BRUSH - BUYERS AND RENTERS UNITED TO SAVE HARLEM, INC.

Rent-stabilized tenants reject lawyers' settlement with Pinnacle Group

2011-10-14T22:32:00.001-04:00

THE REAL DEAL

October 12, 2011 08:30AM

Tenants of Pinnacle Group buildings, largely in Northern Manhattan, want a judge to throw out a settlement their lawyers reached with the landlord for rent overcharges, the New York Daily News reported.

Five years ago tenants sued Pinnacle, one of the city's biggest rent-stabilized apartment owners, for illegal rent charges and harassing tenants in an effort to drive them out and increase rents. Lawyers found rent-stabilized tenants, whose rents are registered with the state, had been, in some cases, charged as much as $800 per month more than the state registry indicates.

As per the terms of the agreement reached by Pinnacle and the plaintiffs' lawyers, Pinnacle has hired a court administrator to settle the claims and award damages to the tenants.

However, many of the rents were set by the previous owners of the building, including notorious low-income housing owner Barry Singer, and merely continued by Pinnacle.

Under the agreement, Pinnacle is "not liable for any alleged rent overcharges for any rent set by a prior owner." That means many of the plaintiffs, who began renting before Pinnacle took control of the buildings, are not eligible for any award.

Plaintiffs will speak before a judge next week, urge him to toss the aforementioned settlement and seek damages that cover more tenants. [NYDN]

Furious tenants urge federal judge to toss rent deal with their hated landlord, Pinnacle

2011-10-14T22:16:00.001-04:00

Juan Gonzalez - NY Daily News

Wednesday, October 12th 2011

Tenants of one of the city's biggest owners of rent-stabilized apartments have asked a federal judge to reject a proposed deal their lawyers made with their landlord - Pinnacle Group.

"I'm one of the lead plaintiffs and I'm excluded from this settlement along with thousands of others," said tenant leader Andres Mares-Muro of the Mirabal Sisters Community Center.

In court papers filed last week, tenants called the deal "unreasonable, inadequate" and "extremely unfair" to a majority of more than 20,000 Pinnacle tenants.

They want Federal Magistrate Judge Ronald Ellis to delay or reject it when he holds a fairness hearing Oct. 20.

A five-year-old class-action suit alleges Pinnacle systematically engaged in illegal rent overcharges, massive harassment of tenants and "meritless evictions" - all aimed at driving out low-income tenants and sharply increasing rents for newcomers.

Under the proposed deal, all tenant claims would be quickly reviewed by a special court administrator, who would be paid for by Pinnacle. The administrator could award damages to tenants and additional financial penalties to the landlord.

Tenants are angry because the deal exempts the firm and its chief executive, Joel Wiener, from any claims for rent overcharges before 2004.

It also does not extend to overcharges instituted by a prior landlord, but never corrected by Pinnacle when it gobbled up thousands of run-down apartments a decade ago.

Take, for example, Hamida Moumouni, a Nigerian immigrant who rented an apartment on W. 141st St. in Harlem in 2003.

When Moumouni and his wife signed his original lease, their landlord was a notorious slumlord named Barry Singer, and their initial rent was $1,200.

Then Pinnacle bought the building, and Moumouni's rent increased steadily until it reached $1,419 in 2010.

By then, Moumouni had fallen behind in rent, and Pinnacle moved to evict him. That was when lawyers from the Northern Manhattan Improvement Corp. discovered the state's registered rent for the apartment back in 2003 had been just $460.

That means Singer overcharged Moumouni nearly $800 per month - and Pinnacle continued the illegal charges for years.

State law requires landlords to verify registered rents when they buy a rent-stabilized building, and it holds them liable for overcharges.

Last month, instead of being evicted, Moumouni won back rent and legal fees against Pinnacle in Housing Court worth nearly $100,000.

Yet the proposed class-action settlement would exclude people like Moumouni from the class of plaintiffs it covers.

"Pinnacle and the defendants shall not be liable for any alleged rent overcharge for any rent set by a prior owner of the building in question," the agreement specifies.

The angry tenants "are simply wrong and don't understand the facts," says Richard Levy, a lawyer for Jenner and Block. Levy filed the original case for the tenants and negotiated the settlement with Pinnacle.

At next week's hearing, Levy said, he and Pinnacle's lawyers will state unequivocally that the firm's tenants will still retain the right to ask the state housing officials to roll back illegal rent overcharges that occurred before 2004.

Matthew Chachere, a new lawyer the tenants asked to intercede for them, insists the deal "cuts out huge swaths of the class-action plaintiffs from any benefits under the settlement."

Next week, the judge will hear from the tenants themselves.

Tenant leaders bash deal with firm embroiled in class-action racketeering suit

2011-10-14T22:09:00.001-04:00

JUAN GONZALEZ - NEWS

DAILY NEWS STAFF WRITER

Friday, September 16, 2011

Back in 2006, this column revealed that one of the city's fastest-growing owners of rent-regulated apartments had declared war on an astonishing number of its tenants.

Over two years, Pinnacle Group LLC, owner of some 20,000 units - mostly in upper Manhattan, the South Bronx and central Brooklyn - filed 5,000 eviction notices in Housing Court.

At some buildings, such as the historic Dunbar Houses, a 534-unit complex in Harlem, or a 300-unit complex on Morrison Ave. in the South Bronx, Pinnacle tried to evict half the tenants within months of buying the buildings.

In one case after another, the Daily News found evidence the company harassed tenants into leaving, then quickly renovated the units so it could double or triple the rents.

Those stories, along with repeated protests by Pinnacle residents, prompted several investigations by authorities of what housing advocates called "predatory equity buyers" - investment groups that gobbled up rent-stabilized units during the real estate boom to deregulate them.

In 2008, then-Attorney General Andrew Cuomo reached a settlement with Pinnacle, requiring it to pay $1 million in rent overcharges to more than 300 tenants.

By then, tenant leaders had filed a class-action racketeering suit against the firm and its chief executive Joel Wiener. Those tenants were elated when, last year, a federal judge certified the class-action suit to proceed.

Earlier this month, Pinnacle and the firm representing the tenants suddenly announced a proposed settlement. Tenant leaders who spearheaded the suit immediately denounced the deal and are organizing tenants to ask a federal judge to reject it.

"This is a sham settlement," Ted Charron, a lead plaintiff, said. "Pinnacle conspired to harass and cheat tenants out of millions of dollars and our own lawyers turned this into just a rent overcharge case."

Charron and other tenant leaders say Jenner and Block, the firm that represented them pro bono, just didn't want to go to the expense of a full trial.

Richard Levy, the lead lawyer for the tenants, disagreed.

"We could never have done better," Levy said.

Under the deal, Pinnacle agreed to have a court-appointed administrator review all tenant claims of past overcharges, harassment and other rent-law violations and award individual damages with no cap.

The firm agreed to a series of procedures to protect tenant rights and to submit to a two-year period of monitoring.

In addition, Pinnacle would pay $2.5 million into a fund to finance legal representation for those tenants and up to $1.4 million for the tenants' law firm.

"This is a very good settlement," said Ken Fisher, a lawyer for Pinnacle. "You've got a claims administration process that will be done in an expedited process.

"We always said we made mistakes and certainly took responsibilities for those mistakes."

Pinnacle chose to settle the case to avoid spending millions on a drawn-out trial, he added.

"This is a complete whitewash of Pinnacle's responsibilities," said another lead plaintiff, Kim Powell. She is organizing fellow tenants to oppose the deal.

As in so many class-action suits, the biggest winners end up being the lawyers.

Deal Would Settle Tenants’ Harassment Suit

2011-10-14T22:06:00.002-04:00

NEW YORK TIMES By CARA BUCKLEY

Published: September 7, 2011

A settlement deal has been reached between lawyers for a large New York City landlord and its rent-regulated tenants, who claimed in a class-action lawsuit that they had been subjected to harassment, unlawful rent increases and aggressive eviction attempts during the real estate boom.

Under the terms of the deal, the landlord, the Pinnacle Group, will pay $2.5 million to legal and tenant-rights groups to help current and former tenants make legal claims for damages. The $2.5 million is separate from any damage awards. A court-appointed claims administrator will hear the complaints and decide whether to award compensation.

The Pinnacle Group, which owns about 15,000 apartment units citywide, must also set up a help line and follow new protocols like carefully notifying tenants of plans to increase rents or start evictions.

Tenant advocates and housing experts hailed the settlement deal, which was reached in early August and announced last week, for strengthening tenants’ legal rights in cases claiming harassment and unlawful evictions.

“This settlement seems to be a significant admission of wrongdoing by Pinnacle,” said Benjamin Dulchin, executive director of the Association for Neighborhood and Housing Development, which represents housing groups. He added that the deal confirmed tenants’ assertions that Pinnacle’s “misbehavior, harassing” and causing tenants to overpay their rents “was a key part of their business model.”

But Kenneth K. Fisher, a lawyer for Pinnacle, said the company had settled to avoid the cost of a potentially long trial. “The company has been proud of its record of providing housing for thousands of New York families,” he said, “and never felt the allegations had merit.”

Advocates for residents’ and tenants’ rights have long claimed that people in rent-regulated apartments owned by the Pinnacle Group were widely intimidated as part of the owner’s efforts to empty its buildings to make way for higher-paying tenants.

During the housing boom, scores of apartment buildings in far-flung pockets of the city were bought by what housing advocates described as predatory equity buyers, who paid more than what the buildings’ rent rolls could support. Tenants routinely found themselves showered with eviction notices, and new owners often ended up walking away from buildings after defaulting on their mortgages.

The Pinnacle Group, which spent hundreds of millions of dollars buying hundreds of apartment buildings from May 2004 to May 2006, has consistently denied any wrongdoing, saying it was trying to improve conditions in deteriorating buildings. Yet its practices were scrutinized by lawmakers and law enforcement.

In 2006, Pinnacle and the state attorney general’s office reached a settlement in which a forensic auditor examined rents for each of Pinnacle’s rent-stabilized units. As a result, Pinnacle paid $1 million in rent overcharges and interest to about 300 tenants.

In the class-action case, the plaintiffs claimed that Pinnacle had schemed to harass them. They also said Pinnacle had skirted the state’s rent regulation and other housing laws and had violated federal racketeering laws. In 2010, a federal judge granted the class-action status without addressing whether Pinnacle had violated the racketeering statute. But the judge said that if the tenants’ claims were true, racketeering could indeed have happened.

“It means that if you conspire to violate New York laws and displace tenants from a place you are running, you are subject to violating federal RICO conspiracy laws, and you can be sued,” said Andrew Scherer, author of “Residential Landlord-Tenant Law in New York” and a consultant to the plaintiffs.

News of the deal, which is expected to be completed at a fairness hearing in October, drew mixed reactions from tenants.

Bobby Jones, president of the tenant association at Dunbar, a large complex in Harlem that Pinnacle recently lost to foreclosure, said that the deal was “better than nothing,” but that Pinnacle had wrought lasting damage on the place. About 45 percent of Dunbar’s tenants left their homes or were forced out during Pinnacle’s five-year ownership, he said. Mr. Fisher said that the claim was “factually inaccurate,” and that during Pinnacle’s ownership no units were removed from rent stabilization and that turnover averaged 6 percent a year.

Kim Powell, a tenant leader at an existing Pinnacle building, said she and other named plaintiffs were “totally disappointed” with the deal. Among the issues it left unclear, she said, was who would be eligible for compensation. “The two attorneys may be happy with it, but we’re not,” Ms. Powell said.

Yet Richard F. Levy of the firm Jenner & Block, the plaintiffs’ lawyer, said the deal was in the best interest of the estimated 22,000 people who could be affected. “Certain matters needed to be compromised,” he said, “but this is a very good compromise.”

Tenant Lawsuit Against Mega-Landlord Gains Steam

2010-06-05T07:48:00.002-04:00

By Samia Shafi
Tuesday, Jun 1, 2010

Marc Fader/City Limits

Kim Powell is one of the nine original plaintiffs who filed suit against Pinnacle in 2007.
Morningside Heights — When The Pinnacle Group purchased the building where Kim Powell and her family were living in 1997, she and her family hoped their 19 years of housing woes might finally come to an end. Their dispute with the building's former owner had ended with a victory: a judge ordered their rent reduced $53 per month until necessary repairs were made. All they needed now was for Pinnacle to comply with that order, which is exactly what Powell says the company didn't do.
Not only would Pinnacle resist the order for the next 12 years – raising her rent to $705 and suing her for failing to pay it – they would also delay repairs and frequently fail to supply heat and hot water, according to a lawsuit that Powell and eight fellow tenants filed against the company in 2007. The company even installed three feet from Powell's door a device, Powell believed, to spy on her. The device consisted of an electrical junction box with a hole drilled in the face place.
More Tenants“It leaves a bitter taste on my family’s mouth since we had to deal with this so long," Powell says. "We spent a lot of mental energy in them coming to us and saying can we start anew and us extending our hand to them, only to be slapped one more time.”
Powell’s experience was not a series of isolated incidents, advocates say, but a classic case of predatory equity, a common landlord scheme that they hope will soon be restricted by the Pinnacle tenants' landmark lawsuit. In the scheme, real estate investors buy rent-controlled or stabilized buildings, then pressure the tenants – primarily through harassment and failing to make repairs – to vacate them. After a tenant leaves, the landlord rents or sells the vacant unit at a higher price.
"These hedge-fund backed landlords that acquired huge numbers of subprime apartments gambled on their ability to raise rents and evict low-income tenants," says Edward Josephson, director of litigation at South Brooklyn Legal Services. "Either the gamble pays off and they displace tenants or they don't succeed and their business model collapses."
The crash of the housing market in 2007 has already reduced the prevalence of predatory equity in New York City, but a tenant victory in the Pinnacle lawsuit would help ensure that when the market rebounds, the practice doesn’t. And this month, the prospect of such a victory grew brighter when a judge granted the plaintiffs class action status. Pinnacle owns over 420 apartment buildings in New York City, containing more than 21,000 apartments and 60,000 tenants. Gaining class action status will enable potentially thousands of current and former Pinnacle tenants to join the plaintiffs' case.
The Rent Stabilization Association, which represents property owners, said it’s too early to comment on the significance of the case. “It’s way too soon to know what impact it has” says spokesperson Frank Ricci. “We have to see the merits of the case. Right now it’s a very esoteric case, a very specific fact pattern with a very specific owner.”
Indeed, the case could drag on for several more years while the tenant’s attorneys labor to prove their case. The lawsuit alleges that Pinnacle and its chief executive Joel Weiner not only violated the New York Consumer Protection Act and rent stabilization laws and codes, but acted as a “criminal enterprise” under the Federal Racketeer Influenced and Corrupt Organizations Act (RICO), a law enacted to fight organized crime. That law applies to landlords who engage in predatory equity because, similar to an organized crime syndicate, they scheme to violate the law to make a profit, says Sateesh Nori, an attorney with the Legal Aid Society who has clients residing in Pinnacle buildings.
Proving that Pinnacle violated RICO will be the most difficult part of the case, because it will require plaintiffs to show that the company and Weiner engaged in a deliberate pattern of racketeering by violating over a 10 year period at least two of 35 crimes under the statute.
The other problem plaintiffs might face is convincing more tenants to participate, Powell says. In 2006, Pinnacle filed eviction proceedings against about 5,000 tenants. Since the plaintiffs filed suit, Powell contends, Pinnacle’s harassment and intimidation of tenants has worsened. “The massive fear that is being kicked out of your home,” says Powell. “What is perturbing to me even today, I have reason to believe, despite the signing of the settlement agreement they continued to conduct illegal practices.”
But if the plaintiffs succeed in obtaining an adverse judgment against Pinnacle, the company could lose billions of dollars. The judge could order the company to reimburse up to three times the rent it overcharged. Additionally, the state’s Division of Housing and Community Renewal can penalize landlords $250 for deliberate violations of rent regulations and $2,500 when it finds them guilty of harassing tenants to vacate apartments.
“I think if the plaintiffs prevail in Pinnacle, the precedent will create a strong additional disincentive for landlords to engage in broad predatory practices," says Josephson. "In fact, just the fact that the Pinnacle case has progressed as far as it has, has probably given landlords some food for thought."
The case is not the first to allege that landlords violated RICO laws, nor is it the first filed since the City Council passed the tenant anti-harassment law in 2008. But Josephson believes it could be the first time in New York City history that tenants have won class action status in a case filed under RICO.
Attorneys for the plaintiffs have set up a hotline for tenants with complaints against Pinnacle, and the Manhattan Borough President’s Office is recruiting tenant advocates in the 194 Pinnacle buildings in Manhattan to get more tenants involved in the lawsuit.
Powell recalls that when tenants in her building, 706 Riverside Drive in West Harlem, first began to realize that their problems with Pinnacle were systemic, their only option was to file a complaint with DHCR.
Now the court will have the opportunity to consider the impact on every alleged Pinnacle victim, Powell says. “While I sat back there in 1997, while I saw what I saw, I wasn’t able to articulate it 'til 2005, other than to say I saw something that was potentially terribly wrong,” she says. “I just needed to get someone to listen. I think we have that now.”

Editor's Note: City Limits has learned that the following article contains an inaccuracy, a mischaracterization and an omission. Pinnacle does not stand to lose "billions" in this case, in which it has moved for leave to appeal. Attorney Sateesh Noori did not assert--as the article might suggest--that he knows of any instances in which Pinnacle violated laws in a manner that could fall under the federal RICO law. Pinnacle, which through a reporting error was not contacted for this article, asserts that "it does not have any hedge fund backers." An article exploring the case more deeply is forthcoming.

Judge allows tenant lawsuit against hated Pinnacle Group landlord for harassment

2010-05-14T15:41:00.002-04:00

Thursday, May 13, 2010

Judge allows tenant lawsuit against hated Pinnacle Group landlord for harassment

BY Brian Kates DAILY NEWS STAFF WRITER
Thursday, May 13th 2010, 4:00 AM

Landlord Joel Weiner, owner of Pinnacle Group Corp, accused in a Manhattan Federal Court lawsuit of 'corporate slumlording.'

A federal judge has allowed thousands of tenants to sue one of the city's most hated landlords for trying to strong-arm them out of their apartments.
Manhattan Federal Judge Colleen McMahon granted current and former tenants the right to file a class-action suit against notorious landlord Joel Weiner. Damages could run into the millions.
Weiner and his Pinnacle Group are linked to 420 city buildings with at least 60,000 tenants across the city, according to Buyers and Renters United to Save Harlem, a plaintiff.
Tenants have long charged that Pinnacle launched harassment campaigns to drive them from their rent-regulated apartments.
"They placed a surveillance camera at my door when I complained about conditions," said Kim Powell, 48, who has lived in a Pinnacle apartment on Riverside Drive for 28 years.
"They held my [rent] checks and claimed I didn't send them. They have denied tenants heat and hot water, and when repairs are done, the work is invariably substandard."
McMahon's decision expands a suit filed by Powell and 10 other tenants in 2007 claiming Weiner inflated rents, failed to make repairs and systematically evicted tenants to raise rents.
In her April 27 order, McMahon wrote that if the allegations are true, "all of [Pinnacle's] rent-regulated tenants either have been subjected to or are at risk of being subjected to the same pattern of racketeering."
Any big payoffs could take years. Tenants first have to prove that Pinnacle violated federal racketeering laws by plotting to oust them from the cheap flats. If they succeed, they can then sue individually for damages.
The city Department of Housing Preservation and Development has cited many Pinnacle apartments for inadequate fire exits, lack of heat and hot water and lead paint. Some hazardous conditions have not been corrected for years.
The suit is open to current and former tenants who have rented from Pinnacle since 2004. Many vowed to add their names to the plaintiff list at a meeting held Wednesday by Manhattan Borough President Scott Stringer.
"Count me in," said Kahn Hightower, 42, who said he staved off attempts to evict his family from a Riverside Drive apartment. "Those people at Pinnacle almost made me homeless," he added.
Weiner's lawyer, former City Councilman Kenneth Fisher (D-Brooklyn), dismissed the allegations as "overblown."
"In an organization that manages as many properties as they do, they will make mistakes from time to time," Fisher said. "But that is a far cry from a claim that this was a vast conspiracy."Read more: http://www.nydailynews.com/ny_local/2010/05/13/2010-05-13_judge_allows_tenant_lawsuit_against_hated_pinnacle_group_landlord_for_harassment.html#ixzz0nobz9OTo

Judge Grants Class Action Status in Tenant-Pinnacle Suit

2010-05-14T15:21:00.001-04:00

Globe St. com
May 13, 2010

By John Jordan

New York City-The five West Harlem tenants that are suing New York City landlord the Pinnacle Group LLC are asking for tenants in Pinnacle buildings across New York City to submit evidence that will substantiate their charges.
A press conference was held on Wednesday at The Dunbar where the five West Harlem tenants, Manhattan Borough president Scott M. Stringer, several members of the City Council and the group Buyers and Renters United to Save Harlem (Brush) spoke of the importance of a recent decision by US District Court Judge Colleen McMahon in granting class action status to the case originally filed in 2007 against Pinnacle and its CEO Joel Weiner. The tenants charge the Pinnacle Group fraudulently inflated rents, failed to make needed repairs and groundlessly harassed tenants out of rent-regulated apartments throughout New York City.
Ken Fisher, an attorney representing Pinnacle in the case, says that it has filed for leave to appeal the class action status ruling rendered by Judge McMahon on April 27 with the US Court of Appeals.
Supporters of the tenants in their case against Pinnacle term the class action ruling as "one of the most far-reaching court decisions in New York City’s history that could potentially benefit thousands of tenants in rent-regulated apartments across the city." The decision certifies that the class consists of all persons who are rent regulated tenants in Pinnacle properties as of April 27, 2010 and a liability class for rent regulated tenants who lived in Pinnacle properties between July 11, 2004 and April 27, 2010.
Pinnacle’s Fisher, a member of the law firm Cozen, O’Connor, says, "three years into the litigation it is the same group of five tenants that are plaintiffs, which speaks for itself. Pinnacle is proud of its record of providing safe and affordable housing to thousands of New York families and is confident that at the conclusion of the case the allegations will be found to be baseless." He adds that four other tenants who had originally been part of the case have since settled and that no other Pinnacle tenants have come forward to join the lawsuit.
Representatives of the tenants state that Pinnacle and Weiner are linked to more than 420 apartment buildings that contain more than 21,000 apartment units and approximately 60,000 tenants throughout the five boroughs.
"This lawsuit is a huge victory for all working people in New York City and retired and elderly tenants, too," states Andres Mares-Muro, one of the five tenants that filed the lawsuit against Pinnacle. "At a time when we are all living on less and less and terrified of losing our jobs, this...suit is the first step in protecting us from losing our homes. It sends a [resilient] message to flippers and speculators..."
Stringer adds, "This lawsuit constitutes an unprecedented fight against [these] corporate landlords and a powerful show of resistance for middle- and low-income residents throughout the city who believe that illegal tactics are being used to drive them out."
Fisher said, in response to some politicians' comments, "It is disappointing that grandstanding politicians chose to involve themselves in this, rather than trying to come up with real solutions to New Yorkers' housing needs."
In December 2006, Pinnacle Group, LLC, while admitting no wrongdoing, reached an agreement with then New York State attorney general Eliot Spitzer in regards to alleged overcharges in some of its rent stabilized apartments that had recently become vacant and required repair. Fisher says that the overcharges centered on about 300 of the 9,000 vacant apartments in its portfolio and that Pinnacle sent refunds to the affected tenants who later took occupancy of the renovated apartments totaling about $900,000 and about $100,000 in interest.
A meeting described as "a class action classroom" has been scheduled on May 23 from 1 p.m. to 3 p.m. at the Oberia Dempsey Center on 127 West 127th St., by Stringer, the plaintiffs and BRUSH to provide Pinnacle rent regulated tenants with information concerning the litigation and provide the opportunity for tenants to submit evidence in the case.

