By Gerard Flynn
Tenants from rent-stabilized buildings and their supporters took to the streets at the end of last month in the most vocal show of force yet against so-called predatory lending in the East Village. They charged that tenants of landlord Westbrook Partners have suffered a year of concerted harassment, and urged residents of Starrett City to reject the real estate investment firm’s bid for the affordable housing complex in Brooklyn.
At the press conference, held at 500 E. 11th St., Brandon Kielbasa, an organizer with the Cooper Square Committee, an affordable housing advocacy group, shot off a series of complaints against Westbrook Partners filed with the committee by dozens of tenants during the past year.
Kielbasa warned Westbrook Partners and “other predatory equity landlords like them” to realize “when they go to do other big deals around the city we are going to be there to tell people what they have done.”
The protest probably couldn’t come at a worse time for Westbrook Partners, which has close to $3 billion in real estate assets worldwide.
The investment firm is among four finalists in the bidding for Starrett City — which was renamed Spring Creek Towers in 2002 — the nation’s largest federally subsidized housing development. The sprawling Brooklyn complex, with almost 6,000 apartments, houses middle-income residents and is expected to fetch around $1 billion.
The development’s sale has been closely monitored by city and state politicians, who fear that private-equity companies will raise rents and squeeze out tenants.
A $1.3 billion bid in 2007 by Clipper Equity was rejected by the federal Department of Housing and Urban Development on suspicion it would raise rents.
Since Westbrook Partners bought 17 East Village buildings from Extell Development Company in May 2007, the Cooper Square Committee has found that at least 40 percent of 260 units have been vacated, a rate that is far higher than the 5.6 percent average turnover for rent-regulated apartments calculated by the city’s Rent Guidelines Board.
Throughout the city, close to 90,000 rent-regulated apartments have been bought by private equity firms in recent years, according to the Association for Neighborhood Housing and Development.
At the Aug. 27 protest, Kielbasa was flanked by Susan Stetzer, district manager for Community Board 3, and Rosie Mendez, East Village city councilmember. Mendez warned Starrett City residents to “watch out, because Westbrook Partners is coming.”
“Just as a leopard doesn’t change its spots, neither does an unscrupulous landlord,” she said.
Marty Algaze, chief of staff for state Senator Martin Connor, who represents the East Village, cautioned residents of Starrett City to be “very afraid” of Westbrook Partners.
“These are not nice people,” Algaze said. “They don’t supply heat and hot water. They don’t make repairs. They stress you out. They want you to be miserable so you will move out of your apartment, and then charge a lot more in rent,” he told the small crowd of onlookers and reporters gathered.
Westbrook’s multi-building East Village deal was largely funded through a $55 million loan from Barclays Capital Real Estate, Inc., according to New York City Department of Finance records.
Deeds for the 17 properties also list a c/o address for another private equity firm, Normandy Real Estate Partners, which has also been hit with similar tenant complaints on rent-regulated properties it has purchased.
Before predatory equity in affordable housing made the news this year, Normandy noted on its Web site that rent-stabilized housing in New York City represents “a near-term opportunity to increase cash flow by converting rent-stabilized apartments to market rate as tenants vacate units.” This statement has since been removed.
Tiffany May, an East Village Westbrook tenant, tearfully described a “horrible” year in her building.
May had not been back to her apartment in the three days leading up to the press conference after she was forced out when an upstairs leak brought her bathroom ceiling down and the Fire Department to her door at 4 a.m.
She said phone calls she made to have the problem addressed drew hostile responses from the property manager tenants only know as Josh or Josh Evans, from the management firm PVE Associates.
“I get hung up on,” May said. “Sometimes he hangs up on me in the middle of a conversation.”
PVE Associates was named in The Villager and The New York Times last month as a company run by developer Ben Shaoul, co-principal of real estate investment firm Magnum Management.
Josh is believed to be Josh Slepian, a property manager at Shaoul’s firm. However, Shaoul denies involvement with the 17 Westbrook buildings or knowledge of PVE Associates.
Last year, housing advocates named Shaoul one of the city’s 10 worst landlords.
May’s experience was echoed by fellow tenant Joanne Morton, who recalled her attempts to address persistent heating problems over one holiday weekend.
“Last November, for at least 15 days, our building had no hot water or heat,” she said. “I spoke to Josh the day before Thanksgiving to find out what is going to happen over the holiday weekend and would we be without heat. His response was ‘Buy a space heater.’”
Morton said, when she complained that using a space heater meant higher energy costs, Josh replied, “You’re not paying very much rent. You can afford a higher electric bill.”
Through The Marino Organization, a public-relations firm, Westbrook issued the following statement: “Westbrook Partners has an excellent, global reputation as a responsible real estate company and a good corporate citizen. An affiliate of Westbrook Partners is a minority owner of these 17 East Village properties and we do not exercise control over management practices at these properties.
“Some residents’ concerns were recently brought to our attention. But we have also heard from other residents about their appreciation for the improvements made to the properties. We have conveyed any concerns to the managing agent, PVE Associates, which has assured us that any legitimate concerns were being addressed.
“Westbrook Partners is part of a team including several not-for-profit groups that is bidding for the Spring Creek complex in Brooklyn. We are committed to preserving affordability even beyond the minimum 20-year period required of bidders. Our proposal would also retain the services of the existing management company.”
The community group ACORN has been organizing tenants of the 46-tower Brooklyn complex since Starrett City Associates announced its intention to sell in 2006. Although Jonathan Rosen, an ACORN spokesperson, said he had read the recent articles about Westbrook in The Villager and Times, he declined to comment on them.
Rosen said that, according to an agreement recently set up between elected officials, ACORN and the complex’s owners, “any eventual owner would have to agree to a myriad of terms which will guarantee to keep the complex affordable in the long run.”
Westbrook’s bid includes several partners, including Citigroup Inc., the New York City Central Labor Council, Phipps Houses, Provident Resources Group, the Metropolitan Council on Jewish Poverty and possibly Touro College.
