figures like Steve Croman and Jared Kushner.

In the fall of 2015, after the Daily News reported that the state was investigating Toledano for tenant harassment at 444 E. 13th St., he received two loans totaling $124 million from private equity firm Madison Realty Capital to buy and renovate a 16-building East Village portfolio.

Per The Real Deal in an article last July:

The leverage on the deal — which clocked in at 128 percent compared to the typical 50 to 65 percent on a New York City multifamily deal — raises questions about how culpable lenders are in perpetuating harassment. In short, are they turning a blind eye when their borrowers too-aggressively push to turn rent-stabilized apartments into luxury units?

Pressured to generate income from the buildings to pay off his loans, Toledano reportedly attempted widespread buyouts. And many of the tenants at the buildings accused him of harassment.

"No longer can we allow landlords like Kushner, Croman and Toledano to force our neighbors out of their homes in order to make a quick buck," Hoylman said in a statement. "We demand that New York State investigate the practice of predatory equity so we can take the necessary steps to protect rent regulated tenants from harassment and eviction."



Said the recently elected Epstein: "This legislation will bring us closer to stopping the practice of predatory equity before it starts the cycle of tenant harassment and displacement that has become all too familiar in our city. Bad actor landlords and scheming financiers should take note: your days of destabilizing our neighborhoods with your shady business practices are numbered."

Croman was released from jail on Friday after serving eight months of a year-long sentence for fraud.

Previously on EV Grieve:
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