Pinnacle Group Hit with Class-Action Suit

2010-05-08T11:00:00.002-04:00

The Real Deal

May 04, 2010 10:00AM

A class-action lawsuit that accuses controversial landlord Pinnacle Group NY and its CEO, Joel Weiner, of harassing rent-regulated tenants and evading New York's rent regulation laws has been certified to proceed in federal district court. Pinnacle, which controls or owns more than 400 apartment buildings throughout the city, was also accused of violating the federal racketeering statute, RICO, and the New York Consumer Protection Act. An attorney for Pinnacle called the allegations "baseless" and said the company plans to appeal. This isn't the first time Pinnacle has gotten into legal trouble. The company previously repaid more than $1 million to tenants after coming under intense pressure from the New York attorney general's office. [Crain's]

Big Residential Landlord faces Class-Action Suit

2010-05-08T10:51:00.000-04:00

By James Comtois
Published: May 3, 2010 - 2:21 pm

A federal district court judge has given the go-ahead for a class-action lawsuit to proceed against landlord Pinnacle Group NY and its chief executive, Joel Weiner.
Plaintiffs Marjorie and Theodore Charron, Andres Mares-Muro, Raymond Andrew Stahl-David, and Kim Powell allege that Pinnacle and Mr. Weiner have engaged in a wide ranging scheme to harass and intimidate its tenants and evade New York's rent regulation laws with its properties. In addition, the plaintiffs charge that Pinnacle's conduct violates the federal racketeering statute, RICO, and the New York Consumer Protection Act.
In her April 27 opinion, which did not address whether or not Pinnacle had violated RICO or the New York Consumer Protection Act, Judge Colleen McMahon of the U.S. District Court for the Southern District of New York certified two overlapping classes to proceed against Pinnacle. She stated that if the plaintiffs' allegations are true, then all of Pinnacle's rent-regulated tenants “either have been subjected to, or are at risk of being subjected to the same general course of allegedly fraudulent and harassing conduct, the same pattern of racketeering.”
According to Jenner & Block, the law firm appointed to serve as lead counsel for the plaintiffs, the court certified a class comprised of all persons who, as of April 27, 2010, are tenants in rent-regulated apartments in New York City directly or indirectly owned in whole or in part by the Pinnacle Enterprise. The company controls or owns over 400 apartment buildings across the city.
The court also certified a liability class so that those tenants seeking damages for Pinnacle's conduct will have the opportunity to prove that Pinnacle and Mr. Weiner violated RICO and state consumer protection laws. The liability class is comprised of anyone who was a tenant in a rent-regulated apartment in the city directly or indirectly owned by Pinnacle at any time between July 11, 2004, and April 27, 2010.
Ms. McMahon directed Jenner & Block to submit a proposed method of notifying all members of the liability class of the suit to the court within 14 days.
Pinnacle's conduct has previously been the subject of an enforcement action by the New York attorney general's office, which resulted in Pinnacle repaying over $1 million to tenants.
Ken Fisher, the attorney representing Pinnacle, said in a statement that the landlord is "in the process of reviewing the court's procedural decision" to determine its rights for an appeal, adding that the firm believes the suit's allegations are "baseless and that will be proven if and when this matter goes to trial."

New York Landlord's Portfolio Goes Into Special Servicing

2009-04-06T20:12:00.002-04:00

Pinnacle Group Not Meeting Financial Expectations on Upper West Side Portfolio
By Mark Heschmeyer
April 1, 2009
Standard & Poor's Ratings Services placed its ratings on commercial mortgage-backed securities (CMBS) GE Commercial Mortgage Corp. Series 2007-C1 Trust on CreditWatch with negative implications. The action comes primarily from problems with loans tied to New York landlord Pinnacle Group and its owner Joel Weiner. The loan, called the Manhattan Apartment Portfolio loan ($192.1 million), is secured by 1,083-unit apartment units in 36 apartment buildings on the Upper West Side of Manhattan. Most of the units in the portfolio are subject to rent-stabilization laws and the borrowers had intended to convert rent-stabilized units into market-rent units. The loan was transferred to special servicer LNR Partners Inc. on Feb. 26. Standard & Poor's preliminary analysis of the MAP loan indicates a 48% valuation decline since issuance in 2007. At issuance, Standard & Poor's estimated the borrower would be able to convert 88 units per year to market rents; however, only 14 units have been converted since issuance. Since its October 2008 review the interest reserve has declined 34% to $11.8 million. The master servicer, KeyBank Real Estate Capital, reported debt service coverage of 0.36x for the year-ended ended Dec. 31, 2008, compared with 0.40x for the year ended Dec. 31, 2007. Wiener has ownership and management interests in an estimated 100 buildings totaling approximately 20,000 rental apartment units in the New York City metropolitan area. Currently, New York City landlords cannot increase rental rates on rent stabilized units more than approximately 4% annually until they reach $2,000 per month and the tenant income exceeds $175,000 for two consecutive years. New York state is proposing tenant-friendly changes that could increase the rent trigger to $2,700 and the income trigger to $250,000. This can extend a unit's participation in the rent regulation program up to eight additional years, according to recent analysis by Fitch Ratings. The Manhattan Apartment Portfolio properties in GE 2007-C1 consist of 36 multifamily buildings (1,083 apartment units and two office suites) situated between West 100th and West 161st streets.
# of Bldgs # of Units Neighborhood Boundary
21 484 Upper West Side Between West 100th and West 108th streets
4 104 Morningside Heights Between West 113th and West 115th streets
6 311 West Harlem Between West 127th and West 139th streets
2 53 Hamilton Heights Between West 147th and West 148th streets
3 131 Washington Heights Between West 156th and West 161st streets

Controversial Pinnacle Group Sheds Uptown Property

2009-04-06T20:03:00.002-04:00

The NewYork Observer
By Dana Rubinstein
March 25, 2009 3:32 p.m

Controversial landlord Pinnacle Group has shed one of its uptown properties for $12.5 million, according to city property records.
A group called Latham Properties, affilitated with the budget Latham Hotel on East 28th Street, bought 169-175 East 101st Street, a 119-unit apartment building, on February 26.
The buyer could not be reached for comment. The seller had acquired the building in 2004 for $9.4 million.
Pinnacle Group, which, according to a July 2007 New York Post article titled "'Slum Bum' Hit with RICO Suit," owns 420 buildings in Manhattan and the Bronx, has been the subject of repeated attacks by housing advocates for its tactics in turning affordable units into market-rent apartments.
According to a 2006 Village Voice exposé, a community forum on Pinnacle's alleged abuses attracted 200 residents:
One by one, residents accused Pinnacle of aggressive court tactics—attempts to violate tenants' succession rights, for example, and to evict for bogus reasons. They complained that the company fails to make repairs, or delays repairs, or does shoddy improvements to raise rents beyond regulated limits. Mostly, they blasted the real estate giant for moving into their neighborhoods and moving them out.
In January of 2008, Pinnacle hired Eastern Consolidated to market a portfolio of its properties, hoping to get more than $70 million for 384 apartments, according to an article by my colleague Eliot Brown. Sources say that Eastern Consolidated did not do this deal.

Kid to Riverside Tenants: No Garage Related Rent Hike

2008-12-28T12:40:00.003-05:00

Brooklyn Heights Blog
December 17th, 2008

New York State Senator-elect Daniel Squadron has written tenants of the Riverside Apartments assuring them that they will not be subject to garage construction related rent increases. Squadron spoke to the building’s landlord, the Pinnacle Group, who claim that they will not seek an MCI increase for the construction of its proposed garage.
The content of the letter after the jump.

To the residents of Riverside Apartments

Dear Neighbors:

I want to share a quick update with you about my ongoing conversations with the owner of your building.

Riverside tenants have expressed a few concerns to me: that the proposed garage construction will disrupt life in the building, that it could permanently make the courtyard impossible to enjoy, and above all that the building owner might use the garage construction to seek a Major Capital Improvement (MCI) rent increase for rent-regulated tenants.

I want to let you know that I have personally received an assurance from the landlord’s representative that the landlord will not seek an MCI increase for the work he proposes to do to install a garage. Additionally, the landlord is not allowed to use any garage work as a pretext for evicting any tenants.

This news is an important development and I wanted to share it with you as soon as possible. Of course, it is only the beginning of a longer process. As I expressed previously to tenants in the building, I have serious concerns about the proposed garage, its impact on the quality of life for residents of the building, and the precedent it would set for the Heights Historic District. I look forward to continuing to work with the tenants of the building.
Please feel free to call my office any time with concerns about this or any other issue. I can
be reached at 646-472-5712 or info@danielsquadron.org.

Role of Private Equity Worries Tenant Advocates

2008-07-23T09:56:00.000-04:00

NORWOOD NEWS

July 10, 2008

“The prices being paid for Bronx apartment buildings are out of step with the buildings’ actual profitability.”- Greg Jost University Neighborhood Housing Program

by CHLOE TRIBICH

Ed. note: This article has been corrected. In the original version we erroneously reported that the Pinnacle Group had purchased 10 Bronx buildings in 2008. The buildings were purchased by several limited liability corporations (LLCs) through Chestnut Holdings. The Norwood News regrets the error.

In 2005, when the Pinnacle Group first roused the ire of tenants for aggressive tactics in housing court, landlords funded by unregulated capital were an anomaly. More common were the likes of Nicholas Haros and Frank Palazzolo, owners reviled for their determination to squeeze rental income from deteriorating buildings.

Pinnacle is backed by the Praedium Group, which is in turn controlled by the Caisse de depot et placement du Quebec, one of the top 10 real estate pension fund managers in the world. No longer just the province of local landlords, rent regulated Bronx real estate has whetted the appetite of international finance.

Pinnacle has been joined in the northwest Bronx by Ocelot, backed by the Israeli-owned Eldan Tech Ltd.; SG2, backed by Blackrock, of which Merrill Lynch owns 50 percent; Urban American Management, created by the Ramius Capital Group; and Normandy Investment Partners, which is funded primarily by international investment and corporate and state pensions. These firms have purchased portfolios of properties from New York-based landlords such as Nicholas Haros, the Palazzolo Investment Group, Jacob Selechnik and the Bodak family. The University Neighborhood Housing Program estimates that over 14,000 apartment units in the Bronx are owned by private-equity-backed landlords.

The management style of these firms – including level of commitment to repairs and aggressiveness in housing court – varies. But they share the basic perspective that rents in regulated buildings can be increased significantly through “value enhancement” and “aggressive management” – catchphrases that reflect a strategy of capitalizing on vacancies to increase rents and carrying out Major Capital Improvements.

From the landlords’ perspective, gentrifying neighborhoods, where regulated rents are far below market, are the most fertile grounds for this strategy. In Urban American’s Sunnyside, Queens properties, for example, new renters are paying upwards of $1600 for two bedrooms, most of which underwent improvements or repairs during vacancy. Some apartments have even surpassed the $2000 rent deregulation mark.

Gentrification on Kingsbridge?
But gentrification feels a long way off from 131 W. Kingsbridge Rd. According to city public records, this building was purchased by SG2 for just over $100,000 per apartment in February 2007. There are 384 violations in this 31 unit building, 239 of them documented since May 2007.
Gladys Cardona has lived at 131 W. Kingsbridge Rd. for 10 years. When her bathroom ceiling fell, exposing wooden slats and pipes from the apartment above, SG2 didn’t respond to her phone calls. Only when HPD threatened to deploy its emergency repair unit did the landlord order the ceiling patched, she said.

“I’m tired of this,” said Gladys, who is 60 and still battles vermin infestation and lack of hot water. “But the costs of moving are very high.”

Miguel Jimenez, Gladys’ neighbor, shares her concerns. He says he called SG2’s Walton Avenue office four times last month about the hole in his bedroom ceiling and didn’t receive a call back. Finally he visited the office in person and secured a commitment from manager Evelyn DeJesus to address the problem. Jimenez never heard from her again and DeJesus did not return two voicemail messages or an e-mail from the Norwood News.

Jimenez’s rent is $922, but Section 8 pays the majority. Like Cardona, he would like to move, but cites fees for credit checks, moving costs and security deposits as expenses he can’t afford. For now, the two are staying where they are, hoping that organizing assistance from the Northwest Bronx Community and Clergy Coalition will help to force repairs.
Cardona and Jimenez are not alone. Their neighborhood, Kingsbridge Heights, is one of the poorest neighborhoods in the poorest borough in the City. According to the Furman Center, 59 percent of households in this community district make less than $35,752 a year; 31 percent make less than $16,556. Though rents here are low by city standards, the median proportion of income tenants pay for rent – stands at 37.8 percent. Thirty percent is considered acceptable by HUD.

Further east, at the SG2-owned 750-760 Pelham Parkway South, tenant association president Ray Ruiz lists broken front door locks, malfunctioning boilers and rent overcharges as persistent problems. This building has nearly 140 units and 768 housing maintenance code violations, 687 documented in the past year alone. “We thought Michael Goldberg [the previous landlord] was bad, but at least they answered the phone,” says Ruiz, who has lived in his apartment since 1997. “SG2 people just have voicemail that they never check.”
Some improvements

In some SG2 buildings, however, tenants have seen improvement. Charles Long, a fire safety inspector and 10-year resident of 1212 Grand Concourse, joined with members of Community Action for Safer Apartments (CASA) to meet with SG2 manager John Sutherland. Long was mostly pleased – management responded quickly to concerns about inadequate outdoor lighting and elevator breakage.

“In some ways SG2 is a saint compared to the previous landlord [Jacob Selechnik],” said Long. “But they’re in business, and they wouldn’t be curing these violations if they didn’t expect to get their capital improvement increases.”

Long counts on continued maintenance improvements and hopes that noise pollution and late-night partying will come under control as well. But he is ambivalent about what these changes will mean for the poorest tenants – those on public assistance and Section 8 – who he is certain will be pushed out. “I have never seen such an army of workers sent to renovate vacant apartments,” Long says.. He has not met any new tenants yet, but believes they will pay significantly more.

These observations have not escaped community groups and local leaders. Fernando Tirado, district manager for Community Board 7, held a meeting with SG2 managers in February 2008. “We wanted to meet with them because we were concerned about the number of properties they had purchased – 23 in our Community Board alone and 75 in the whole Bronx-- but we got a good response. They assured us that they were not there to push people out, that they were there to improve the properties and that this was an investment that they cared about.” Tirado reports that they have not heard complaints from tenants of SG2 buildings in recent months.

In 2005, the University Neighborhood Housing Program noted that purchase prices of Bronx buildings were increasing disproportionate to rental income, sometimes to as much as $67,000 per unit. UNHP worried that landlords’ inability to make mortgage payments on overleveraged properties would lead to another wave of disinvestment and property deterioration.
According to City records, in 2007, SG2 paid $6,632,467 for 1212 Grand Concourse -- $108,729 per apartment. There is little in the data, it seems, to justify SG2’s enthusiasm. According to the Rent Guidelines Board, Bronx landlords’ net operating income increased only 3% from 1990 to 2006, far less than the other boroughs.

And unlike poor renters in Washington Heights or Sunnyside, Bronx tenants live far from Starbucks and other markers of middle class desirability. It is unclear where – if tenants like Cardona and Jimenez were to leave -- their higher-paying successors would come from.

“The prices being paid for Bronx apartment buildings are out of step with the buildings’ actual profitability,” said Greg Jost of UNHP. “Landlords’ expenses are increasing faster than rent income, but these sales seem to assume that either the building can be flipped for a higher amount, or that rents can be driven way up, or both. But residents’ incomes here are among the lowest in the city and I don’t see any higher income folks moving to our area.”

Now batting: Pinnacle's baseball league

2008-07-23T09:44:00.000-04:00

The Real Deal
05/01/2008

It's baseball season and the Pinnacle Group, which has been investigated by the state attorney general and the Manhattan district attorney for allegedly trying to remove rent-stabilized tenants, is pitching something it hopes will bring some good PR. It has sponsored the New York City Middle School Baseball League, a new spring league for 200 middle school students. Neighborhoods represented include Chinatown, Lower Manhattan and West Harlem. Teachers launched a similar league two years, but few students could afford the $30 uniforms. Now Pinnacle is paying for uniforms, gloves and equipment. CEO Joel Wiener has led Pinnacle's controversial effort to buy more than $1 billion in distressed buildings in Upper Manhattan and the Bronx over the past few years. TRD

Group Wields Racketeering Law Against Landlords to Combat Illegal Immigration

2008-07-23T09:42:00.000-04:00

By THE ASSOCIATED PRESS
Published: June 22, 2008
PLAINFIELD, N.J. (AP) — A federal lawsuit challenging the right of landlords to rent to illegal immigrants has stoked tensions over immigration that have been rising for years here.
A group opposed to illegal immigration filed suit against a Plainfield property management company this month, seeking to set a legal precedent by using a federal law normally employed against racketeers to punish landlords who rent to illegal immigrants.
The lawsuit accuses the company, Connolly Properties, of allowing so many undocumented tenants to live in its buildings that it amounted to unlawful harboring and should be considered a criminal enterprise that encouraged illegal immigration.
The suit was brought by the Immigration Reform Law Institute in Washington — the legal arm of the Federation for American Immigration Reform. The institute previously supported ordinances in Hazelton, Pa., and Riverside, N.J., that tried to punish landlords who rented to illegal immigrants or businesses that hired them.
A judge overturned the Hazelton ordinance, ruling it unconstitutional, and Riverside rescinded its ordinance, with officials saying the town could not afford the legal costs of defending it.
Flor Gonzalez, head of the Latin American Coalition in Plainfield, worries that her city may become the latest battleground in the nationwide debate over immigration.
She says that tensions over the city’s large immigrant population have been rising, with a recent series of beatings and robberies of immigrants, raids by federal immigration officials and ticketing of day laborers by the police.
“This is the worst it’s been. There is a lot of unfriendliness and disrespect against immigrants, and a lot has been happening quietly,” Ms. Gonzalez said. “We need big help in this town.”
Plainfield’s mayor, Sharon M. Robinson-Briggs said that she was not familiar with the details of the lawsuit, but added that immigrants deserved respect, regardless of their status.
“All our residents deserve to be treated fairly and equitably, whether they are born here or not,” she said.
The lawsuit was filed against Connolly Properties on behalf of a former Connolly employee and two tenants who are American citizens. The tenants charge that they were steered into buildings occupied by illegal immigrants who were too afraid about their legal status to complain about decrepit conditions, according to Michael M. Hethmon, a lawyer for the Reform Law Institute.
Connolly Properties has several rental complexes in northern New Jersey and Allentown, Pa.
Ron Simoncini, a spokesman for Connolly, said executives were bewildered as to why the company had become the target of the suit, which was filed under the Racketeer Influenced and Corrupt Organizations Act, known as RICO.
He added that he could not comment further before the company filed a response to the suit.
Mr. Hethmon said his group decided to take the case as part of its strategy of “attrition through enforcement,” or urging illegal immigrants to leave the country by making it more difficult for them to find employment and housing.
“We have felt for a long time that the racketeering statute would be useful in dealing with situations where businesses and commercial enterprises were heavily involved with illegal immigration,” Mr. Hethmon said.
“We’ve also felt that individual citizens, communities, neighborhoods and law-abiding small businesses have always needed tools with which they can defend themselves against the harmful effects of illegal immigration.”
Using anti-racketeering laws to prosecute landlords is a strategy that immigration experts say they expect to be tried in other parts of the nation.
“I think it’s a new tactic, because some of the other things haven’t worked,” said Donald W. Benson, a lawyer in the Atlanta office of the San Francisco labor law firm Littler Mendelson.
“Congress couldn’t reach a consensus to reform the immigration laws, states are trying to fill in the gaps and they’re having varied success, and local groups are trying to work through local ordinances, so it’s just one part of a much bigger picture of immigration struggles in the U.S.,” he said.
“I have no idea why they picked Plainfield,” said Christian Estevez, a member of the Plainfield school board who also sits on Gov. Jon S. Corzine’s panel on immigrant policy.
“This has caught us by surprise.”
Mr. Estevez said that he and other Plainfield residents were contacting national immigration advocacy groups for help.
According to the 2000 census, Plainfield, a city of some 50,000 people, is about 60 percent black, with the remainder roughly split between white and Hispanic.
In the past decade, Ms. Gonzalez said there had been a large influx of Hispanic immigrants, mostly from Central America.
The Plainfield City Council president, Harold Gibson, said he was unaware of the lawsuit, but that city officials had been trying to address concerns over immigration.
He cited the city’s efforts to find a solution to the day laborer situation that respected the laborers’ right to look for work while addressing community concerns.
“I think that the people in Plainfield, in terms of the City Council and the general population, they frown on illegal immigration, they don’t want undocumented persons living in the town, generally speaking,” he said.
“However, my position is that I don’t think we should set ourselves up as an immigration authority in terms of people who come from other countries and work hard to better themselves and help their families.”

