Banana Kelly Group Takes Over Dilapidated Bronx Buildings ...

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February 10, 2013

Tenants and Community Group Save Dilapidated Bronx Complex

By WINNIE HU

Minarda Pimentel had to keep her clothes in sealed plastic bags because rats gnawed on everything in her closet. Her neighbor Dominga Sanchez had to boil water on the stove for showers because there was no hot water or heat for that matter for days at a time. Ms. Sanchezs oldest daughter moved out because the mold on the walls made her sick. Their hardship stories are common enough in the low-rent neighborhoods of the Bronx, where dilapidated buildings are often passed from one neglectful landlord to the next. But the tenants of this decrepit apartment complex on College Avenue, many of whom speak little English, finally decided that they had enough. Behind their creaky, peeling doors, they embarked on a yearlong campaign against their landlord that attracted the attention of influential supporters and eventually led to a change in ownership. The complex, which has 63 apartments in three 1920s buildings, was acquired last month by a group of communityminded organizations led by the Banana Kelly Community Improvement Association, a nonprofit developer of moderate-cost housing in the South Bronx, which assumed the mortgage on the complex and is committed to spending an additional $3.5 million for renovations. Even before the closing papers were signed, change was afoot: The new owners sent a mechanic and a truck carrying 1,500 gallons of heating oil to restart the boilers. It feels like winning the Mega Millions, Ms. Sanchez, 48, said in Spanish, referring to a multistate lottery. Since the new owners came, the heat hasnt stopped and theyre coming to fix everything. Ive lived an experience in this apartment that no one should have to. The Bronx deal grew out of an unusual program, known as First Look, in which a small number of banks have agreed that instead of selling troubled residential buildings to the highest bidder, they will give community developers first crack at taking the buildings over. The program, which started a year ago, has allowed community developers to buy a dozen privately owned buildings in the Bronx and Brooklyn and, in the process, expand their footprint beyond mainly city-owned or abandoned properties. Bill de Blasio, the New York City public advocate, said the College Avenue deal would open the door for community groups to help other long-suffering tenants.

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Banana Kelly Group Takes Over Dilapidated Bronx Buildings ...

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His office has compiled a watch list of more than 300 privately owned apartment buildings, mostly in Brooklyn and the Bronx, that have been repeatedly cited for housing violations. Were breaking the vicious cycle that sees troubled buildings endlessly bought, sold and then left to deteriorate, Mr. de Blasio said. What these tenants have accomplished is extraordinary, and its a model we need to replicate: pressure from within and resources from without. The Bronx complex was previously owned by Eli Abbott, a Brooklyn businessman whom Mr. de Blasio has called the citys worst landlord. The rent-regulated apartments cost about $800 monthly for a one-bedroom or $1,200 for a two-bedroom and are often paid for with government assistance, tenants said. But the problems with them could be seen in the 685 violations pending against the buildings, myriad offenses that included the presence of vermin, water leaks, broken windows, lead paint, defective electrical outlets and missing smoke detectors. The city spent $36,000 on emergency repairs in the buildings. Still, city officials and housing advocates said there was only so much they could do to bring relief to tenants, because the buildings were privately owned. So Ms. Sanchez, 48, a disabled worker in a window factory, and her neighbors sought help from Susanna Blankley, director of housing organizing at CASA-New Settlement Apartments, a local community group, and formed their own tenants association. Last September, they sent a letter to Mr. Abbott and the bank holding the mortgage on the building, New York Community Bank, listing the repairs that were needed. Mr. Abbott described the complaints as completely frivolous and baseless in a letter to the bank, and said tenants had unrealistic expectations as if they were living in million-dollar Manhattan apartments. Mr. Abbott declined to comment for this article. Ms. Sanchez said her calls for repairs were ignored for so long that she finally gave up and spent $150 to replace a broken toilet and $180 to fix bathroom tiles damaged by water leaks. She said she started withholding part of her $1,200 monthly rent in protest. Ms. Blankley said the tenants eventually learned that Mr. Abbott had listed the complex for sale early last year, in one advertisement asking $5 million. Fearful that they would be saddled with another unsatisfactory landlord, the tenants made banners from white bedsheets spray-painting them with messages like We know our rights and Were not moving which they hung from fire escapes to scare off unwelcome buyers. They also sued Mr. Abbott, seeking a court-appointed administrator to assume control of the buildings. Ms. Blankley started approaching community groups about taking over the complex. Most said they simply did not have the money. Then she found Harold DeRienzo, the president of Banana Kelly, who brought in two partners, Wavecrest, a

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Banana Kelly Group Takes Over Dilapidated Bronx Buildings ...

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for-profit management company, and FCE College Avenue, a financial firm, which jointly provided the money for the deal. New York Community Bank rejected their first bid, to reduce the principal on the mortgage, which the buyers would assume, to $2.4 million from about $3.4 million. But the bank continued negotiating and finally agreed that the buyers would assume a mortgage of $3 million, with the bank allowing the group to make interest-only payments at first. As much as we want to be a participant in the community, we wouldnt be responsible to our shareholders if we gave it away its a balancing act, Chris Beck, a vice president of New York Community Bank, said of the agreement. Mr. DeRienzo said his group was working with city housing officials to borrow about $8 million to repay the bank and finance renovations about half of which will come from city funds, half from a private lender in return for a commitment to maintain the apartments for low- and moderate-income families. Mr. DeRienzos group also paid Mr. Abbott about $300,000, and paid hundreds of thousands more to settle unpaid property taxes and municipal bills. The new owners have already gone door-to-door to inspect each of the apartments, some of which still had antiquated fuse boxes. They sent in an exterminator and cleaned out piles of garbage in the basement. Ms. Pimentel and her neighbors gathered in the lobby recently to celebrate their changing fortunes with a potluck dinner of baked chicken, rice and beans and macaroni salad.

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