Rent Destabilized

2008-05-21T16:32:00.000-04:00

Gretchen Morgenson, assistant business and financial editor and columnist at The New York Times, and Ben Dulchin, deputy director of the Association for Neighborhood and Housing Development, discuss the impact of investment companies on New York’s rent stabilized housing stock. Then, Frank Ricci of the Rent Stabilization Association, representing landlords of rent-regulated buildings, and Rob McCreanor, director of legal services at the Immigrant Tenant Advocacy Project of the Catholic Migration Office in Sunnyside, Queens. Open Phones: Eric Gioia, Queens Councilmember (D-26), is holding hearings on this issue. Do you live in a building that’s recently been bought with venture capital, with landlords such as Vantage, Normandy Partners, The Dermot Company, Westbrook Partners or the Dawny Day Group? Talk to Councilman Gioia about your experience.
"As Investment Firms Buy Up Buildings, Tenants See Bullies" NYT, 5/9/2008

http://www.nyc.org/shows/b1/eposides/2008/05/12

As Investment Firms Buy Up Buildings, Tenants See Bullies

2008-05-21T08:45:00.001-04:00

By GRETCHEN MORGENSON
New York Times

Published: May 9, 2008
Private investment firms have been amassing what may seem like unusual stakes in New York real estate: they have bought hundreds of apartment buildings with thousands of rent-regulated units across the city that produce decidedly meager returns.

Investors as Landlords

Times Topics: Rent Stabilization and Rent Control

As regulatory filings and promotional materials show, the companies expect to generate higher returns quickly by increasing rents after existing tenants vacate their units. Their success depends upon far higher vacancy rates than are typical in rent-regulated apartments in New York.Some residents and tenant advocates say that they began seeing what they consider a pattern of harassment of low-income tenants this year and suspect that it is a result of the new owners’ business models. Tenants have been sued repeatedly for unpaid rent that has already been received by the landlords; they have been sent false notices of rent bills, lease terminations and non-renewals; and they have been accused of illegal sublets. The companies dispute the charges of harassment and say they are protecting their rights.Nevertheless, tenants must answer the notices in court, but many have responded by moving out, court documents indicate. When they vacate the apartments, the owners can increase the rents substantially. “Predatory equity is undermining the best efforts of New York City and state elected officials to slow the loss of affordable housing,” said Benjamin Dulchin, deputy director of the Association for Neighborhood and Housing Development, a nonprofit organization. “Both the private equity funders and the lending institutions are aware, or should be aware, that harassment of tenants is taking place as a result of their financial models.” Private investment funds have boomed in recent years, buying companies they considered undervalued in industries as diverse as communications, hotels and energy, streamlining operations and then selling them at a profit. For example, private equity firms have bought nursing homes, often slashing expenses and reducing staff to increase their profit. New York provides an unusual opportunity because it is one of the few cities with a large inventory of apartments whose rental rates are regulated and kept below market levels. In the last four years, developers backed by private equity firms have acquired almost 75,000 rent-regulated apartments, Mr. Dulchin said, or about 6 percent of the city’s 1.2 million such units. Major private equity-backed participants in this market include Vantage Properties, which has partnered with Apollo Real Estate Advisors; the Pinnacle Group, a unit of Praedium Capital; and Normandy Real Estate Partners. These companies often make clear that raising rents is crucial to their financial goals. On its Web site, Normandy Partners states “the increased institutional appetite for New York City rent-stabilized housing transactions” and adds: “There is a near-term opportunity to increase cash flow by converting rent-stabilized apartments to market rate as tenants vacate units.”The companies say that they are not harassing tenants and that they are only trying to protect their rights by enforcing legitimate rules governing regulated apartments. But the New York City Rent Guidelines Board says the vacancy rate on rent-regulated apartments is 5.6 percent each year. Buildings with vacancy rates far higher suggest resident harassment, tenant advocates say. Vacancy rates have risen above 20 percent in some buildings owned by Vantage Properties; in some Normandy buildings, the rates exceed 30 percent. If an apartment is rent regulated, yearly increases cannot exceed the amount set annually by the Guidelines Board. Most recently, it was 3 percent on a one-year renewal lease. When an apartment becomes vacant, rents can climb as much as 20 percent. When that rent rises above $2,000, regulations no longer apply, and tenants must pay market prices. To generate returns expected by private equity investors and to pay off the debt used for their purchases, tenant advocates say that managers of the properties are intimidating residents in the hopes of forcing them to leave so that rents can be raised.

Rent-regulated apartments account for 57 percent of the total in the Bronx, 42 percent of the apartments in Brooklyn, 59 percent in Manhattan, 43 percent in Queens and 15 percent of those on Staten Island, the Guidelines Board says. Many of the buildings bought by private equity investors are in neighborhoods that are being gentrified.

Vantage Properties, led by Neil L. Rubler, has paid more than $1 billion in the last two years to buy 9,200 rent-regulated apartments in Queens and Upper Manhattan. Investing alongside Vantage in many buildings is Apollo Real Estate Partners, an investment firm founded by William Mack in partnership with Apollo Management, a private equity firm created by Leon D. Black, a former Drexel Burnham Lambert banker and acolyte of Michael R. Milken . Last month, Mr. Black announced a plan to sell $500 million worth of Apollo Management shares to the public. Apollo Real Estate Partners will not be part of that sale. A spokesman for Mr. Black said it was a separate company in which he had a stake but exercised no control over it. In a group of buildings in Queens with 2,124 apartments, Vantage has filed almost a thousand cases in housing court against tenants since October 2006, according to Robert McCreanor, director of legal services at the Immigrant Tenant Advocacy Project of the Catholic Migration Office in Sunnyside.Mr. McCreanor said he searched public records for similar actions by the previous landlord. He found no more than 350 in any year. “What’s offensive about these business practices is they seek to generate above-average profits by displacing poor people and people who are vulnerable,” Mr. McCreanor said.A spokeswoman for Apollo Real Estate declined to comment on the accusations. But Mr. Rubler called them baseless. “Any exploration of the way we conduct business would reveal that we are steadfastly determined to uphold the rights of our residents and have absolutely no interest in harassing them,” he said. “They are our valued customers, and we treat them as such.”Mr. Rubler said most of his tenants have positive experiences. Claudia Williams, of Corona, Queens, was asked by Mr. Rubler to talk with a reporter. She said that Vantage was allowing her to live in her mother’s apartment even though she had not been the primary leaseholder. Phyllis Miller, a resident of Savoy Park in upper Manhattan, said she believed that tenants who were unhappy with Vantage simply disliked change.But Jose Ricardo Aguaiza, 45, who works as a doorman in Manhattan, said he has lived in the same apartment in Woodside for 14 years and never had a problem until Vantage took over in 2006. Since July 2007, Mr. Aguaiza has been sued by Vantage three times, twice for nonpayment of rent that he was able to demonstrate the company had received. “They refused to give me a renewal contract,” Mr. Aguaiza said. “And in court, the lawyer from Vantage offered to give me three months’ free rent for moving out.” Mr. Aguaiza said he turned down the offer. On April 10, Mr. Aguaiza and five other rent-stabilized tenants living in Queens sued Vantage. The plaintiffs say the company has engaged in deceptive practices that violate New York’s consumer protection laws. Five more tenants are joining the suit.Janice Williams, who works as a freelance producer in television, has lived in a Vantage building in Sunnyside since July 2005 and is a plaintiff. When she moved in, the building was owned by Nathan Katz Realty. In October 2006, Vantage bought the building. Ms. Williams said the property managers rejected her request for a lease renewal in April 2007. They said she was not entitled to the rent-regulated unit because her primary residence was in Greenwich, Conn. But the Sunnyside apartment has been her primary residence since September 2005, Ms. Williams said, and is on her driver’s license and her voting card. She appealed to the New York State division of housing and community renewal and won. “Our apartment building is 72 units, and a little over 20 apartments in the span of a year and a half have turned over since Vantage bought it,” said Ms. Williams, who has organized tenants.The turnover Ms. Williams cited is in keeping with a description of Vantage’s strategy in a 2007 document filed with the Securities and Exchange Commission after its purchase of 455 rent-regulated apartments in Washington Heights. The filing described the company’s business model as a “recapturing” strategy. Under the plan, Vantage expected in its first year to turn over 20 percent to 30 percent of the units, five times the typical vacancy rate. Vantage aimed to recapture 10 percent of the units each year afterward. Only 5 of the 455 units were empty at the time of the filing. All but one unit was regulated, with average monthly rent of $752, or 65 percent below market. Once the apartments become vacant, the document said, Vantage will renovate the units and raise rents “to market levels.” That will generate enough cash to service the $70 million in debt that comes due in 2014.Vantage’s debt service is an estimated $1,098 monthly on each unit, almost 50 percent more than the average rent. Mr. Rubler said that the description of the recapture program was “not our words,” but those of the debt security’s underwriter, Credit Suisse Securities. “I think they overstated significantly the focus on turnover in the business plan,” he said.When asked about legal actions taken against tenants, Mr. Rubler said all were mounted solely to protect his company’s rights. “Only in instances where we need to act to protect our own rights do we ever find ourselves in any litigation with a tenant and it is never with the intention to harass them,” he said.The company is also meeting with its tenants to improve communications, he said. Normandy Partners, with almost 2,000 rent-regulated apartments in 42 buildings in the Bronx, East Village and Sunnyside Queens, is another significant landlord backed by private equity. It is a partner with Vantage in 1,650 units in Queens, the Bronx and Brooklyn. Mr. Dulchin said the Normandy Partners’ buildings have also had high turnover — more than 30 percent — since they were purchased by the investors. A spokesman for Normandy declined to comment. Pinnacle Group is a third big developer that has joined forces with a private equity firm, Praedium Capital of Chicago. In December 2006, Pinnacle settled a suit brought by the New York attorney general’s office accusing it of rent-gouging. Pinnacle paid $100,000 without admitting to or denying the accusations. The company did not return a phone call seeking comment.Responding in part to indications that harassment is systemic, Mayor Michael R. Bloomberg signed legislation in March making it illegal for a landlord to file repeated and baseless court proceedings to force a tenant to vacate an apartment. Under previous rules, tenants could take their landlord to housing court only over the apartment’s condition or for a failure to provide essential services.

Victory for Tenants as Harassment Bill Passes

2008-03-04T23:26:00.000-05:00

By Bennett Baumer February 28, 2008 Posted in IndyBlog Email this article
Yesterday the New York City Council unanimously passed Intro 627-A, a bill that gives tenants the right to sue landlords for harassment. The bill was cosponsored by Speaker Christine Quinn among 34 other council members. The harassment bill is a big victory for tenants under the gun to move out of affordable rent-regulated apartments that landlords could charge exorbitant rates.
The landlord lobby – the Real Estate Board of New York (REBNY) and Rent Stabilization Association had waged a concentrated campaign against the bill. The landlord lobby’s central line of attack was to argue that Intro 627-A would clog the courts with tenant initiated frivolous lawsuits. In opposing the pro-tenant legislation, real estate attorney Adam Leitman Bailey commented that Intro 627-A would cause “thousands of lawsuits, millions of dollars in legal fees.”
Harassment Bill Says: March 4th, 2008 at 4:39 pm
Proposed Int. No. 627-A
By Council Members Garodnick, Mark-Viverito, The Speaker (Council Member Quinn), James, Comrie, Mendez, Jackson, Lappin, Gerson, Palma, Liu, Brewer, Yassky, Dickens, Recchia Jr., Gioia, DeBlasio, Eugene, Addabbo Jr., Gentile, Gonzalez, Koppell, Monserrate, Sanders Jr., Sears, Stewart, Martinez, Arroyo, Foster, Vann, Baez, Mealy, Avella, Barron, White Jr., Gennaro and The Public Advocate (Ms. Gotbaum).
A Local Law
To amend the administrative code of the city of New York in relation to the duty of an owner to refrain from harassment of tenants and remedies for the breach of such duty.
Be it enacted by the Council as follows:Section 1. Subdivision a of section 27-2004 of the administrative code of the city of New York is amended by adding a new paragraph 48 to read as follows:48. Except where otherwise provided, the term “harassment” shall mean any act or omission by or on behalf of an owner that (i) causes or is intended to cause any person lawfully entitled to occupancy of a dwelling unit to vacate such dwelling unit or to surrender or waive any rights in relation to such occupancy, and (ii) includes one or more of the following:a. using force against, or making express or implied threats that force will be used against, any person lawfully entitled to occupancy of such dwelling unit;b. repeated interruptions or discontinuances of essential services, or an interruption or discontinuance of an essential service for an extended duration or of such significance as to substantially impair the habitability of such dwelling unit;c. failing to comply with the provisions of subdivision c of section 27-2140 of this chapter;d. commencing repeated baseless or frivolous court proceedings against any person lawfully entitled to occupancy of such dwelling unit;e. removing the possessions of any person lawfully entitled to occupancy of such dwelling unit;f. removing the door at the entrance to an occupied dwelling unit; removing, plugging or otherwise rendering the lock on such entrance door inoperable; or changing the lock on such entrance door without supplying a key to the new lock to the persons lawfully entitled to occupancy of such dwelling unit; org. other repeated acts or omissions of such significance as to substantially interfere with or disturb the comfort, repose, peace or quiet of any person lawfully entitled to occupancy of such dwelling unit and that cause or are intended to cause any person lawfully entitled to occupancy of a dwelling unit to vacate such dwelling unit or to surrender or waive any rights in relation to such occupancy.§2. Section 27-2005 of the administrative code of the city of New York is amended by adding a new subdivision d to read as follows:d. The owner of a dwelling shall not harass any tenants or persons lawfully entitled to occupancy of such dwelling as set forth in paragraph 48 of subdivision a of section 27-2004 of this chapter.§3. Subdivision h of section 27-2115 of the administrative code of the city of New York is amended by numbering the existing section as paragraph 1 and by adding a new paragraph 2 to read as follows:(h)(1) Should the department fail to issue a notice of violation upon the request of a tenant or group of tenants within thirty days of the date of such request, or if there is a notice of violation outstanding respecting the premises in which the tenant or group of tenants resides, or, if there is a claim of harassment pursuant to subdivision d of section 27-2005 of this chapter, the tenant or any group of tenants, may individually or jointly apply to the housing part for an order directing the owner and the department to appear before the court. Such order shall be issued at the discretion of the court for good cause shown, and shall be served as the court may direct. If the court finds a condition constituting a violation exists, it shall direct the owner to correct the violation and, upon failure to do so within the time set for certifying the correction of such violation pursuant to subdivision (c) of this section, it shall impose a penalty in accordance with subdivision (a) of this section. Nothing in this section shall preclude any person from seeking relief pursuant to any other applicable provision of law.(2) (i) Notwithstanding the provisions of paragraph one of this subdivision, where one or more allegations of harassment pursuant to subparagraphs b, c and g of paragraph 48 of subdivision a of section 27-2004 of this chapter is made, to the extent that any such allegation is based on physical conditions of a dwelling or dwelling unit, such allegation must be based at least in part on one or more violations of record issued by the department or any other agency. Where any allegation of harassment is based on more than one physical condition, the existence of at least one violation of record with respect to any such physical condition shall be deemed sufficient to meet the requirements of this paragraph.(ii) The provisions of subparagraph i of this paragraph shall apply to any counterclaim or defense presented by a tenant in any proceeding in the housing part of the civil court if such counterclaim or defense is based on one or more allegations of harassment. In the event there is no violation of record with respect to at least one physical condition alleged by such tenant such counterclaim or defense shall be dismissed without prejudice.§4. Section 27-2115 of the administrative code of the city of New York is amended by adding new subdivisions m and n to read as follows:(m) (1) Notwithstanding any other provision of law, a violation of subdivision d of section 27-2005 of this code shall be a class c immediately hazardous violation and a penalty shall be imposed in accordance with this section, provided, however, that such violation shall not be deemed a continuing class c violation of record beyond the time that the conduct constituting such violation occurred.(2) If a court of competent jurisdiction finds that conduct in violation of subdivision d of section 27-2005 of this chapter has occurred, it may determine that a class c violation existed at the time that such conduct occurred. Notwithstanding the foregoing, such court may also issue an order restraining the owner of the property from violating such subdivision and direct the owner to ensure that no further violation occurs, in accordance with section 27-2121 of this chapter. Such court shall impose a civil penalty in an amount not less than one thousand dollars and not more than five thousand dollars for each dwelling unit in which a tenant or any person lawfully entitled to occupancy of such unit has been the subject of such violation, and such other relief as the court deems appropriate. It shall be an affirmative defense to an allegation by a tenant of the kind described in subparagraphs b, c and g of paragraph forty-eight of subdivision a of section 27-2004 of this chapter that (i) such condition or service interruption was not intended to cause any lawful occupant to vacate a dwelling unit or waive or surrender any rights in relation to such occupancy, and (ii) the owner acted in good faith in a reasonable manner to promptly correct such condition or service interruption, including providing notice to all affected lawful occupants of such efforts, where appropriate.(3) An owner may seek an order by the court enjoining a tenant from initiating any further judicial proceedings against such owner pursuant to this section claiming harassment without prior leave of the court if (i) within a ten-year period such tenant has initiated two judicial proceedings pursuant to this section against such owner claiming harassment that have been dismissed on the merits and (ii) a third or subsequent proceeding initiated by such tenant against such owner pursuant to this section claiming harassment during such ten-year period is determined at the time of its adjudication to be frivolous. Except for an order on consent such order may be sought by such owner simultaneously with the adjudication of such third or subsequent judicial proceeding.(4) Where the court determines that a claim of harassment by a tenant against an owner is so lacking in merit as to be frivolous, the court may award attorneys fees to such owner in an amount to be determined by the court.(5) Nothing in paragraphs three or four of this subdivision shall be construed to affect or limit any other claims or rights of the parties.n. The provisions of subdivision d of section 27-2005 of this chapter, subdivision m of this section and subdivision b of section 27-2120 of this chapter shall not apply where a shareholder of record on a proprietary lease for a dwelling unit, the owner of record of a dwelling unit owned as a condominium, or those lawfully entitled to reside with such shareholder or record owner, resides in the dwelling unit for which the proprietary lease authorizes residency or in such condominium unit, as is applicable, or to private dwellings.§5. Section 27-2120 of the administrative code of the city of New York is amended by renumbering the first paragraph as subdivision a, and adding a new subdivision b to read as follows:a. The department may institute an action in a court of competent jurisdiction for an order requiring the owner of property or other responsible person to abate or correct any violation of this code, or to comply with an order or notice of the department, or for such other relief as may be appropriate to secure continuing compliance with this code. An action for injunctive relief hereunder may be brought in addition to other sanctions and remedies for violations of the code, or may be joined with any action for such other sanctions and remedies except criminal prosecution.b. Any tenant, or person or group of persons lawfully entitled to occupancy may individually or jointly apply to the housing part of the civil court for an order restraining the owner of the property from engaging in harassment. Except for an order on consent, such order may be granted upon or subsequent to a determination that a violation of subdivision d of section 27-2005 of this chapter has occurred.§6. If any sentence, paragraph, section or part of this local law shall be adjudged invalid by a court of competent jurisdiction such judgment shall not impair or invalidate the remainder thereof but shall be confined to that part deemed invalid.§7. This local law shall take effect immediately.

PRESERVING ACCESS TO AFFORDABLE HOUSING

2008-02-07T15:18:00.000-05:00

COUNCIL VOTES TO PROTECT LOW-INCOME RENTERS FROM DISCRIMINATION
January 30, 2007 – At today’s Stated Council meeting, the members of the New York City Council will vote on legislation to ensure full opportunity for New Yorkers with limited incomes to obtain affordable housing by prohibiting discrimination against tenants based on lawful source of rent payment. This legislation will help maximize the use of available Section 8 vouchers and help low-income families access safe and permanent housing.

PROHIBITING DISCRIMINATION IN HOUSING BASED ON SOURCE OF INCOME.

The Council will vote to prohibit discrimination against prospective tenants based on lawful source of income, protecting New Yorkers from housing discrimination and helping those with limited incomes find and maintain affordable housing by maximizing the use of Section 8 vouchers or other forms of governmental rent payment in the City. This vote comes after nearly a year of working with the New York City Housing Authority (NYCHA), the Department of Housing Preservation and Development (HPD), landlord and tenant advocacy groups to improve the administration of the Section 8 voucher programs.
“With the rising cost of housing, it’s critical that we take every possible step to preserve and increase access to affordable housing, and this legislation continues the Council’s efforts to do just that,” said Council Speaker Christine C. Quinn. “This legislation, thanks to the hard work of the Council, ACORN and other housing groups, will not only increase access for people eligible for Section 8 vouchers to affordable housing, it will fully protect an individual’s right to housing, regardless of their financial circumstances.”
“As difficult as it is to find affordable housing in New York City, it is significantly harder to find an apartment with a Section 8 voucher,” said General Welfare Committee Chair Bill de Blasio. “This legislation will help maximize available Section 8 vouchers and help low-income families access the housing they are eligible for and desperately need.”
Understanding that small landlords may have difficulty with the administrative burden that can come with the Section 8 program, the legislation exempts landlords who own five or fewer units. However, rent controlled tenants who reside in these small properties would come under the protection of the law. The law applies to all housing accommodations, regardless of the number of units in each, of anyone who owns at least at least one property of six or more units.
A study released by ACORN NY in April of 2007 revealed that of 122 available studios and one bedroom apartments within section 8 limits listed on Craigslist, The Daily News or The New York Times classifieds, only 16 of the owners surveyed would accept Section 8 vouchers. In January of 2007, Mayor Bloomberg announced that 22,000 new Section 8 vouchers would be made available in New York City by the federal government, greatly increasing the number of low-income residents who can afford an apartment. This protective legislation will help maximize the use of available Section 8 vouchers and help low-income families access the housing for which they are eligible.

Embattled Landlord Pinnacle Selling 22 Manhattan Buildings | The New York Observer

2008-02-07T15:14:00.000-05:00

Embattled Landlord Pinnacle Selling 22 Manhattan Buildings The New York Observer

Council Proposes Crackdown on Abusive Landlords

2007-11-02T02:19:00.000-04:00

Columbia Spectator
By Melissa Repko
PUBLISHED OCTOBER 19, 2007
City Council members aim to crack down on tenant harassment with a bill they introduced in front of over 100 supporters on Wednesday.
The proposed legislation, spearheaded by City Council Speaker Christine Quinn, would make tenant harassment a class C violation of the Housing Maintenance Code. Violators would pay from $1000 to $5000 for each offense.
“For too long, tenants have been powerless against landlords who seek to pursue them illegally through threats or interruption of basic services and increasingly through frivolous court proceedings,” said Councilmember Dan Garodnick, D-Manhattan. “This bill gives tenants a fair chance to fight back.”
Locally, allegations against landlords of tenants harassment have been widespread. Tenants in buildings owned by the Pinnacle Group in West Harlem and elsewhere, along with the advocacy group Buyers and Renters United to Save Harlem, have filed a federal lawsuit against Pinnacle, saying that the landlord has mounted a concerted campaign of harassment aimed at getting tenants out of their rent-regulated apartment so they can be “flipped” to market rate.
While Quinn stressed the positive aspects of growth and development, she warned against taking extreme measures to evict tenants. “We need to recognize that with development often comes gentrification pressures,” she said. “There are bad apples out there who are responding to that gentrification by deliberately and willingly engaging in campaigns of tenant harassment.”
“There is no compassion in the tactics that are being implicated,” said Councilmember Melissa Mark-Viverito, D-Manhattan Valley and East Harlem, adding that many tenants being targeted are elderly. “We are here to say that greed will not trump dignity.”
Rachael Klausner, a 96-year-old resident of 200 East 26th St., voiced fears of landlord harassment in her home of 64 years. Ever since there was a fire in the building on April 16, one third of the building’s tenants—most of whom are elderly—have been homeless and there have been no repairs to the site.
“These are the people who are being harassed out of their homes,” said Christine LaFroscia, another resident of the building and the president of its tenant’s association. “Only by changing the system will we be able to put our heads to our pillows at night knowing that people like Rachael and others like her are not going to be evicted from their homes.”
Quinn responded to concerns that landlords would be inundated with frivolous lawsuits, pointing to the bill’s safeguards. The bill spells out the offenses that are considered harassment, which include cutting off services like water and heat, deliberately failing to make repairs, and falsely claiming that tenants have failed to pay rent. Tenants who file three lawsuits that are deemed baseless are not allowed automatic standing to file a fourth.
With Quinn’s backing and widespread support within the council, the proposal looks likely to pass. Mayor Michael Bloomberg has not taken a public position on the bill.

Suit Against Landlord Could Turn Class Action

2007-09-21T00:46:00.000-04:00

September 16, 2007

Thousands of tenants may join a lawsuit against a prominent Manhattan landlord. In July, the tenant group BRUSH filed a federal racketeering lawsuit against the Pinnacle Group and owner Joel Wiener. The suit claims Pinnacle made shoddy repairs to apartments, violated rent stabilization laws, issued illegal evictions, and harassed tenants to try an force them out and raise rents. Now, Public Advocate Betsy Gotbaum says a petition for an upgrade to the lawsuit has been filed. It would add every Pinnacle tenant to the lawsuit, about 21,000 people. In July, a spokesman denied trying to force tenants out of their homes and said the group is committed to preserving affordable housing.
http://www.ny1.com/ny1/content/index.jsp?&aid=73653&search_result=1&stid=8

LAWSUIT FILED AGAINST THE PINNACLE GROUP AND CEO JOEL WIENER

2007-07-12T00:02:00.000-04:00

BUYERS AND RENTERS UNITED TO SAVE HARLEM, INC. (BRUSH)
FILES A RICO LAWSUIT AGAINST REAL ESTATE GIANT, PINNACLE GROUP, AND CEO, JOEL WIENER.

NEW YORK, NY -- Buyers and Renters United to Save Harlem, Inc. (BRUSH), and the law firm of Jenner & Block, LLP, has filed suit in the United States District Court for the Southern District of New York against one of New York’s biggest residential landlords, The Pinnacle Group, and its CEO, Joel Wiener.

The lawsuit, filed with the full support of NY Public Advocate Betsy Gotbaum, and Manhattan Borough President Scott Stringer, accuses Pinnacle and Wiener, who together own over 21,000 apartments in New York City of engaging in wanton and widespread violations of New York rent laws as well as the Federal Racketeer Influenced and Corrupt Organizations Act (“RICO”) statutes.

In the lawsuit, BRUSH contends Pinnacle engaged in:

“… reckless and intentional systematic acts and business practices of demanding and collecting rents in amounts beyond those permitted under the law …” and “… an overall pattern and practice of tenant harassment, which includes: … failing to timely make necessary and reasonable repairs, to address housing maintenance code violations, or to provide essential, required services and then threatening and taking action to evict tenants who have reasonably and legally withheld rent because of such illegal conduct; (iii) commencing unfounded eviction actions to demand rent that already has been paid; (iv) commencing unfounded proceedings to challenge tenants' succession rights and harassing and intimidating tenants by demanding an unduly burdensome, unjustified, and unwarranted amount of evidence regarding a tenant’s succession rights; (v) unjustifiably refusing to accept tenants’ rent checks and then claiming non-payment of rent and commencing eviction actions or other proceedings challenging succession rights; (vi) directing, encouraging and allowing the superintendents of its buildings to, among other things, harass tenants by making unacceptable and shoddy repairs or making false promises to conduct repairs; scheduling appointments that the superintendents do not attend; issuing false notices and documents regarding tenants’ activities or conduct; and ignoring tenants’ complaints and acting in a hostile and retaliatory manner to tenants who have made complaints; (vii) failing to offer tenants lease renewals, or lease renewals on proper terms; (viii) failing to comply with orders issued by the New York Department of Housing and Community Renewal requiring Pinnacle to pay monetary awards to tenants for rent overcharges and rent reductions; (ix) seeking to restore original rents that have been reduced in accordance with Department of Housing and Community Renewal orders, knowing that the housing violations giving rise to the rent reductions have not been resolved; and (x) refusing to respond to and ignoring tenants’ inquiries and requests for documents relating to rental histories, rent increases based on individual apartment improvements and major capital improvements, and lease renewals.”
Kim Powell, President of BRUSH said: “The Pinnacle Group is a parasite in the community, profiting unfairly and illegally from harassment and loopholes in the rent laws without giving anything back to the community. They have acquired thousands of affordable, rent-controlled and rent-stabilized units in New York City, and have systematically victimized tenants by illegally inflating rents while at the same time reducing the quality of repairs and services. What’s Pinnacle’s goal? To push out long-term tenants, drive up rents until apartments are deregulated, and shove through condo conversions that replace affordable rentals with million dollar condos. This landlord has made a mockery of the NYC Housing Court, abused and crippled NYS and NYC housing agencies by its egregious conduct. We hope that this lawsuit sends a clear message to the Pinnacle Group and other landlords that the community will not tolerable abusive and illegal conduct.”
BRUSH is a non-profit association founded to promote tenants’ rights and preserve affordable and quality housing in the West Harlem and Northern Manhattan communities. BRUSH does outreach in the community and hosts seminars and workshops to raise awareness of tenants’ rights. BRUSH has played a key role in organizing tenant associations and works with various state and local agencies and officials in an effort to combat displacement of tenants by the forces of gentrification.

-- END --
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Death Notice

2007-06-28T16:36:00.000-04:00

It is with profound sadness we announce the death of one of our BRUSH Board members, Ms. Debbie (Maudline) Brown. Ms. Brown served on the Board since the organization's inception, and up until her death.

As a Board member and resident of the Harlem community she was very active, vocal, and responsive to the needs of the community. A "tower of strengh" and a woman dedicated to the cause of the community. She will be missed. Our Condolences to her family, and friends.

Tenants Nominate Pinnacle Group as NYC's Most Abusive Landlord Twice

2007-01-29T12:23:00.000-05:00

Pinnacle Unpopular Despite Gift
Tenants Nominate Group Twice as 'New York City's Most Abusive Landlord'
By Kevin Shin
Issue date: 1/25/07 Section: News

The Pinnacle Group, one of the city's largest owners of rent-regulated apartments, has fallen out of favor with residents and seems to be trying to buy its way back into their hearts.On Tuesday, before a city-wide tenants' convention of over 500 tenants, Pinnacle garnered two nominations out of a total of 12 for "New York City's Most Abusive Landlord." Tenants' delegations from Harlem and Washington Heights/Inwood, areas in which Pinnacle owns the majority of its rent-regulated apartments, submitted the nominations.These nominations came on the heels of Pinnacle's announcement that it would give a $500,000 grant toward the founding of the Harlem Senior Tenants and Landlords Reconciliation Center. The center, which will be administered by the Harlem Consumer Education Council, aims to educate Harlem's elderly tenants, property managers, and landlords about their rights and obligations."This worthy initiative will offer tenants, and particularly seniors, a vehicle to address any concerns in an open, timely, and cost-effective manner," said Joel Wiener, CEO of the Pinnacle Group, in a press release earlier this month. "The Pinnacle Group believes in setting the standard for housing in New York City and listening to the communities we serve."The initiative comes at a turbulent period of strife between Pinnacle and many tenants renting its properties."In a two-year period, Pinnacle has not only bought close to $1 billion worth of buildings in substandard conditions, but since 2004, it has started eviction proceedings for a quarter of its tenants," said Anne Ingersoll, president of the Community Union of Washington Heights and Inwood, and spokesperson for Washington Heights/Inwood at the nomination convention.Ingersoll and her delegation chose to nominate Pinnacle for as the city's most abusive out of the over 100 landlords her union oversees."They are much more aggressive than most other landlords," said Ingersoll of Pinnacle. "They send inspectors to private homes asking for personal information, file eviction proceedings on false grounds, and serve unwanted tenants with complex legal documents."
These tactics, said Ingersoll, are meant to intimidate and push out lower-income tenants, many of whom are immigrants who are elderly or have limited command of English.Once tenants either move out or are evicted by the court, landlords are legally allowed to raise rent. Because the law allows landlords to successively raise the rent each time a tenant moves out, residents claim the law has created incentives for landlords to pursue transient tenants, such as students, who may only rent for semesters at a time. Once rent reaches at least $2,000 per month, apartments are no longer classified as rent-stabilized and the landlord can charge market price.Harlem tenants at the convention echoed many of the same allegations against Pinnacle."Every time a person is taken to court, you lose one-twentieth of your working days per month," said Rafael Luna, a community activist who, after deliberating on eight other area landlords, nominated Pinnacle on behalf of Harlem tenants. "A lot of people that they take to court work two, three jobs. They can't afford to go to court. So they say, 'Screw this shit, let me take the $2,000 or whatever shitty amount Pinnacle pays me to leave, and just get out.'"Pinnacle hopes that their contribution to the Harlem Senior Tenants and Landlords Reconciliation Center will help smooth out such potential conflicts in the future."This model is unique and innovative because for the first time in Harlem's recent history, a program's primary focus will be to bring together senior tenants, landlords, and property managers to address issues all three groups face everyday," said HCEC founder Florence M. Rice, in a press release. "It will provide a forum where they can come together and work in a non-threatening environment to develop, not necessarily perfect, but workable solutions that each group can live with."

Stuy Town Tenants Sue over Rents

2007-01-24T09:46:00.000-05:00

Stuy Town tenants sue over rents
The Associated Press

January 23, 2007, 10:06 AM EST

A group of tenants at Stuyvesant Town/Peter Cooper Village want to see their rents rolled back, saying the complex's owners illegally charged market-rate rents while benefitting from tax breaks that should have precluded them from doing so.The suit, filed Monday in Manhattan state Supreme Court, names both the previous owner of the complex, Metropolitan Life Insurance Company, and Tishman Speyer Properties, which bought it for a record $5.4 billion last year. Most of the more than 11,000 units in the property are under rent regulation, while about 3,000 are not. The class-action lawsuit asks that those 3,000 apartments be put back under rent regulation for another 10 years, until a series of city-given tax breaks expire. Those tax breaks are given in exchange for unit owners agreeing to keep rents reasonably low. Those filing the lawsuit say that means the owners shouldn't be charging market-level rent.The suit also asks for $320 million in damages, The New York Times reported in Tuesday's editions.A spokesman for Met Life declined to comment to the paper, while a spokesman for Tishman said the suit was without merit.

List of 12 of NYC's Landlords

2007-01-24T09:37:00.000-05:00

List of NYC's 12 'worst landlords'
By Justin Rocket Silverman
amNewYork Staff Writer

January 24, 2007

The 'Dirty Dozen' list provided by the Association for Neighborhood and Housing Development:
Mt. Eden, the Bronx: Jacob Finkelstein for not fixing leaks at 105 E. Clark Place
Washington Heights: Joel Weiner of The Pinnacle Group LLC, which is said to have begun legal proceedings against 5,000 tenants
Central Brooklyn: John Tsevelos of G-Way Management
West Side Manhattan: Jay Podolsky for harassing tenants at SRO hotels-
Lower East Side: Nathan Shuchat at 141 Ridge Street
Williamsburg: Adam Mermelstein and TreeTop Development LLC
Queens:George Subraj for his many buildings in the Jamacia area.
Bushwick: David Melendez is said to have more than 673 open building code violations-
Harlem: Joel Weiner of The Pinnacle Group LLC
South Bronx: Doug Peterson of NYC Capital Value Fund II LLC for pressuring Section 8 tenants to move out
Chinatown: Benjamin Shaoul for bringing frivolous lawsuits
South Brooklyn: Julia and Carlos Guzman for harassing tenants at 268 Dean Street

Advocates Name the Worst Landlords in NYC

2007-01-24T09:32:00.000-05:00

Advocates name city's 'worst landlords'
By Justin Rocket Silverman
amNewYork Staff Writer

January 24, 2007

Housing advocates Tuesday released a "dirty dozen" list of landlords, who they claim are harassing tenants to force them out of rent-stabilized apartments.In years past, the most notorious landlords were criticized for letting their buildings fall apart. But in this rapidly gentrifying modern city, owners are coming under fire for trying to clear their buildings of tenants to make way for luxury apartments. "We are hard-working families, paying our rent on time, and don't deserve to be harassed," said Jacqueline Hernandez, a resident of 188 South 3rd St. in Williamsburg. "The apartments we live in are full of mold and drafty windows. Meanwhile, we see nice new windows being installed in empty apartments."The owners of 188 South 3rd -- Adam Mermelstein and TreeTop Development LLC -- were voted "New York's Most Abusive Landlord" by the hundreds of people attending Tuesday's gathering of housing advocacy groups.Eleven other landlords from neighborhoods from the Bronx to Manhattan's Lower East Side were cited for what the participants said were strong-arm harassment tactics used in trying to clear tenants out.More than half the tenants of 188 South 3rd have already moved out, and their one-bedroom apartments are being renovated and combined into two- and three-bedroom units, the residents said.Reached by phone, Mermelstein said he was not making any effort to get the rent-stabilized tenants out. He said he had only bought the building four months ago, and that constant repairs were being made to all the apartments.TreeTop Development's website was advertising 188 South 3rd as a "gut-renovation upscale rental."Market-rate rent in the area could reach upwards of $2,000 a month for renovated units. Many of the current tenants are paying less than $700."Harassment of tenants has become one of the dominant business models in New York City," said Benjamin Dulchin, of the Association of Neighborhood and Housing Development, which sponsored Tuesday's event. "Landlords buy buildings where tenants are paying low rent, and then expect to be able to push out those tenants."Dulchin said the solution was a City Council bill that would criminalize the harassment of rent-stabilized tenants.One common harassment tactic, Dulchin said, is to bring a large number of frivolous lawsuits against tenants, who often can't afford a lawyer or speak English well enough to understand the accusations.

Convention to Select New York's Most Abusive Landlord

2007-01-22T09:42:00.000-05:00

Are You Being HARASSED By Your Landlord?
Come to a
Convention to Select
New York’s
Most Abusive
Landlord
Tenants from neighborhoods across New York will nominate landlords who are using illegal methods to push tenants out, then vote to chose New York’s Most Abusive Landlord.
This event will bring attention to the crisis of harassment, and support new legislation in the City Council that will give tenants a new tool to fight back.
DATE: Tuesday, January 23rd, 2007
TIME: 11:00 AM – 1:00 PM
PLACE: Judson Memorial Church
55 Washington Square South
Manhattan
(between Thompson and Sullivan Street, three blocks from West 4t Street stop of A,B,C,D,E,F,V subway)

For More Information, contact: Association for Neighborhood and Housing Development, 212-747-1117, www.anhd.org

AG Settlement with Pinnacle Group for Rent Overcharges

2006-12-21T13:49:00.000-05:00

New York Daily News - http://www.nydailynews.com/ News probe helps put hit on Pinnacle BY JUAN GONZALEZ DAILY NEWS COLUMNIST Monday, December 18th, 2006
State Attorney General Eliot Spitzer, who launched a probe in September into allegations that Pinnacle Group LLC had illegally overcharged many rent-regulated tenants for apartment renovations, has reached a deal with the company, one of the city's biggest owners of rent-stabilized units.
Under the deal, Pinnacle will allow an independent investigator appointed by Spitzer's office to review all rent records for the company's nearly 20,000 rent-regulated units. The company agreed to repay any rent overcharges that the investigator uncovers, according to a source with knowledge of the negotiations.
As part of the agreement, which was still being finalized yesterday, Pinnacle will admit no wrongdoing. In addition, the company has agreed to pay $100,000 to the AG's office for the cost of the investigation, the source said.
The deal comes less than two weeks before Spitzer will leave office and be sworn in as governor.
The AG's probe and separate investigations of Pinnacle by the Manhattan district attorney's office and the state Division of Housing and Community Renewal were all launched after the Daily News revealed in a series of articles this year that Pinnacle had filed more than 5,000 eviction proceedings over the past two years against its tenants - nearly one for every four apartments it owns.
The News investigation also found many cases where Pinnacle had inflated the costs of its repairs for vacant apartments and then doubled or tripled monthly rents far above what rent laws allow.
The company's aggressive tactics spawned widespread opposition and numerous protests during the past year from many of its tenants as well as from political leaders and housing advocates in Harlem, Washington Heights and the Bronx, where the bulk of Pinnacle's housing stock is located.
"We are not in a position to comment on any aspect of the review by the attorney general's office at this time," said a spokesman for Pinnacle last night. "The Pinnacle Group, however, has been cooperative throughout this process."
But some tenant groups who heard of the settlement yesterday called it a slap on the wrist to a huge company.
"This agreement is too nice to Pinnacle," said Luis Manuel Tejada, a spokesman for the Mirabal Sisters Cultural Center in Washington Heights. "You just can't tell them to return rents they've overcharged to tenants without also penalizing them for violating state housing laws."
"It sounds like it's, 'Let's pay it off and let the whole thing go away,'" said Kim Powell, of Buyers and Renters United to Save Harlem. "This agreement does nothing about the massive eviction proceedings or poor management procedures at Pinnacle. It's only a part of the problem being solved."

Read Agreement:

ATTORNEY GENERAL OF THE STATE OF NEW YORK
COMMISSIONER OF THE NEW YORK STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL
In the Matter of
PINNACLE GROUP NY, LLC
ASSURANCE OF DISCONTINUANCE PURSUANT TO EXECUTIVE LAW § 63 (15)
PURSUANT to the provisions of Article 22-A of the New York General Business Law and Section 63(12) of the New York Executive Law, Eliot Spitzer, Attorney General of the State of New York ("the Attorney General"), and Judith Calogeio, Commissioner of the New York State Division of Housing and Community Renewal ("DHCR"), pursuant to Rent Stabilization Law, Unconsol. Laws Section 26-S16, caused an inquiry to be made to determine whether certain persons or entities have been or are engaged in wrongful practices or illegal acts concerning certain rent-stabilized properties and apartments owned or managed directly or indirectly by Pinnacle Group NY, LLC and/or its current or former affiliates and subsidiaries (collectively, "Pinnacle") with respect to the computation of rent increases for vacated apartments based upon the costs of improvements to those properties and apartments during the four-year period between December 15,2002, and December 15, 2006 ("the Inquiry").
WHEREAS, on or about August 29,2006, the Attorney General and DHCR served a subpoena on Pinnacle, seeking certain documents in connection with the Inquiry; and
WHEREAS, Pinnacle has cooperated in the Inquiry by producing responsive documents; and
WHEREAS, Pinnacle is committed to complying with all applicable laws and regulations, and has advised the Attorney General and DHCR of Pinnacle's desire to resolve the Inquiry; and
WHEREAS, Pinnacle has undertaken and will undertake certain actions, set forth below, to ensure that its accounting for and allocation of the expenses it incurs in improving the apartments and properties it owns are accurate, and that any rent increases which are set based on such improvements and/or based on other appropriate factors are correctly and lawfully computed; and
WHEREAS, the Attorney General and DHCR find the actions set forth below to be undertaken by Pinnacle, appropriate and in the public interest; and
WHEREAS, Pinnacle believes that it is, and at all times, has been, in compliance with New York law, and Pinnacle has cooperated fully with the Attorney General and with DHCR throughout this Inquiry; and Pinnacle is entering into this Assurance of Discontinuance ("Assurance11) so that this matter may be resolved amicably, without further cost or inconvenience; and
WHEREAS, Pinnacle is willing to enter into this Assurance without admitting that it has violated any law, or that it otherwise committed any wrongful or improper act, and the Attorney General, pursuant to Section 63(15) of the New York Executive Law, is willing to accept this Assurance in lieu of commencing any statutory proceedings, and DHCR is willing to accept this Assurance in lieu of commencing any further overcharge proceedings on its own initiative, IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES
1. THAT this Assurance shall be binding on, and apply to, Pinnacle Group NY, LLC, its affiliates, subsidiaries and all of their current and former officers, directors, employees, and agents, and any partners of any of them, as well as any successors in interest to any of them

2. THAT for all rent-stabilized apartments owned or managed by Pinnacle, Pinnacle will comply with all applicable laws including but not limited to the Rent Stabilization Law, Local Law 1969, No. 16 of the Administrative Code of the City of New York ("RSL") and regulations thereto, as they may be from time to time modified, including but not limited to:
(a) RSL §§ 26-511 and 26-512 and 9 N.Y.C.R.R. §§ 2522.1 and 2521.1 incalculating the rents charged for rent-stabilized apartments owned or managed by Pinnacleimposed as a result of individual apartment improvements and major capitol improvements andnot imposing rents in excess of the permissible limits;
(b) RSL §26-517(f) and 9N.Y.C.R.R. §2528.3 by registering with DHCR the rent amount for each rent-stabilized apartment owned or managed by Pinnacle each year; and
(c) 9 RY.C.R.R § 2522.5(c) by attaching a rider to the leases of tenants of rent-stabilized apartments owned or managed by Pinnacle who sign a vacancy lease, which rider states, in relevant part, the amount of the prior legal regulated rent, if any, and how any increased rent was calculated, as well as a statement that the increased rent was calculated pursuant to the Guidelines of the Rent Guidelines Board and the Rent Stabilization Code.
3. THAT Pinnacle has retained a forensic accounting and investigative firm acceptable to the Attorney General and to DHCR, Forensic Investigative Associates ("FIA"), which will, within one hundred eighty ( 180) days of the execution of this document by the Attorney General and by DHCR audit all rents set by Pinnacle for the four year period between December 15,2002, and December 15,2006, for each rent-stabilized apartment owned or managed by Pinnacle which was vacated within that four year period; and
(a) Should FIA find any rent that cannot be justified based on statutory increases and/or documented improvements and/or other applicable provisions of law, Pinnacle will credit to the tenant (or refund to the fonner tenant) the amount of the overcharge plus interest calculated in the manner approved by DHCR, no later than thirty (30) days from completion of the audit;
(b) For each apartment for which a rent overcharge is identified, Pinnaclewill, no later than thirty (30) days from completion of the audit, revise Pinnacle's rent records toconform with the correct rent as determined by FLA, provide current tenants of those apartmentswith written notice of the lawful stabilized rent, amend tenants' leases, as appropriate, and file with DHCR an amended and superceding rent registration statement for each apartment wherethe rental contained in the current registration statement exceeds the lawful rent as calculated by FIA;
(c) If there are tenants to whom refunds are owed as a result of this audit whocannot be readily located, Pinnacle will take all reasonable steps, as agreed by the AttorneyGeneral and DHCR, to locate the tenants. At a minimum, these efforts shall include Pinnaclesending each such former tenant at his or her last known address a copy of the notice that arefund is due the tenant and of the procedures for obtaining the refund. Pinnacle shall pay therefund due a former tenant within 30 days of receiving a request from such former tenant or hisauthorized representative or within 30 days of learning of the former tenant's currentwhereabouts, hi the event that any of these tenants cannot be located. Pinnacle will maintain themonies for their refunds in an escrow account for one year. After that time has elapsed, if thetenants' whereabouts remain unknown, these funds will be disbursed in a manner agreeable tothe Attorney General and DHCR; and
(d) Within 90 and 180 days from the date of the execution of this Agreement, Pinnacle shall provide the Attorney General and DHCR with verified compliance reports in the form of an affidavit stating in detail (he steps and procedures taken or instituted by Pinnacle to comply with the terms of this Assurance. The compliance report shall include the following:
i. the amount of rent overcharges refunded to each current and former tenant;
ii. copies of all letters or notices sent to tenants pursuant to this Assurance and a description of all efforts made to locate tenants entitled to refunds;
iii. copies of all revised rent records showing the correct rent amounts as calculated by FIA;
iv. copies of all notices provided current tenants of those apartments of the lawful stabilized rent;
v. copies of leases amended as provided in para. 3(b) above; vi, copies of all superseding rent registration statements filed with DHCR pursuant to paragraph 3(b) above;
vii. such additional supporting documentation as the Attorney General requests to demonstrate that FlA's calculation of revised rents and/or overcharges was justified;
h. the name of the financial entity holding the escrow account and an accounting of the funds contained therein; and
i. a copy of FlA's audit report (included in the second compliance report).
The compliance reports shall be sent to Assistant Attorney General Herbert Israel,Consumer Frauds Bureau, Office of the Attorney General, 3rd Floor, New York. New York 10271 or such other person as may be designated by the Attorney General; and Office of General Counsel, Division of Housing and Community Renewal, 25 Beaver Street, 7th Floor, New York, New York 10004 or such person as may be designated by the Commissioner.
4. THAT FLA will also review and approve Pinnacle's current procedures forcomputing rents on newly vacated apartments:
(a) If any of Pinnacle's procedures are found not to be in compliance withapplicable law and DHCR regulations, Pinnacle will promptly implement the recommendationsof FIA for revised procedures; and
(b) For a period of one year from the date of the signing of this Assurance,FIA will monitor Pinnacle's ongoing compliance with the approved procedures for tracking thecosts of renovating individual apartments and for setting rents on newly vacated apartments
5. THAT this Assurance concludes the Inquiry brought by the Attorney General andby DHCR and any action that the Attorney General or DHCR could commence against Pinnacleoi any of its current affiliates or subsidiaries, or any of their current or former officers, directors,shareholders, employees, and agents, and any partners of any of them, arising from or relating tothe subject matter of this Assurance; provided however, that nothing contained in this Assuranceshould be construed to preclude claims by the Attorney General or by DHCR to enforcePinnacle's obligations arising from or relating to the provisions contained in this Assurance.
6- THAT no amendments, modifications or variations of the terms of this Agreement shall be valid unless made in a writing executed by both Parties.
7. THAT this Agreement shall apply to and inure to the benefit of the Parties and their respective successors and assigns, parents, subsidiaries, affiliates, predecessors, present and former directors, officers, shareholders, members, partners, employees, representatives and agents
8. THAT this Agreement contains the entire agreement and understandingconcerning the subject matter hereof between the Panics, and supersedes and replaces all priornegotiations, representations, promises, proposed agreements and agreements, written or oral
9. THAT nothing contained herein shall be construed so as to deprive anyindividual of any remedy under the law including the right of any tenant or former tenant to filean overcharge complaint with DHCR with respect to the subject matter of the Inquiry arid forDHCR to adjudicate it in accordance with the RSL and Rent Stabilization Code. This Assuranceshall not confer on any person any tights as to a third party beneficiary or otherwise againstPinnacle.

10. THAT the parties represent and warrant that their signatories to this Assurancehave authority to act for and bind the respective parties.
11. THAT the acceptance of this Assurance by the Attorney General and by DHCRshall not be deemed or construed as an approval by either of any of Pinnacle's past practices.
12. IT IS FURTHER UNDERSTOOD AND AGREED THAT Pinnacle shall payto the Attorney General the sum of $ 100,000.00 as costs of this investigation pursuant toExecutive Law § 63(15).

WHEREFORE, the following signatures are affixed hereto this 18) day of December, 2006
ELIOT SP1TZER
Attorney General of the State of New York
120 Broadway
New Yodrl^ 027,1-0332
Francine James
Assistant First Deputy Attorney General
-
JUDITH CALOGERO
Commissioner of the New York State Division of
Housing and Community Renewal 25 Beaver Street,,?"1 Floor New Yoi k, Ne^York 10004 ,
s .'• ,' , V Si <~- V •'"> / !'By: / ^ Z_________

Viewers are advised if they would like a copy go to www.oag.state.ny.us

100 Families Won't Be Having Turkey At Home

2006-11-24T13:56:00.000-05:00

More than a hundred families in a Washington Heights building may not be able to cook Thanksgiving dinner in their homes, because of a broken gas main they say the landlord isn't fixing fast enough. NY1's Solana Pyne filed the following report. “One of the things that you look forward to is just smelling all the foods, you know, during the holidays. You're not going to get that here this year,” said building resident Ramon Breton. That's because residents of these buildings can't cook this Thanksgiving. They've been without gas since Con Edison showed up about a month ago. “A tenant complained that there seemed to be a leak of gas. They checked in the basement and they found there was a leak in one of the pipes. They shut down the gas for the whole building,” said building manager Juan Lopez. The Pinnacle group, which owns and manages the building, called in a plumber to check out the buildings' gas pipes. They all failed integrity tests and are being replaced. Meanwhile, heat and hot water are running off a backup boiler, but tenants can't use their stove or oven. “We have to be buying food out there in the street every day,” said Elizabeth Valdez. “And nobody's going to reimburse all that money that we're spending there.” “This is one of those emergencies that they should pay overtime and either have more crews, or have weekend workers. I don't see that,” adds Ramon. Several residents said the same thing: that crews have not been working Saturdays or Sundays, but the building manager says they're wrong. “I have them working seven days a week. They're here at seven in the morning. They're still here. Usually they wait for tenants to come back from work and they'll keep working,” said Lopez. Lopez says six more workers will start this week. But in Ramon Breton's apartment, the work that has been done has created its own problems. “We've had more mice than ever. We're averaging about three a day,” said Ramon. To try to make up for all the inconvenience, Pinnacle has ordered Thanksgiving dinners for residents. “We catered with Amy Ruth to provide 130 meals for the tenants. So we're doing four meals per apartment and we're going to serve them in the lobby on Wednesday,” said Richard Harley, Community Affairs for Pinnacle. But everyone who spoke with NY1 said they'll be eating elsewhere on Thursday. The building manager says gas will be restored piecemeal as the pipes in particular parts of the building are replaced. If it stays on schedule, he says the work will be done by Christmas. Residents say they're resigned to hoping management's right and that they'll at least be able to cook Christmas dinner at home. – Solana Pyne

http://www.ny1.com/ny1/content/index.jsp?&aid=64515&search_result=1&stid=8

Pinnacle Group: One big city landlord and many little headaches

2006-10-17T00:19:00.000-04:00

Landlord's battle illustrates trend of buying deteriorating buildings for big profits
By Jen Benepe

706 Riverside Drive In today's tight rental market, any New York City landlord should be sitting pretty.Unless of course, he happens to be Joel Weiner, owner of the Pinnacle Group.Weiner and his company have come under increasing criticism as they have bought up an estimated $1 billion in distressed buildings in Upper Manhattan and parts of the Bronx over a two-year period.The complaints have come from tenants' groups, legal aid lawyers and elected officials who say the company has been overly aggressive in raising rents through false major capital improvements (MCIs) and by trying to remove rent-stabilized tenants.The allegations have spurred recent investigations by both the state attorney general and the Manhattan district attorney.If anything, the public tempest about Weiner and the Pinnacle Group (which is backed by the real estate investment fund Praedium) reflects changing times.Deteriorated housing stock, once the bane of a landlord's portfolio, is now a primary source of double-digit growth.Reversing the status quoThe company's business model is a factor: Praedium seeks to invest its money in large numbers of deteriorated properties, make repairs and create a healthy rent roll that will yield a profit within one to two years.But most tenants in the new Pinnacle acquisitions, observers say, are more familiar with the old "slumlord" model, where the landlord lets the building go and the tenants stop paying the rent because they're living in a slum; a downward spiral where no one wins.Most of the 104 properties that Pinnacle purchased from landlord Baruch Singer in 2005 for over $500 million were in severe disrepair, and a number of tenants had stopped paying rent years earlier, said Ken Fisher, a former Brooklyn member of the City Council and Pinnacle's legal representative.It's a situation that can lead to clashes with the tenants as they scramble to pay unpaid rent, or balk at new charges that come with building improvements, Fisher noted.These factors have figured significantly in the negative backlash in part because Pinnacle is the only landlord to undertake such a massive buy-out in the areas, or even in the city, some observers said.Condo conversionsComplicating the picture, some of the properties might be converted to condos: Pinnacle has asked the attorney general's office to approve seven non-eviction plans, most of them on Riverside Drive. One has already been approved.Although Weiner has owned property in New York for 30 years, public opposition to him crystallized when residents of Pinnacle's prime Riverside Drive properties learned of his intent to take their buildings condo. This created fear that they might lose their rent-stabilized apartments, said Kim Powell, a resident in a Pinnacle building who started BRUSH, or Buyers and Renters United to Save Harlem.Another group attacking Pinnacle, the Mirabel Sisters, is run by Luis Tejada, a superintendent at 619 West 140th Street who was fired when Weiner took over, Fisher said."They want to throw out people with rent-controlled apartments, but people here can't pay more rent," said Tejada.Pinnacle has also come repeatedly under the sting of the New York Daily News' reporter Juan Gonzalez, who discovered that Pinnacle has sent out 5,000 dispossess notices for the 21,000 units the company owns, a figure the company has not denied, according to press reports.Gonzalez also provided powerful accounts of tenants -- including a 78-year-old woman and her nine cats -- being forced out of their apartments.A recent account of Pinnacle's actions by the New York Times detailed alleged cases of fraud -- including false billings and cost of renovations that were exaggerated -- that are being examined by the district attorney and the state attorney general's office.In one instance, Pinnacle allegedly recorded using 160 light bulbs, 75 pounds of grout, and 130 gallons of paint for the renovation of a single two-bedroom apartment in Harlem in order to justify raising that unit's rent to $1,900.Pinnacle lawyers acknowledge they made mistakes in the case, according to the Times, and the couple occupying the apartment was awarded $10,000 in rent credits, though they claim they are owed $15,000 more.Pinnacle's lawyers also continue to legally challenge some of their claims, the Times reported.Uphill public relations battleThe company has been engaged in an uphill public relations battle ever since.While not disputing the figure of 5,000 dispossess notices, Fisher pointed out that the number is misleading, because multiple notices can be sent to the same apartment, or an apartment could have changed hands during the two and half years the notices were sent out.The number of apartments targeted for eviction is closer to 2,500, or 12 percent of Pinnacle's total portfolio, he said. That is less than the city average of 15 percent, or 320,000 dispossess actions out of 2.1 million units citywide, he claimed."In the first year that Pinnacle owns a building, there is usually a higher number of dispossess cases because there are a large number of tenants who haven't been paying rent," Fisher explained.He said when Pinnacle bought the Dunbar Building, a landmark structure that takes up an entire block in Harlem, the arrears were $4 million on a $1.3 million annual rent roll.He also said that BRUSH and several of the tenants at 706 Riverside Drive were using their stance against Pinnacle as a way to negotiate a lower asking price for their apartments, many of them two- and three-bedroom apartments with sweeping river views and original prewar detailing -- worth an average of $1 million, out of reach for most people living in the building.Currently, most of the rent-stabilized, two- to three-bedroom apartments in the building average just $1,100 a month in rent, confirmed Powell.Fisher said BRUSH and Powell were disingenuous because, although claiming to represent all tenants in Harlem, they had only expressed dissatisfaction with Pinnacle.As to former super and current Pinnacle opponent Tejada, he was fired for incompetence, said Fisher, who showed a reporter pictures of the building he was supposed to care for, 619 West 140th Street, surrounded by garbage.Finally, Fisher noted that the rent payments made by the woman with nine cats had not been properly accounted for by the previous landlord, and that her case had since been resolved.It's also about the system"Many of the cases that Pinnacle brings are not legitimate," said Ken Rosenfeld, director of legal services of the Northern Manhattan Improvement Corp., a nonprofit organization that provides legal services to tenants in the area. "They just sue."But while tenants' rights advocates, elected officials and lawyers interviewed for this article stated repeatedly that they loathed Pinnacle's tactics, sources noted that the state Legislature created the platform for a company to bring action against tenants who know little about how to navigate landlord-tenant court.A lack of public funding for court representation means that many low-income tenants will lose their homes, said Susan Russell, chief of staff for City Council member Robert Jackson, a Democrat whose district includes many of the up-and-coming Riverside Drive addresses."This is a capitalist society -- what are we supposed to say, that residential property should not be profitable?" she asked. Because 92 percent of landlords have lawyers in housing court, while only 8 to 10 percent of tenants are represented, Jackson's office contributed $50,000 toward tenant court representation, "to level the playing field."Observers also agreed that the law governing the state Department of Housing and Community Renewal should enable the agency to do an accounting of charges related to rent increases, and not expect the tenant to do an after-the-fact investigation on a rent number that he or she may not even suspect is inaccurate.Rosenfeld said the blame also lay in the "extreme" lack of affordable housing in the city, and the inability by government to deliver alternatives.Pinnacle responded that, when it buys a property, it must take legal action if a tenant owes rent. Many of the rental records that Pinnacle inherits are a mess, said Fisher, and have created unnecessary dispossess notices."The real problem comes with relatives of people who have lived in these apartments for years," said Russell, who said many find themselves out of a home if they don't have a solid contract with the previous landlord."There are a lot of concerns about gentrification, but it is not being created by Pinnacle," added Fisher.Powell said that Pinnacle sued practically everyone when they bought a building, but that the majority of the tenants didn't qualify for legal aid. "All of them won, but they didn't get their money back," money that could have been spent toward buying their own apartments, she said.Making good on a bad startStill, Pinnacle says it's not only different from many landlords, but that it also provides fair, affordable housing while government has long ago stopped trying to house middle- and lower-class New Yorkers.Fisher said that Pinnacle's intent is to upgrade a property once it has been purchased."In 2005, Pinnacle purchased 6,006 units and we spent $11.5 million on building renovations and $9.7 million on renovation of apartments," he said. Since then, 416 units have turned over to other tenants, but only $4.4 million was allocated to rent-increase calculations, he added.When Pinnacle purchased the Dunbar, there was "broken furniture, a loan shark ring, a brothel, and drug gangs operating out of some of the apartments," said Fisher. "But if you go today the graffiti is gone, the place is spotless."Reporter Wayne Barrett decided against putting Pinnacle on his "10 Worst Landlords" list in the Village Voice because their record was unclear, he wrote.Rosenfeld, who has represented some tenants in court against other big owners in the area like Prana (see below), agreed that Pinnacle had received more attention than other landlords who engaged in the same, or even worse, practices in the area."But when you enter into New York City real estate in such a big fashion and make so many purchases, you unite tenants against you because you are so big," Rosenfeld said.In Pinnacle's favor, Weiner had attended public meetings and made himself accessible, noted Russell.Fisher acknowledged that the company had made some mistakes and had since hired two community outreach staffers, met with more than a dozen elected officials and community leaders, and joined organizations that reach out to tenants.Necessary improvements?Part of the brouhaha is that one person's justifiable building improvement is another person's gingerbread. When MCIs are made, the major capital improvements can be used as a way to increase rent-stabilized rents."Our allegations have been overcharging in rent and capital improvements," said Powell, whose tenants' group raised $6,500 for an independent engineer's assessment of 706 Riverside Drive, which they determined will require an additional $2.8 million dollars worth of work."Flags, gold paint and security cameras," she noted, "are not for the benefit of the tenants."But one man's unneeded gold paint is another's sorely needed paint. Fisher tells the story that someone was complaining that the elevator in 706 Riverside Drive needed to be replaced, and Joel turned to Kim Powell and said, "You told me not to do that because you didn't want an MCI.""That is an example of the level of complexity and acrimony that you might not see in other cities," Fisher said.Funds find profitability, controversy as landlordsThe prospects for growth in changing areas like Washington Heights and the Bronx have attracted large investment funds looking for big profits.Although tenants are quick to attack the Pinnacle Group as making cosmetic improvements to attract higher rents and then passing the charges along to existing tenants, other landlords in the area with a similar financial model have operated quietly out of the limelight.New York City property records show that Prana Growth Fund owns more than 42 properties in the area, most of them in the heavily Dominican areas of Washington Heights, where tenants are less likely to wage public battles because they don't speak English. Prana quickly sold 600 West 161st Street when news of their lawsuits with tenants started becoming public, according to sources.Extell Development recently bought up five buildings from Broadway to Riverside Drive on 137th Street, but tenants say they received notices of the new ownership in their rent slips, and the office number they were given always goes to an answering machine. A spokesman for Extell, George Arzt, said that the company had no intention, so far, of turning those buildings into condos, and would make itself more accessible to tenants in the future.Operated by Kurt McCracken, Richard Esposito and Peter Larsen, Prana, which is based in San Francisco, is described by investment adviser Kochis Fitz in their newsletter as a company that "looks for opportunistic investments in inefficient markets that are generally characterized by unsophisticated, capital-constrained buyers and sellers, significant government regulation (primarily rent control), and a large variance in rents for similar units."The newsletter notes that Prana seeks such investments in urban areas and "once purchased, the objective is to achieve positive cash flow within 12 months." Their long-term goal says Kochis Fitz is "significantly increasing rent rolls," while managing tenant turnover, focusing on tenant relations, and making "cosmetic improvements."Yet tenant groups, local representatives and even legal aid lawyers for the most part were unaware that the company is operating in Upper Manhattan or that many of its tenants have experienced such aggressive tactics when Prana bought out their buildings.Attorneys Robert Sokolski and Daphna Zekaria successfully represented tenants in actions against Prana in 2004 and 2005. Ana Ingersoll, president of a tenants' group at 600 West 161st Street, said the building had 1,023 code violations."Many [of the apartments] are in obvious disrepair: Faucets leak, paint is peeling, bathrooms are moldy, and some stoves have been without gas for months," reported the Gotham Gazette in 2005; the newspaper noted that Prana had not returned its phone calls. In San Francisco, Prana has gained a reputation for "systematic evictions" of tenants of buildings it acquired, according to tenants and lawyers who represented them.Praedium Group, the big backer behind Pinnacle's two-year buying spree, has an investment strategy that reads like a carbon copy of Prana's:"Our strategy," the company wrote on its Web site, is "centered on pursuing middle-market assets with a total cost of less than $75 million each, and focusing on "value enhancement" opportunities, which includes "deterioration of the asset's physical condition; inadequate repairs and maintenance, an ownership that has failed to aggressively manage the current tenant/leasing base," and several other criteria that define distressed properties.Both Prana's and Praedium/Pinnacle's business models seek to upgrade the properties well beyond the level at which they had been operating. But while Pinnacle owner Joel Weiner has appeared publicly to address tenant issues and responded positively to pressure from the media, Prana has made itself completely inaccessible to the public; every single one of their publicly listed numbers is a fax machine. Repeated calls to their offices in San Francisco went unanswered.

NEXT MEETING TBA

2006-09-12T22:00:00.000-04:00

COME LEARN WHAT YOUR RIGHTS ARE AS A TENANT. ASK QUESTIONS ABOUT HOUSING LAWS. IF YOU LIVE IN A BUILDING UNDERGOING A POTENTIAL NON-EVICTION CONDOMINIUM CONVERSION GET THE FACTS.

GET EDUCATED AND STAY INFORMED!

WHEN: NEXT MEETING EARLY DECEMBER TO BE ANNOUNCED

WHERE: ?

PINNACLE TENANTS: HAVE YOUR BUILDING REPRESENTATIVE OR TENANT LEADER CONTACT US TO GET MORE INFORMATION

Contact Information:

BRUSH
Hamilton Grange Station
Box 98
New York, NY 10031
646-248-6915 or harlembrush@yahoo.com

HAD ENOUGH! - JOIN BRUSH!

Broken or no locks; Broken mailboxes; Defective windows; Walls/ceilings cracked/buckling/holes; Lead paint; Leaks, Peeling paint in hallways or dirty hallways;
Elevator not working; Stairs broken or loose; Mold; Garbage problems
Fire escapes rusty / broken / defective / missing; Unsecured basement or roof; Exposed wiring; Rent overcharges;No rent receipts given; Rent receipts incomplete (no date);
Inadequate or no super service, missing Co2 Detector

HAD ENOUGH! - JOIN BRUSH!

Questionable major capital rental improvement increases, eviction notice, succession right issues, or any legal action.

HAD ENOUGH! - JOIN BRUSH!

If your Landlord is harassing you in any form or fashion...

HAD ENOUGH! - JOIN BRUSH!

PRESS RELEASE

2006-09-12T21:55:00.000-04:00

June 10, 2006
VOL. I No. 2

BRUSH has been at the forefront of many media discussions regarding the management practices of The Pinnacle Group. During the month of May, the New York Daily News ran countless articles about the plight of many tenants living in Pinnacle-owned buildings. As a result, various community boards convened a special meeting to discuss the management practices of the company and New York State Attorney General Eliot Spitzer was called upon to take action.

In the Wednesday, June 7th edition of the New York Daily News, Juan Gonzalez again assails the nefarious practices of Pinnacle, the New York State Division of Housing and Community Renewal has launched an investigation trying to discern a pattern of conduct, Cardinal Egan of the New York Archdiocese of the Catholic Church is speaking at the rally on Saturday June 10th in Washington Heights, and the Housing Committee Chair of the New York State Assembly, the Honorable Vito Lopez of the 53rd Assembly District in Brooklyn is launching an investigation. Also, the Village Voice ran an article about BRUSH’s attempt to preserve affordable and quality housing by examining the management practices of companies like Pinnacle. The President of BRUSH, Kim Powell was featured on cable TV with Amy Goodman of Democracy Now! (a cable news program), and the New York Daily News Columnist, Juan Gonzalez, to talk about the “overpriced” proposed condominium conversion plans filed by The Pinnacle Group with the New York Attorney General’s Office.

BRUSH is currently working with tenant associations, legal service agencies, and various non-profit organizations in an effort to challenge the practices of companies like The Pinnacle Group. Thus far, through their general meetings held each month, BRUSH has put pressure on The Pinnacle Group, and successfully forced them to dismiss a few of the eviction proceedings the company brought against tenants.

As a result of the pressure of the community the Pinnacle Group has called upon BRUSH to assist them in developing their community ties. BRUSH has met with the company and reports that their efforts to improve and enhance the company’s relationship with the community is an evolving process.

Elected officials as well as community–based organization, such as, Mirabal Sisters have now joined in BRUSH’s efforts to challenge the company’s practices. BRUSH is currently working with various organizations and other New York City boroughs to organize and develop strong tenant associations.

Donations and suggestions may be sent to:

BRUSH
Hamilton Grange Station
Box 98
New York, New York 10031

NEXT MEETING: TBA

For more information:
Contact 646-248-6915 or kimlpowell@aol.com or harlembrush@yahoo.com

AS LANDLORD GROWS, SO DOES CRITICISM

2006-09-12T21:53:00.000-04:00

Marilynn K. Yee/The New York Times
Tenants at a building at 706 Riverside Drive who have formed a group to oppose Pinnacle. Pinnacle Group has become one of the biggest property owners in neighborhoods from Brooklyn to the Bronx.

By TIMOTHY WILLIAMS
Published: September 3, 2006
Not long ago, Joel Weiner was a small player in New York City’s residential real estate industry. The properties he owned were neither extensive, nor impressive.

But during the past two years, Mr. Weiner, 57, and his firm, the Pinnacle Group, have spent more than $1 billion on hundreds of apartment buildings and quietly become one of the biggest property owners in neighborhoods from Brooklyn to the Bronx.

But Pinnacle has had problems as it expanded: It is the subject of criminal investigations by the Manhattan district attorney and the state attorney general’s office; it has been denounced by Representative Charles B. Rangel and other politicians; and it has been the subject of angry community meetings and rallies and petitions signed by thousands of people who object to its business practices.

Last week, the attorney general’s office subpoenaed Pinnacle documents, including rent registration forms, as part of its investigation, Pinnacle officials said.
The antipathy generated by Mr. Weiner and Pinnacle is the city’s latest entry in the time-honored landlord-versus-tenant struggle, between those who want to keep their rents down and those who want to raise them. But this one is being played out with perhaps greater passion because of a tight housing market and the breakneck speed of gentrification in recent years, which has seemed to transform many formerly undesirable neighborhoods overnight.

Critics accuse Pinnacle of buying buildings and firing superintendents within weeks. Questions have also been raised about whether the company has violated the city’s rent-stabilization laws by sometimes raising rents higher than is legally allowed, through such measures as passing along the cost of questionable renovation expenses. In one case, the cost of installing five toilets was passed on to a tenant in a two-bathroom apartment.

The critics also say the company has been engaging in harassment to force people out of their apartments. Tenants describe being put through a Kafkaesque tangle of eviction notices slipped under doors at night, and of legal challenges made to their right to live in longtime apartments.
In some buildings, one-quarter to one-half of the tenants have received so-called dispossess notices — typically the start of the eviction process — within a few months of Pinnacle’s purchase of the property. The company’s practices, its critics say, are a case study in the gentrification of some of the last working-class neighborhoods in Manhattan.

“We’ve been living here since it was the drug capital of the world, now we are sitting on a commodity,’’ said Rafael Gomez, 48, who lives in a Pinnacle building in Washington Heights, adding that people ask how “do we end up in such a beautiful neighborhood when we are poor people?”

Mr. Weiner denied criminal wrongdoing and said his goal was to be recognized as a model landlord. He has acknowledged raising some rents, but said the increases were necessary so he could provide safe, quality housing. His lawyers maintain that any errors Pinnacle may have made in seeking to evict tenants or in overcharging on rent have been the result of honest mistakes. The company rightly says costs of improving apartments can be legally passed on to tenants.

Mr. Weiner has not disputed that his company has sent out 5,000 dispossess notices to tenants in its approximately 21,000 apartments in the past 29 months. That, say adversaries, is itself cause for alarm.

“When you are trying to evict one out of four tenants, that is what lawyers call prima facie evidence,” Congressman Rangel said. “It is something that screams out for a criminal or civil or legal remedy.”

Mr. Weiner agreed to be interviewed, but did not want his photograph taken because, his lawyers said, he wanted to protect his privacy and because he had received a death threat on the Internet.

Mr. Weiner, who was born in Brooklyn and lives on Long Island, said his objective was to simply get tenants to pay their rents. And he makes no apologies for Pinnacle’s aggressiveness in moving to evict those late on rent or otherwise not legally entitled to live in his buildings.

“When you are in the trenches and you try to turn around a building, it’s not easy,” he said. He has hired a team of prominent lawyers, including former City Councilman Kenneth K. Fisher and Benjamin Brafman, a defense attorney whose clients have included Michael Jackson.

Mr. Weiner describes himself as a hands-on owner who visits his properties frequently and is a stickler for cleanliness, order and the removal of building code violations.

Although much of the criticism about him has focused on gentrification, Mr. Weiner said his recent purchases of buildings in neighborhoods like Washington Heights, Harlem, Inwood and the South Bronx would not necessarily lead to wealthier tenants moving in and displacing
current residents.

“I don’t want to call it gentrification,” he said. “I want to call it meeting community needs.”
He said he typically raises rents after he buys a building in order to pay for the major improvements he must make because previous landlords have neglected many of the properties. Pinnacle legally passes those costs on to tenants in higher rent bills. “This is a very tough business,” he said. “I have a passion for doing it, and doing it right.”

In December 1997, Pinnacle owned 267 apartments in the city, and Mr. Weiner, though wealthy, was unknown, even to many of his competitors. But by May of this year, after an infusion of cash from the Praedium Group, a real estate fund that specializes in investing in inner cities, Pinnacle’s holdings had jumped to 21,642 apartments.

From May 2004 to May of this year alone, the number of Pinnacle-owned apartments had tripled, with most of the recent purchases concentrated in Upper Manhattan and the Bronx. Among its acquisitions — for $500 million — was the 2,900 apartment portfolio of Baruch Singer, who had become one of Harlem’s most notorious landlords because of the number of code violations and fines his buildings incurred.

Kim Powell, who in November 2005 helped start an anti-Pinnacle group called Brush — Buyers and Renters United to Save Harlem — said the group’s primary problem with Pinnacle was how it treats renters. “They have shown an absolute disregard for tenants,” Ms. Powell said.

The Pinnacle model has been to purchase what it refers to as distressed properties — typically apartment buildings that have numerous code violations, are in poor repair, and house many tenants who are behind on rent. The tenants in the 104 Singer buildings, for example, were in arrears for a total of $4.3 million, according to Pinnacle.

The company cleans up the building, often starting at the basement. It scrubs graffiti, installs exterior lighting, cameras and new front doors, and works on code violations. The rent-stabilization laws allow some or all of the cost of that work to be passed on to tenants in the form
of higher rents.

Vacant units often get complete makeovers, including new kitchens. Landlords can also increase rents on vacant apartments by as much as 20 percent under state rent regulations. As a result, rents paid by incoming tenants are often significantly higher than what previous renters of the same apartment had paid.

Tenant advocates say Pinnacle is intent on raising rents to the $2,000-a-month threshold, which would remove the units that are vacant from rent-stabilization protection.
The law would then allow a landlord to rent those apartments for whatever the market will bear.

“That’s their business plan,” said Ken Rosenfeld, director of legal services for the nonprofit Northern Manhattan Improvement Corporation. “They’re testing the waters, they’re pushing the envelope.”

Mr. Weiner however, said that few of his apartments had reached the $2,000 level, and that he usually charges tenants less than the legally allowed rent because the current market cannot support higher rents. The city allows an occupied rent-stabilized apartment to be deregulated after its rent hits $2,000, but only if the tenants’ household income is at least $175,000 for two years in a row.

The Manhattan district attorney’s office and the state attorney general’s office have sought Pinnacle work invoices, eviction records, responses to tenant complaints and other documents to try to determine whether there is a pattern of fraud, whether the costs of renovations were exaggerated and false billings were submitted, officials said, speaking on the condition of anonymity because the investigation is ongoing. Some of the accusations against Pinnacle, as well as some details of the investigations, have been reported by The Daily News.

Mr. Weiner said he was cooperating with the inquiries and has pledged to change Pinnacle’s business methods if either office requests it. The company has also hired two community outreach workers with the goal of forming a community advisory panel that would help guide Pinnacle operations.

Further, the company said it was willing to turn over the files of the 1,256 cases it is currently litigating against tenants to elected officials so they can be examined. Finally, it has agreed not to seek to evict elderly tenants without first contacting the city Department of Aging.

“I am looking every day to improve the operation,” Mr. Weiner said.

Many tenants however, say they have had unsettling encounters with Pinnacle and its lawyers.
Karen Flannagan, 53, said that even after she had presented Pinnacle documents that established her residency rights to her Harlem apartment after her mother died, the company slipped an eviction notice under her door and took her to court. Her mother had been the leaseholder and the family had lived in the apartment along with Ms. Flannagan’s teenage daughter for several years.

“Here I am trying to grieve, and I am having to worry about me and my daughter being thrown out,” she said.

After two years and 10 appearances in housing court, Pinnacle abruptly dropped the case a few years ago, she said. Pinnacle lawyers, however, said recently that Ms. Flannagan’s original documents had not been sufficient, though in a statement this week the company said it regretted any inconvenience it had caused her.

Marjorie Charron, 56, and her husband, Ted Charron, 59, moved into a Pinnacle building in Harlem in 2001, paying $1,900 a month for a two-bedroom apartment. They were told by Pinnacle that by law, the company could have charged as much as $2,500.

When the couple realized that other tenants were paying far less, they found out that Pinnacle had claimed to have performed $20,000 worth of remodeling work on the apartment before they moved in, which gave the landlord the right to raise the rent by a corresponding amount.
When they examined Pinnacle’s invoices for the work done on the apartment, however, they found that the company had included charges for 160 light bulbs, 75 pounds of grout, 130 gallons of paint, a $198 nail gun and a $424 drain cleaning device. They also found that some items listed as installed were not there, including oak flooring and a pedestal sink.

Other costs included maintenance work such as painting walls and sanding floors, the costs of which are not permitted to be passed on to a tenant by a landlord.

Five years later, the couple was awarded $10,000 in rent credits from Pinnacle, although they say the company owes them at least $15,000 more. Pinnacle lawyers acknowledged having made mistakes in the Charron case, but continue to legally challenge some of the couples’ claims.
“The average person can’t do this, so by default, Pinnacle wins almost every time,” Ms. Charron said. In a statement this week, Pinnacle said the items had been “inadvertently misallocated” and apologized.

In another case, Erica Martinez, who lives in a Pinnacle building in Washington Heights, received a $1,317.83 rent credit from Pinnacle after the State Department of Housing and Community Renewal ruled that she had been overcharged. In addition, the agency ordered Pinnacle to pay her triple the amount of the overcharge — or a total of nearly $4,000 — because the overcharge had been deemed “willful.”

Pinnacle lawyers said the company had made mistakes in the Martinez case, but had not done so purposely.

In another case, Pinnacle has attempted to pass on charges to tenants for the $21,700 cost of new front doors in one of its buildings in Harlem, even though they were replaced several years earlier. The state eventually quashed the attempt and the tenants’ rents were not increased.
“Pinnacle, if by the second or third overcharge they had said, ‘Something’s wrong, lets make it right,’ I would have given them credit, but they never have,” said Hazel Miura, a tenant organizer in the Bronx.

Another Pinnacle tenant, Mark Gordon, was charged through his rent for the cost of five toilets for his apartment in 2001, even though he had only two bathrooms. Pinnacle’s invoices also included the cost of replacing electrical wiring that appeared not to have been replaced and a double billing for the installation of kitchen cabinets.

Mr. Gordon said three years and $10,000 in legal fees later, Pinnacle resolved the case by agreeing to lower his rent. While at the time, Pinnacle did not admit making any errors, the company recently acknowledged making a mistake.

But Pinnacle’s lawyers said that in only about 50 cases had the company been found to have overcharged tenants and that only about 6 percent of its units were currently under litigation. Pinnacle says that most of the tenants it has moved to evict have failed to pay rent for at least two months.

Mr. Weiner said he instructed his employees to work out cases with tenants amicably, and that he only used the courts as a final resort. His lawyers say that despite handing out thousands of dispossess notices, no more than 351 people have actually been evicted since 2004.

ELIOT GOES IN PURSUIT OF PINNACLE

2006-09-12T21:50:00.000-04:00

NEW YORK DAILY NEWS
Sep 1, 2006
By JUAN GONZALEZ

ATTORNEY GENERAL Eliot Spitzer has subpoenaed thousands of tenant records of the Pinnacle Group LLC, one of the city's biggest owners of rent-regulated housing.
The subpoena, issued Tuesday, is part of a widening probe by Spitzer into allegations that Pinnacle has systematically charged tenants who moved into renovated apartments far higher rents than state housing law allows.
"We received a records request in the form of a subpoena," company attorney Kenneth Fisher said in a written statement. "We had previously volunteered to cooperate with [Spitzer's] inquiry and are confident that Pinnacle's record of investing in and improving properties will result in a favorable outcome after the attorney general's office concludes its review."
Company chief Joel Wiener has defended Pinnacle's actions as legal and aboveboard.
Two months ago, Manhattan District Attorney Robert Morgenthau, in a separate probe, subpoenaed records the company filed with the state Department of Housing and Community Renewal to win approval for rent increases for major capital improvements.
Both investigations followed a series of reports in the Daily News earlier this year on Pinnacle's practices.
That series revealed the company had filed 5,000 eviction proceedings in Housing Court since January 2004 - one for every four of its tenants. The company has doubled or tripled the rents for its vacated units after installing new kitchens and bathroom fixtures. In several cases reviewed by The News, Pinnacle's higher rents were based on fictitious improvements it had claimed to state regulators.
At the Winthrop Gardens, a 330-unit former Mitchell-Lama complex in the Bronx, for example, DHCR recently ordered 19 rent rollbacks on renovated apartments, and the agency is reviewing eight more complaints.
Some tenants won up to $8,000 in back rent, and in at least two cases, DHCR awarded tenants triple damages, which can be assessed whenever the agency deems an overcharge "willful."
Pinnacle has claimed "clerical errors" at Winthrop.
"Any large organization is going to have a certain error rate," Fisher told The News earlier this year.
The Spitzer subpoena has demanded rent records and invoices for all apartment and building-wide improvements at Winthrop and for other Pinnacle properties throughout the city, a source familiar with the investigation said yesterday.
A spokesman for Spitzer declined to comment. But one law enforcement source said the AG's office is working closely with DHCR staff on the probe.
Pinnacle's applications for rent increases based on building- wide improvements - commonly known as MCIs - have also become a focus of Morgenthau's investigation.
In late June, a few weeks after the DA issued his subpoena, Pinnacle withdrew two applications for MCI rent increases it filed with the state, DHCR officials said.
One application was for $46,000 the company said it spent on a new roof at 86-06 35th Ave. in Queens; the other was for $36,000 for a new roof and entrance doors at 91 Fort Washington Ave. in Washington Heights.
"It's unusual for a company to voluntarily withdraw an MCI application," DHCR spokesman Peter Moses said.
Asked about the sudden withdrawal of those MCI applications, a spokesman for Pinnacle cited "business reasons."

This Is A Wakeup Call!

2006-08-03T10:22:00.000-04:00

DOWNTOWN EXPRESS
Volume 19 • Issue 11 July 28- - August 3, 2006

PINES IN THE SKY FOR TRIBECA'S WEALTHIEST TENANTS

By Ronda Kaysen
The residents of 101 Warren St. will not need to trek upstate to enjoy pine trees — they’ll have a whole grove of them right outside their window.
The new luxury development currently under construction will come equipped with a bucolic grove of 101 Austrian pine trees set atop the building’s third floor terrace. The building’s sports center will open out on the grove, and all the residents in the 227 condo units will have access to the trees.
“There’s just the serenity and peacefulness of this grove,” said landscape architect Thomas Balsley. “The needles, the texture, the sound of the wind going through the pine trees above. It’s really an extraordinary experience, it’s almost religious. It’s one that would be transported to this roof as a gift to the residents of this building.”
The “gift” will be reserved for the condo residents only. The public and rental tenants in the building’s 163 rental units will not have access to the forest or any of the other amenities reserved for the condo residents.
“You’ll see the pines rising off from the roof, but you will probably have to go across the street to see them,” said Balsley.
In 2005, the Lower Manhattan Development Corp. set aside $15 million in Community Development Block Grants for 77 units of affordable rental housing at the lot, formerly called Site 5B. “They will have their own amenity rooms in the rental building,” Jeffrey Sussman, executive vice president for the developer, Edward J. Minskoff Equities, Inc., said in an e-mail. Rental tenants will have a separate fitness room and lounge and a different address: 89 Murray St.
The 1 million sq. ft. development has no public plaza, either. “The rental building was the giveback for the community,” Lawrence Kruysman, Sunshine Group’s director of sales for the property, told Downtown Express.
The Skidmore, Ownings & Merrill-designed building will open at the end of 2007 and already, buyers are grabbing at the luxury abodes, which range from $1.2 million for a one bedroom apartment to a whopping $16 million for a five-bedroom 34th and 35th floor duplex. Nearly 50 percent of the units have sold since they hit the market in April. “Sales have been great,” said Kruysman.
Promotional materials boast a Whole Foods Market, a sports center and the building’s proximity to P.S. 234, “the city’s top ranked public school.”
A promotional video shows a future Tribeca family—equipped with a handsome couple, their two curly-topped young children and miniature dogs—reveling in their sleek, modernist abode.
Current Tribeca residents have long complained that 234, which is currently at 120 percent capacity, will be further squeezed by the new residential developments in the neighborhood.

http://downtownexpress.com/de_168/pinesinthesky.html

Another Battle In The Gentrification War

2006-07-07T22:12:00.000-04:00

http://walkthrough.nytimes.com/
Jul, 28, 2006
8:50 pm

The building at Broadway and 151st Street, where Christine Timm’s family considered an apartment before finding a bigger and better deal in the suburbs, is owned by the Pinnacle Group, which buys undervalued buildings in Harlem and Upper Manhattan.
Last spring, a group called BRUSH, an acronym for Buyers and Renters United to Save Harlem, sprang up in protest, accusing Pinnacle of harassing and evicting tenants, making substandard repairs and jacking up rents. The BRUSH blogsite details the controversy. – JOYCE COHEN

Tenants to Spitzer: Investigate This!

2006-06-03T23:01:00.000-04:00

By Kristen Lombardi
Village Voice
Posted In The Streets
May 25, 2006

Tenants gained some ground in their ever escalating battle against the mega-landlord known as the Pinnacle Group, the most hated landlord in upper Manhattan these days.
This week, the Voice wrote about the litany of complaints that tenants have lodged against Pinnacle and its owner, Joel Wiener, which include everything from aggressive evictions to intentional harassment to possible fraud. Today, tenants took their complaints straight to Attorney General Eliot Spitzer, calling on the state's top cop to open a criminal investigation into the real-estate firm's tactics.

Dozens of tenants, members of the Mirabal Sisters Cultural and Community Center, in Washington Heights, gathered outside Spitzer's downtown offices on Broadway Street, carrying signs that read SPITZER INVESTIGUE A PINNACLE and DEMANDAMOS INVESTIGAR A PINNACLE, and chanting,"What do we want? Justice! Now!" City Councilman Robert Jackson, a Harlem Democrat and prime Pinnacle foe, made an appearance, complete with rousing remarks. And then Luis Tejada, who heads the Mirabal Sisters, delivered this message to Spitzer, a.k.a., Champion of the Little Guy: "We are here to tell you to investigate this company because Pinnacle is one of the big landlords in New York and is abusing the poor people of this city."
Thirty minutes into the demonstration, Henry Lemons, Spitzer's deputy chief investigator, descended from his office to the lobby to meet with Tejada and tenants. Tejada handed Lemons a 2,000-strong petition requesting a formal inquiry into Pinnacle for, as the petition states, "illegal rent increases and overcharges, deceiving management practices, illegal eviction, discrimination, and harassment." In an accompanying letter, the group also demands the attorney general review all Pinnacle eviction cases, repair complaints and harassment complaints, and rent increase applications in order to stop what is called "the frauds and abuses of Pinnacle."

Lemons promised to deliver the materials to the criminal investigations unit, which would assign an attorney to review the matter.
Wiener declined to comment on this latest development. But sources close to the firm say the petition is laced with errors and misinformation.
Whether Spitzer believes the same or not? Well, stay tuned.
As Lemons told Tejada today, "I assure you that we will respond."

http://www.villagevoice.com/blogs/powerplays/archives/002646.php

Tenants take allegations of Pinnacle abuses to Attorney General for full investigation

2006-06-03T23:00:00.000-04:00

by TALISE D. MOORERAmsterdam News Staff
Originally posted 6/1/2006

Fueled by a desire for justice, tenants from vast properties owned by Joel Weiner, owner of the Pinnacle Group company, who possesses significant holdings throughout Manhattan and the outer boroughs, took their protest of alleged abuses by the real estate giant to the offices of the State Attorney General Eliot Spitzer.Just one week since an unprecedented joint hearing hosted by Community Boards 9, 10 and 12 was held at Riverbank’s Civic Center to hear testimony, frontline protestors rallied outside the Attorney General’s office in lower Manhattan. During the afternoon thrust, tenants presented petitions with nearly 2,000 signatures to Henry Lemons, Spitzer’s deputy chief investigator, who vowed to review complaints and respond within two weeks.Luis Tejada of Mirabal Sisters, a principal voice for social justice and better opportunities for immigrants, low income residents and people of color, says that Pinnacle has unleashed an arsenal of abuses using legal proceedings to uproot longtime residents to make way for luxury housing.Pinnacle is accused of filing thousands of eviction proceedings on grounds of non-payment when tenants have actually proved payments; or brought holdover proceedings even after a tenant has gone through great length to prove their tenancy.“They [Pinnacle] have also managed to get HPD-sanctioned recovery of Major Capital Improvement (MCI) expenditures on their properties, and our research shows that in many instances MCI claims that some properties were padded, fraudulent or non-existent,” said Tejada.Citing examples of such irregularities, Tejada said a tenant’s rent at 610 Riverside Drive spiked to $1,300 from her regular $725 per month as a result of “exorbitant” repairs in her apartment. Other examples of “suspicious” accounting include claims to HPD that the company spent $40,000 on a new floor when they allegedly spent between $1,100 and $1,900; the purported use of 105 gallons of paint to paint one apartment; intimated spending $450 for three (3) fuses; and claimed they spent $21,000 for the front door at the Riverside property back in 1998.“We feel that HPD should bear some criminal accountability for allowing such claims by Pinnacle to persist,” said Tejada.In mutual dissent, elected officials including Congressman Charles Rangel, Assemblyman Keith L. T. Wright, Council Member Inez Dickens, Assemblyman Herman D. Farrell, Jr., and Council Member Jackson, confirm they also suspect that Pinnacle is using dubious tactics to jack up the rent or to evict people from their homes. “Although, their underlying intent seems disguised by legitimate court proceedings,” said Council member Robert Jackson, whose constituency is in the 7th Council District in upper Manhattan.“I represent many of the people who are here today, and if my people feel they have been discriminated against, and that Pinnacle is doing illegal things to displace them to get higher rent, clearly there needs to be an investigation,” said Jackson.Jackson said following last week’s joint CB hearing, he and several other officials have teamed up to identify the best protection for the people they represent. So far, several of them are pursuing a budget of nearly $250,000 to retain two attorneys, paralegals and support staff to take up and review legal remedies; and an autonomous network of resources is taking shape to counterbalance Pinnacle’s purported “takeover.”Calls to Pinnacle for comment were unanswered. Previously, Weiner claimed all his actions are above board.Pending the Attorney General’s response to tenant’s petitions, some elected officials and housing watchdogs believe that a surefire way to end this crisis and prevent others from springing up is to repeal the Urstadt Law, a 1971 law that essentially took away control of rent regulation from New York City’s local government, that was pushed through by then Governor Nelson Rockefeller, and strengthened by the incumbent Governor George Pataki in 2003.The Urstadt Law was named after Rockefeller’s then Housing Commissioner, Charles Urstadt.Skewed by a body of legislators from upstate districts, where few people rent but own private homes, these changes in the rent regulation laws, “have resulted in what some estimate to be more than 100,000 rent stabilized apartments in New York City becoming ‘decontrolled,’ with rents hiked to whatever the landlord wants to charge,” according to a Gotham Gazette report.Repealing Urstadt would help the city regain home rule over rents and evictions and make housing advocates work less onerous.

http://www.amsterdamnews.org/news/Article/Article.asp?NewsID=69974&sID=4

Sheriff Notices Outlaws

2006-06-03T22:59:00.000-04:00

By Juan Gonzalez
NY Daily News
Friday, May 26th, 2006

With evidence mounting that Pinnacle Group LLC has become a landlord run amok, state Attorney General Eliot Spitzer has finally taken notice.
Spitzer, who made a name for himself ferreting out crooks on Wall Street, has been virtually AWOL when it comes to policing state rent laws.
But his office has been peppered over the past few weeks with complaints against Pinnacle - one of the city's biggest owners of rent-regulated apartments - from elected officials, community leaders and hundreds of irate tenants, some of whose woes have been detailed in the Daily News.
"Our office is looking into this matter," Spitzer spokesman Brad Maione said this week.
Yesterday morning, the Mirabal Sisters Center, a West Harlem community group, gave Spitzer more reasons to get involved: a petition signed by more than 2,000 upper Manhattan residents claiming that Pinnacle is systematically forcing out longtime tenants and then illegally driving up rents to newcomers.
Company chief Joel Wiener says all of Pinnacle's actions are above board, and an independent survey he commissioned shows most tenants are satisfied.
"[Rent laws] are a convoluted and complicated system that at times are unfair to tenants and at times unfair to landlords," offered Ken Fisher, a lawyer and former city councilman who now represents Pinnacle.
For the past three weeks, this column has detailed how scores of tenants in up-and-coming neighborhoods - many of them elderly - have been victimized by Pinnacle.
Some are too poor or too overwhelmed to challenge Pinnacle's eviction mill, and have simply moved away.
Others have fought back.
This column reported last week that four tenants at 706 Riverside Drive in West Harlem won major reductions the past few years in their rents and thousands of dollars in refunds from Pinnacle after they filed successful overcharge complaints with state monitors or in the courts.
Lizette Gonzalez is another tenant who prevailed.
In November, the state's Department of Housing and Community Renewal directed Pinnacle to give her an $8,000 rent refund and reduce her $1,437 rent by nearly $400.
Back in March 2004, Gonzalez, who works for a big Manhattan law firm, moved with her husband and child into a Pinnacle building on Olinville Ave. in Allerton, the Bronx.
At the lease signing, a Pinnacle representative told her the rent was $1,350 for the two-bedroom unit, which had just been outfitted with a new kitchen and bathroom. That went up to $1,437 the following year.
One day, Gonzalez happened to meet a daughter of the previous tenant of the apartment.
"You're paying too much for rent," the woman warned her.
Gonzalez rushed to the local office of the state Division of Housing and Community Renewal and asked to see a rent history for her apartment.
She was stunned to discover that the previous occupant was paying just $594 a month. Pinnacle had more than doubled the rent - simply by claiming a major renovation for the vacant apartment.
Under state law, a landlord is permitted an automatic 20% vacancy increase for rent-stabilized units. If major renovations are done, the landlord can hike the rent by an additional 2.5% of the cost of the work.
Rent laws under Gov. Pataki have become so protective of landlords that owners don't even have to produce proof of those improvements until a new tenant files a formal challenge with DHCR.
If no challenge occurs within four years, the price set by landlord automatically becomes the legal rent.
Most tenants, of course, don't even know they can challenge a rent hike. Gonzalez did - forcing Pinnacle to produce invoices for $9,189 for the new kitchen and bathroom.
Even though the repair costs had not been inflated, Gonzalez's new rent still far exceeded what state law allowed.
DHCR monitors who reviewed Gonzalez's challenge quickly concluded that Pinnacle was overcharging her. In a Nov. 25 opinion, the agency reduced her rent to $1,088, and it directed Pinnacle to refund $8,070 to her.
Then there's the example of Department of Education employee Anthony Casasnovas.
Last June, he and two roommates signed a lease for an apartment at another Pinnacle building, 3657 Broadway in West Harlem. When they moved in, the apartment had not even been painted or cleaned, and mildew was sprouting all over the bathroom ceiling.
Pinnacle told them the apartment's legal rent was $2,200, which would have removed it from rent-stabilization rules.
But the company didn't charge them $2,200 - it offered what it called a "preferential" or discounted rent of $1,800 for the first year.
A few weeks ago, Pinnacle sent Casasnovas a lease renewal form for June 1 that would have increased the "preferential" rent to $1,900, but still claimed a legal rent of $2,200.
Sensing something wasn't right, Casasnovas went to DHCR to get a rent history. He learned the apartment's registered rent had been only $683 in 2002. That year, when a new tenant moved in, Pinnacle nearly tripled it, to $1,700.
Housing experts whom Casasnovas consulted told him the landlord would have to show more than $44,000 in renovations to justify that rent.
"There's no way they put that much money in this place," he said.
Pinnacle hasn't notified the state that it raised Casasnovas' "legal rent" to $2,200. As far as the state knows, the last registered rent for that apartment is $1,700 - still a stabilized unit.
But in Pinnacle's convoluted world, that apartment is already free of rent controls. This week, with the help of his tenant association, Casasnovas filed a rent overcharge claim with DHCR.

http://www.nydailynews.com/news/col/jgonzalez/story/421191p-355459c.html

Granny vs. Landlord

2006-06-03T22:52:00.000-04:00

May 24, 2006
By Juan Gonzalez
NY Daily News
What kind of landlord tries to evict a 75-year-old woman from her rent-controlled apartment while quietly pocketing welfare rent checks in her disabled husband's name?
Welcome back to the world of the Pinnacle Group - the landlord that's filed an astonishing 5,000 eviction cases since January 2004 against its nearly 20,000 rent-regulated tenants. Many of them are seniors, disabled people or immigrants unaware of their legal rights.
Josephine Colon and her husband, Abdias Venegas, have been ensnared in the Pinnacle eviction mill for nearly two years.
In August 2004, a month after the firm bought a group of buildings on Morrison Ave. in the South Bronx, it sued to evict Colon. Since then, the firm has tried to oust nearly two-thirds of the 300 tenants in the complex.
At first, Pinnacle claimed Colon owed $1,290 in back rent on the two-bedroom apartment, where she has lived since 1983.
"I didn't owe them anything, and I have all my receipts to prove it," Colon said last week.
Her portion of the rent on the $439-a-month apartment is permanently frozen at $267.20. That's because the city's rental assistance program for impoverished senior citizens directly pays her landlord any increases above that amount.
Colon brought to Bronx Housing Court the postal money order receipts for her share of the rent. Yet Pinnacle's lawyers insisted they had no records of receiving four of those payments.
They demanded iron-clad proof: tracking reports from the post office for each money order in dispute - some dating back to August 2003.
In January 2005, after Colon found those tracking reports and brought them to court, Pinnacle credited her for all but $446 - meaning the eviction efforts would continue.
On March 29, 2005, a Pinnacle representative, as part of a motion for a final judgment to evict Colon, signed a sworn affidavit in court that she was still in arrears - now for $229.
It took until June 2005 before Pinnacle finally dropped its nonpayment case, even though they still claimed she owed $90.
But Colon's fight isn't over.
Even before the nonpayment case was settled, Pinnacle started a new Housing Court eviction action against her, this time claiming a horde of cats in her apartment had created such a foul odor that she was a nuisance to the entire building.
Colon and her family acknowledge she kept as many as 13 cats at one point. Such a brood, as you might imagine, left a strong odor. But the family says she has since given away all but three cats and cleaned up the apartment.
An assistant to Civil Court Judge Lydia Lai inspected Colon's apartment on Feb. 23, 2005, reporting there was "smell of urine in the apartment" but "no smell in hall outside."
The judge herself conducted two inspections, including one last December. She agreed with Pinnacle's attorney that the smell "seems to have seeped into the walls" and required professional fumigation.
Obviously reluctant to throw an old lady and her husband out, the judge urged Colon to do a thorough cleaning job.
Colon complied. On Dec. 29, a city health inspector who visited the apartment reported it was clean. There were "some odors," the inspector noted, but "no odor nuisance in hallway."
Pinnacle's lawyers won't give up. Yet another inspection by the judge and a final hearing is set for early June.
But the most amazing and bizarre part of this story is how Pinnacle, while fighting to evict Colon, had quietly cashed 27 rent checks for more than $2,000 from the city's Human Resources Administration for her pad.
The first check was mailed in March 2005, according to HRA records. It was earmarked as rental assistance for her husband, a Guatemalan immigrant partially paralyzed in an accident a few years ago.
The checks have been mailed by the city every two weeks since then, in varying amounts.
"They've never told me anything about that money and haven't given me any rent statements since they took me to court," Colon said yesterday.
Pinnacle also didn't tell the Housing Court about the HRA money. When I asked Pinnacle about those checks, a spokesman asserted last night that payments began in June 2005 and were being applied to Colon's rent. They actually said Colon now has a credit of $1,444.
Even here they were wrong. According to HRA records, Pinnacle started getting the checks in March 2005. By the end of April, the company had received more than $2,256 from the city.
Why would Pinnacle seek to evict Colon when she had a rent credit? And why would they keep Colon's rent surplus a secret from her? As it stands today, Pinnacle owes Colon more money than it demanded from her when they first put her on this eviction mill.

Pushed Off the Pinnacle

2006-06-03T22:50:00.000-04:00

Tenants accuse mega-landlord of forcing them out
by Kristen Lombardi
Village Voice
May 23rd, 2006 11:47 AM
BRUSH tenants meet in Harlem: (from left) Marge Charron, Debbie Brown, Brenda Tyus Faust, and Kim Powellphoto: Stacy Kranitz
Pedro Garcia got a registered letter from his landlord last August, a few months after his parents moved from the apartment where he grew up in Washington Heights. Garcia, 28, who runs a family-owned grocery store, had lived with them in their rent-stabilized place on Riverside Drive for 15 years. In 2003, the Pinnacle Group bought the building, at 610 Riverside. By the time the letter arrived, Garcia had gotten used to hearing horror stories from his neighbors who'd found similar surprises in their mail.
His showed up after his parents bought a house and moved into it, leaving Garcia and his two kids in the apartment. Under city rental law, he should be able to continue living in the apartment. But Pinnacle moved to evict him, claiming he wasn't the legal tenant. His mother had signed the original lease, and she had tried to renew it in her son's name last year. "He wouldn't accept the lease with my name on it," Garcia says, referring to the company's owner, Joel Wiener. Nor would the firm cash his $620 monthly rent checks, letting him accrue $4,000 in arrears instead.
So Garcia has had to appear at Manhattan Housing Court. Twice, he has produced his birth certificate, utility bills, and rent receipts. Twice, Pinnacle has refused to settle.
"What he's doing to me he's doing to other people," says Garcia, his case still pending. "He wants to kick people out."
Over on West 150th Street, in Harlem, Ray Jones has also gotten a registered letter. His eviction notice from Pinnacle came last fall, after the company bought the 540-unit Dunbar Apartments, where he has lived with his family since 1967. Jones, 45, a retired corrections officer, has turned out to be one of hundreds of Dunbar tenants in jeopardy.
At first, Pinnacle took Jones to housing court for not paying rent. He was deliberately withholding his money to force the company to perform repairs on his rent- controlled apartment. In January, a judge ordered the landlord to fix eight code violations and compensated Jones, wiping away 30 percent of his $1,700 rent debt.
Next, the company challenged his legal tenancy. Over the past six months, he has appeared in housing court five times, armed with phone bills, old driver's licenses, and records dating back two decades to prove he has succession rights to his home. A judge ruled in his favor, yet Pinnacle still refused to give Jones new keys. To get a pair, he had to return to court—twice.
"I feel these are tactics," Jones says. "It's intentional harassment to try to get you out."
That sentiment came across only too clearly at a special May 15 hearing about Pinnacle, one of the city's largest owners of rent-regulated apartments. More than 200 residents from Upper Manhattan turned up for the forum convened by three community boards. There, for over two hours, politicians like Democratic U.S. representative Charles Rangel, of Harlem, and City Councilmember Robert Jackson listened to emotional testimonies from tenants. One of the renters called Pinnacle a "high-tech slumlord."
One by one, residents accused Pinnacle of aggressive court tactics—attempts to violate tenants' succession rights, for example, and to evict for bogus reasons. They complained that the company fails to make repairs, or delays repairs, or does shoddy improvements to raise rents beyond regulated limits. Mostly, they blasted the real estate giant for moving into their neighborhoods and moving them out.
Today, Pinnacle has come to epitomize the gentrification of northern Manhattan, where rents remain relatively low and apartments are large. The company has purchased dozens of buildings throughout Harlem, Washington Heights, and Inwood, quickly installing floodlights around the perimeters and posting trademark American flags out front. The effect is particularly pronounced at the now ultra- illuminated Dunbar complex, with its 40-odd buildings. "You probably can see the Dunbar from space now," says Michael Drake, who has lived there since 1967.
Nowhere is Pinnacle's stake in the area more apparent than along Riverside Drive, from West 135th north, where 12 or so properties shine brighter than the rest, their flags rustling in the wind. Wiener has owned some of these Riverside Drive properties since the 1990s. But he has quietly bought most of his 200-strong real estate portfolio in Manhattan more recently. A review of city records shows that he and his partnerships owned 19 buildings in 2003, and 37 a year later. Then, in August 2005, he purchased some 70 buildings in and around Harlem for more than $300 million in funding from the Praedium Group, a national private-equity firm. That doesn't take into account properties in the Bronx, Brooklyn, and Queens. Currently, city officials believe Pinnacle owns 420 buildings in all five boroughs, or 19,085 apartments.
Wiener declined an interview request from the Voice for this article. Instead, he issued a five-paragraph statement in which he insists his company's tactics are aboveboard. To hear him, the firm has never wrongly evicted a tenant. Nor has it done slipshod repairs or cosmetic improvements simply to hike up rent. Pinnacle, Wiener points out, has just done an independent survey of tenants and found that most are "satisfied."
"We work very hard to restore [buildings] into affordable, safe, attractive homes for our tenants," the statement reads. "We want them to be places we are proud of and places in which tenants are proud to live."
Try telling that to Kim Powell, of the newly formed anti-Pinnacle group Buyers and Renters United to Save Harlem, or BRUSH. A Pinnacle tenant for nine years, Powell, 45, who lives at 706 Riverside Drive, says she has been battling the landlord's methods. Case in point: In 1999, she noticed her bedroom wall bulging from water damage. Rather than fix the leak, she says, Pinnacle workers installed a layer of Sheetrock to disguise it. Last year, the Sheetrock crumbled and workers returned. Now, Powell says, the wall is buckling again.

"That's the kind of repairs Pinnacle does," she says. "It's one tactic."
BRUSH's Heidi Clyde counts herself a veteran of Pinnacle tactics too. Clyde, 28, has lived in her rent-stabilized apartment at 668 Riverside Drive since age two. Clyde's mother died in 1994, and Clyde remained in the apartment. Then in May 1999, Pinnacle bought the building. Within months, she says, "I started getting court papers from Pinnacle." In the next year, the company moved to evict Clyde repeatedly, claiming everything from nonpayment to illegal tenancy. Finally, in 2000, the company backed off and gave Clyde a lease.
"I've been fine since," she says. But hearing new tenants relay their court experiences has struck a chord for her. "It's obviously systematic."
Tenants and politicians alike fear that a pattern of gentrification is at work: A landlord gets existing tenants out, raises the rents, and in the long run, goes condo.
Says Councilmember Jackson, who has gotten involved with BRUSH, "By operation, Pinnacle is driving people out."
Not everyone believes that Pinnacle has a grand plan. Frank Ricci, of the Rent Stabilization Association, which represents 25,000 property owners in the city, including Pinnacle, doesn't buy the argument that Wiener is just looking to make a buck. Sure, some landlords pay too much for rent-regulated buildings, and they try to squeeze out existing tenants. But not Wiener.
"I don't believe that's his motivation," Ricci says. Two months ago, he says, Wiener came to visit him at the association, giving him a presentation on his real estate purchases. He showed him before-and-after pictures of buildings Pinnacle bought last August—including neglected structures owned by Baruch Singer, who ranks ninth on nycworstlandlords.com and made the NYC Housing Preservation and Development Department's list of "major problem owners" in 2003. During Wiener's spiel, Ricci relays, "he said to me, 'Look, I don't do this for the money anymore. I do this because I believe in preserving old buildings.' I have no reason not to believe him."
Besides, he says, Pinnacle has actually improved buildings. Over at the Dunbar, which had fallen into disrepair under Singer, city inspectors recorded some 2,000 violations before August 2005. Now, the number has dropped to around 400. City records show that the company has 19,470 violations to date, or an average of one violation per unit. As far as slumlords go, that's benign—indeed, city officials say the worst landlord has buildings with 20.9 violations per unit.
Even Pinnacle tenants say things have gotten better. Barbara Nienaltowski, of the Dunbar Tenants Association, says residents "were fighting a different kind of battle before." Under Singer, they couldn't get basic services. Security was weak. Trash littered the halls. Tenants had to fight for repairs.
Now, as it typically does, Pinnacle has installed 84 security cameras in the complex, as well as new doors and intercoms. It has improved the common areas, trimming gardens, collecting garbage, and cleaning out the flea-infested basements. Nienaltowski explains, "A lot of people here look out the window and think Pinnacle has done a good job, and they have. But the question is for who. Is it for the people who live here now or the people who will come and take our places?"
The threat of being pushed out has galvanized tenants to fight back. Back in November, for instance, Powell and eight other tenants got the idea to form BRUSH after receiving news that Pinnacle plans to convert their Riverside Drive buildings into condos. The company's asking price for their longtime homes? $800,000 to $1 million.
"There is clear displacement afoot," Powell says, "so we decided to put on the pressure."
And they have. In the past six months, BRUSH has spearheaded several community meetings drawing hundreds of angry Pinnacle tenants. In March, it pushed for the West Harlem community board to hold a hearing on the company, where board members say they heard more complaints about a single landlord than in recent memory. That month, after getting deluged by tenant phone calls, Democratic state assemblyman Keith Wright, of Harlem, joined BRUSH in what he calls "a good old-fashioned picket line" outside the company's midtown headquarters.
"You don't want this many forces to go up against you," Wright observes. Pinnacle critics may not have the deep pockets, he says, "But I go back to the old philosophy, 'The people united will never be defeated.' That's what has begun."
After last week's hearing, at least, elected officials are pledging to stop the so-called Pinnacle takeover. Congressman Rangel tells the Voice he's reaching out to local bar associations to round up lawyers to help tenants pro bono. And he plans to appeal to Mayor Michael Bloomberg. Perhaps the city could investigate Pinnacle, he says, or provide funding to save affordable apartments.
Other politicians have bigger ideas. Jackson talks about raising money for a nonprofit solely devoted to keeping Pinnacle in check.
For tenants, it's personal. "My roots are here," says Jones, who recently became vice president of the Dunbar Tenants' Association. "So I am not afraid to fight. I will organize, agitate, and do everything I can to ensure tenants don't lose their homes."

Tenants Say Landlord is Pinnacle Point of Poor Housing Conditions in Harlem

2006-06-03T22:48:00.000-04:00

by TALISE D. MOORER Special to the Amsterdam News
Originally posted 5/18/2006
For the first time in the history of Central Harlem, Community Boards 9, 10 and 12 came together to host a joint hearing (chaired by Jordi Reyes-Mont Blanc) aimed at ending dubious practices by greedy landlords that displace longtime villagers, and ending the reign of the Pinnacle Group LLC in particular, whose tenants describe as a slumlord who fattens its burse by operating sub-par to poor housing accommodations.Stepping to the microphone one after another, angry tenants detailed their disgust and frustrations over documented complaints they’ve made concerning poor living conditions within their apartments, owned and operated by Joel Weiner, principal of the Pinnacle Group LLC, the real estate company that has filed an astonishing number of eviction proceedings since 2004 against tenants who live in its nearly 20,000 Apartments.Purportedly, those cases were suddenly dropped within hours after at Pinnacle got wind of media inquiries.Weiner has been under fire lately from housing advocates who say his company harasses rent-stabilized tenants, in order to vacate apartments and sharply increase rents.Weiner claims all his actions are above board.One tenant from Amsterdam Avenue testified that one-week after Weiner took over property from previous the owner, called “Singer,” a notorious slumlord among the city’s Top Ten, the property went up in flames in what investigators allegedly label a “suspicious fire.” Another said she was offered to buy her apartment - which currently has 20 active violations - for $500,000, astronomical she says, considering her struggle to pay the current $600 per month. And Michael Drake of the Lombard Tenants Association said that more times than not, Pinnacle uses unskilled and unlicensed laborers to “fix” things, further compounded by use of inferior materials.Congressman Charles B. Rangel roused the capacity crowd who parked on the edge of their seats at Riverbanks’ Civic Center with an announcement that the Community Service Society has agreed to scrutinize every proceeding or summons brought to housing court by the Pinnacle Group. “You are the wind beneath our political wings,” said Rangel while expressing how moved and proud he is that the community has taken an organized stand. He added, “What we’re doing here is stopping a broader conspiracy to take our community away from us - by stealing away affordable housing,” stated Rangel.Rangel told the audience that they have also earned the appreciation of lawyers working on their behalf - knowing that there is unity in the community. Rangel noted the burden of proof in court in this instance, “should not be on the back of the single mother struggling to care for her family; not the senior citizen; nor any of us.”Activists including candidate for state senator, Bill Perkins, claim that the Pinnacle Group is a front and vanguard of devious efforts that allows landlords to hide their interests while the larger company gobbles up the housing stock for luxury condos, driving up prices beyond the reach of current tenants.Popular opinion among elected officials is that this type of practice in Harlem can conceivably be the dangerous prototype for break out groups elsewhere who will work to displace tenants, particularly in the remaining boroughs.Over the last decade The Pinnacle Group has purchased many buildings and hundreds of units within Manhattan, “many of which have already been converted to luxury housing and others remaining empty, possible evidence of warehousing for profit.”In response to an outcry from constituents, community organizations and leaders in greater Harlem and Northern Manhattan, namely Assemblyman Keith L.T. Wright (D-Harlem), mobilized a rally outside Pinnacle headquarters to send a message that unfair tactics and the harassment and unnecessary evictions of tenants located uptown would not be tolerated.“We have been in a long-term battle against gentrification practices and slumlords in Harlem; and, we are well acquainted with Baruch Singer-the notorious slumlord of the Dunbar Houses and five other buildings who reportedly sold his properties to The Pinnacle Group,” said Wright. He added, “In the last few years we have seen a population and development growth never before seen in Harlem. Unfortunately, some of the growth has been at the expense of our current residents, who at the hands of a select number of questionable developers are being pushed out of the neighborhoods they helped form. That is unacceptable and intolerable and must cease and desist.”Representatives of the Pinnacle Group declined an interview with the AmNews, but released a written statement defending their business dealings stating, “It is unfortunate that there are a number of baseless and simply erroneous charges circulating among tenants, public officials and within the community,” writes Robert Barletta, spokesperson for the Pinnacle Group.Pinnacle previously told the AmNews that their employees, “comprise a diverse and dedicated group that work together to provide residents of Pinnacle buildings with the services that all residents deserve.” And, to facilitate home ownership, Pinnacle admits having filed plans to convert certain of its rental properties to condominiums.

Battle Against Pinnacle Group Resembles '78 Riverdale Row

2006-06-03T22:46:00.000-04:00

Norwood News
PUBLISHED BY MOSHOLU PRESERVATION CORPORATION
Vol. 19, No. 10
May 18 - 31, 2006

By HEATHER HADDON
Deirdre Burke and Laura Spalter thought something was fishy when their rent checks went uncashed and new leases weren’t issued after their Riverdale complex was sold. Those warning signs led to a protracted legal battle waged by tenants of the Vinmont Houses against their new landlord, Joel Wiener. That was 28 years ago. But today, Wiener and his current company, the Pinnacle Group, has been using many of the same tactics to push out long-term tenants, as the Norwood News has reported in a series of articles. In 1978, Wiener bought Vinmont, a small complex of 1- and 2-family homes along Mosholu Avenue and West 255th Street. The 30 units were the brainchild of Robert Weinberg, a prominent city preservationist and architect. He nestled Vinmont into a wooded area, constructing a series of affordable rental homes where residents did much of the maintenance work themselves. The charming houses, with front and back yards, are attached with shared utilities. They were a renter’s dream.“People loved them,” said Burke, the principal of PS 340 in North Fordham, who moved into the complex in 1975. “I paid $194 a month for … an apartment with a fireplace, with trees around it.”Wiener purchased Vinmont, and two neighboring complexes, after Weinberg’s death. The two did not share the same vision. Wiener’s goal was to sell off the homes for about $100,000 each within roughly six months, according to tenants. The ensuing battle lasted for over three years.(Wiener did not respond to questions for this story, but a spokesman for his company issued a statement. “It is absolutely ridiculous and unfair to ask Pinnacle about something from more than a quarter-century ago,” said the statement, released by the Marino Organization, a public relations firm retained by Pinnacle.) After the deal, tenants noticed that they stopped receiving rent increases, and rent checks weren’t even cashed. “At the time, we thought it was cool,” said Spalter, a longtime MS 80 teacher, who was then in her late 20s. Tenants eventually grew suspect, and started talking and meeting together. They were alarmed when Wiener fired the property’s longtime caretaker. And they were further angered when they realized Wiener intended to separate the houses into individual properties, sell them and evict those who couldn’t pay. His attitude was, “I’m an owner. I can do it and I will do it,” as Spalter put it. That didn’t sit well with tenants, even among wealthy residents who could have bought the complex outright. They stuck together and formed an association, first successfully moving to get Vinmont recognized as a rent stabilized property. Wiener brought in bulldozers to begin separating the connected sewer and water lines. Tenants went to court and got a restraining order to stop the work.The cat and mouse game cycled on. Wiener filed paperwork to carve out the different parcels later in 1978. Residents would sneak out in the middle of the night and dig up the pipes being installed. And in one of the most important victories, not one resident would let Wiener into their homes to shut off their water connection.“He intimidated the 80-year-old senior citizens, but they still said no,” Spalter said.The war escalated. Residents hired Sheldon Lobel, a lawyer specializing in zoning issues, and Spalter began a letter writing campaign. Burke mastered the pipe blueprints, and searched for permit irregularities at the Buildings Department. Wiener sent eviction notices, but never acted on them.Residents were relentless. “He was so afraid of us,” said Spalter, a lifelong Bronxite who has fought many civic battles. “One day he came to my door and [my husband] yelled out, ‘If he’s bothering you, I’ll go get the gun.’” The firearm was fictitious, but the tenants’ unified resistance was a real source of consternation for Wiener. Franklin Illfelder, a resident who was a teenager at the time, refused to let Wiener inspect his family’s garage. Illfelder, 50, who still lives at Vinmont, says Wiener shoved him in response.Finally, Wiener offered the 1- and 2-family homes to tenants for $50,000 and $60,000, respectively. With $20,000 in fees and a difficult legal road ahead, residents went for the offer, but not before making sure all tenants had a route to ownership. In 1981, Wiener sold them the properties. It was a huge, hard-fought and immensely satisfying victory. “This was the whole basis of our being,” Burke said. The fight was chronicled in a New York legal journal, according to Spalter, but tenants shied away from local reporters’ inquiries for fear it would distract them from their objective. As some of the original residents died or moved away, the story went untold. While the Vinmont battle is long over, thousands of other tenants in buildings bought by Wiener’s current company, the Pinnacle Group, are now facing an uphill contest against him. A growing number of tenants citywide are complaining about the same issues — harassment, eviction notices, the removal of existing building staff — since Pinnacle purchased over 400 rent stabilized buildings beginning in 2002. They fear that Wiener plans to convert their homes into condos. Burke’s and Spalter’s advice to these tenants is to stick together and fight hard. “If you are unlucky enough to live in a Wiener building, form a tenants association and get a lawyer right away,” Spalter said.

http://www.bronxmall.com/norwoodnews/news/N60518page2.html

Took Panes to Hike Bills

2006-06-03T22:44:00.000-04:00

By Juan Gonzalez
NY Daily News
Wednesday, May 17th, 2006
Three months ago, the landlord at 610 Riverside Drive applied to the state for a special rent increase for the rent-regulated building.
Standard procedure - unless the landlord happens to be Pinnacle Group LLC.
Pinnacle, one of the city's biggest owners of rent-stabilized housing, claimed on its state application that it spent $21,770 two years ago for a major capital improvement (MCI): brand-new lobby entrance doors.
Under state rent law, a landlord can pass such MCI costs on to a building's tenants. State approval of such increases is usually a formality once the landlord submits a claim and backup documentation.
But not at 706 Riverside.
"What new doors?" said Adriana Peterson, a tenant association leader who says her neighbors in the west Harlem building were furious when they learned of Pinnacle's application.
"All they did was replace the old locks and the plexiglass on the sides and top of the doors with real glass," Peterson said.
Her account was backed up by a half-dozen residents who spoke to the Daily News. The tenant association immediately filed an objection with the state.
Peterson says she counted 51 new pieces of glass, which would mean each piece cost more than $400.
Pinnacle's application also claimed the "new" doors were replacements for ones that were 35 years old.
Not exactly.
Peterson has lived in the building for more than 40 years and she keeps meticulous records for her tenant group. She quickly produced copies of an MCI rent increase the state had granted to the previous owner for lobby doors back in 1998. The useful life of lobby doors, according to state regulations, is 15 years.
Peterson even confronted Joel Wiener, the chief executive of Pinnacle, at a tenants meeting March 28.
Wiener has been under fire for months from housing advocates, who claim Pinnacle is harassing longtime tenants by systematically filing questionable eviction cases in Housing Court and delaying repairs of major violations. Critics say the company tries to empty and renovate apartments, then sharply drive up rents for newcomers.
The News reported last week that Pinnacle filed more than 5,000 eviction actions in Housing Court against its nearly 20,000 tenants since January 2004.
Wiener, who denies any improper actions, has sought to improve the company's image of late by meeting with his tenants and local political leaders.
"I told Mr. Wiener, 'You're gonna lose this one because we're not paying you $22,000 for 51 pieces of glass.'" Peterson said.
Two weeks later, the state Division of Housing and Community Renewal (DHCR) denied Pinnacle's request for a rent hike at 610 Riverside. In its decision, the agency cited the previous MCI increase and concluded that the entrance doors' "useful life has not yet expired."
The agency did not look into the tenants' more serious claim that Pinnacle never installed new doors to begin with.
Two weeks ago, I asked Wiener about the MCI application for the building and his tenants' claims.
"I contract with an outside firm to file those MCIs and I'm looking into what happened," Wiener said.
But these are not the only allegations of false documents being filed by Pinnacle. As The News reported Monday, several tenants at 706 Riverside complained to DHCR that the company improperly raised rents by claiming thousands of dollars in renovations that were never made.

Dwellers & Pols Rip Apartment Firm

2006-06-03T22:42:00.000-04:00

BY KERRY BURKE and LEO STANDORA, STAFF WRITERS
NY Daily News
Tuesday, May 16th, 2006

A parade of angry and frustrated apartment dwellers complained last night of being pushed around by the Pinnacle Group LLC, a real estate company with holdings around the city.
They accused Pinnacle of overcharging them, dragging them into court for no reason, failing to make repairs, violating their succession rights and warehousing empty apartments to get higher rents.
Nearly 300 people from Community Boards 9, 10 and 12 turned up at the Cultural Center in Riverbank State Park for the joint public hearing. On hand were Public Advocate Betsy Gotbaum and Manhattan Borough President Scott Stringer, but the words of Rep. Charles Rangel (D-Harlem) most roused the gathering.
"What you're doing here is stopping a broader conspiracy to take our community away from us," Rangel declared.
"This isn't just Pinnacle. Developers and speculators have been removing tenants illegally from apartments which they return to the market at ridiculous rents," he said.
The chief purpose of the meeting was to collect testimony and documentation relating to investigations into alleged Pinnacle wrongdoing, which the Daily News has detailed in a series of reports.
The company had filed an astonishing 5,000 eviction proceedings since 2004 against tenants in nearly 20,000 apartments. But all suddenly - were dropped recently, within hours of an inquiry by The News about the particulars.
Thomas Delaney, who is in his 70s, disabled and barely able to walk, says fire drove him from his building in September. He said he lives in a shelter now because although repairs were promised, "little has been done."
Another renter, Bobby Jones, said Pinnacle has dragged him into court six times in six months over phony allegations.
"But I will not leave," he declared. "They can't make me. I'm not going anywhere." A Pinnacle official at the hearing declined comment.

http://www.nydailynews.com/news/local/story/418139p-353186c.html

Tenants Rally Against Pinnacle Group

2006-06-03T22:41:00.000-04:00

Joint Public Hearing Held by Three Community Boards Draws Hundreds, Elected Officials
By Tanveer Ali, Staff Writer
Columbia Spectator
May 16, 2006
Residents of buildings owned by Pinnacle Group LLC had a message Monday night for their landlord—they are ready for a fight.
Hundreds were present at a public hearing held in Riverbank State Park concerning Pinnacle, headed by large-scale developer Joel Weiner, over allegations that it has been abusing its tenants in rent-controlled and rent-stabilized housing.
The event, held in conjunction with Community Boards 9, 10, and 12 of Manhattan, drew several elected officials to voice support for the tenants including City Councilwoman Inez Dickens (D-Harlem), Councilman Robert Jackson (D-Washington Heights), Borough President Scott Stringer (D-Manhattan), Representative Charles Rangel (D-Harlem), and the city’s Public Advocate Betsy Gotbaum.
“The purpose of this effort is to gather factual information and whatever documentation we can for those facts,” said Jordi Reyes-Montblanc, chair of CB9. He said that information would then be conveyed through the appropriate legal and governmental avenues.
Twenty-five tenants approached the podium presenting their cases against Pinnacle, which has reportedly filed over 5,000 eviction notices against its tenants over the past three years. Some said that Pinnacle has been trying to force out lower income residents to make way for more lucrative real estate.
Residents of 706 Riverside Drive have been in an ongoing legal battle concerning rent overcharges with Pinnacle since it bought the building. According to Ernestine Temple, member of the 706 Riverside Tenants’ Association, Pinnacle had appraised the building far above its actual value.
Holding up a part of her apartment’s roof that had broken off three months ago to cameras from the local news media, Temple said that Pinnacle had failed to provide necessary services and repairs for families that had been living in the building for years.
“I truly believe a picture is worth a thousand words,” Temple said.
Bobby Jones, a Pinnacle tenant who has been brought to court by his landlord six times in the past eight months, echoed the words of several others present at the hearing.
“I have a message for Pinnacle … I am not afraid. You cannot make me leave,” Jones said.
Many tenants voiced concern that city and state officials have ignored the tenants, with a few saying that state and city agencies have even been complicit with Pinnacle and similar landlords. But, all the elected officials present at the meeting said that they would ally themselves with the tenants’ cause.
“We have the law on our side. We have morality on our side. We will have the appreciation of the lawyers that know that you [the tenants] are organized,” Rangel said to the receptive crowd.

Housing Wars: Pinnacle of Greed

2006-06-03T22:39:00.000-04:00

By Heather Haddon
The Indypendent
From the May 10, 2006 issue Posted in Local

“I am full of stress,” said Hernandez, who is facing the twin burdens of a lawsuit and difficulty walking. “When will Pinnacle’s abuses stop?”
Thousands of residents citywide are asking that same question. The Pinnacle Group andits owner, Joel Saul Wiener, have unleashed an arsenal of threatening letters, eviction notices, and lawsuits against tenants. Wiener’s goal, according to tenants and advocates, is to push out long-term residents,use renovations and suspicious accounting toraise rents beyond stabilization limits, and then turn them into condos.“Pinnacle is a monster,” said Luis Tejada of the Mirabal Sisters, a Harlem organization supporting the growing ranks of angry tenants.
BANKING ON VACANCY DECONTROLUnscrupulous landlords have always thrived in New York. But Pinnacle is unique in itsscale and financing through the Praedium Group, a real estate investment trust (REIT)on steroids. REITs have been around for decades, but only in the late 1990s did big banks get in the action – just as New York State began allowing apartments with rents exceeding $2,000 to exit stabilization programs.
A handful of banks suddenly saw Harlem and the Bronx in a whole new light. “It’s viewed as a decent investment,” said Jerry Salama, a NYU professor and real estate expert. “The large investment banks are…going to Harlem and buying rundown multifamily homes and fixing them up.”
Credit Suisse First Boston, one of the country’s biggest investment banks, establishedPraedium in the nineties. One Praedium REIT, Praedium Fund V, pooled $465 millionfrom pensions, endowments and foundations to leverage $1.7 billion in acquisitions, according to financial industry reports. The bulk of that went to buy New York apartment buildings. A Praedium spokesperson said they do not comment on their individual holdings. But Kim Powell, a Pinnacle resident from Harlem, spoke candidly about Praedium, “They are not seeing that within their real estate work, there are habitants and human lives.”
Some housing experts are also wary about Praedium and its ilk. “Enron predicted growth in a certain way, and a lot of people lost money,” said Abbott Gorin, an attorney with the Department of Housing Preservation and Development who has sued Pinnacle for code violations. “Renegade actors ruin the investment for everyone. They accelerate a crash.” Praedium is especially brash. As its website states, the company seeks “properties that are ‘broken’ and can in turn be fixed and then sold upon stabilization.” What constitutes a broken property? Not one with faulty boilers, but those that fail to “aggressively manage the current tenant/leasing base.” To fix that, it recommends “strategic capital improvements and proactive leasing.”
MEET JOEL WIENERWho better to carry out that prescription than Joel Wiener? He comes from an oldschool Brooklyn real estate family. Two children from the third generation, Arthur and Joel, carry the torch. Their father, Paul Wiener, gave ownership of a Riverdale co-op to his children. One of the tenants, a woman who asked for anonymity because she is suing the Wieners, sought help when her roof collapsed in 1984. The damage was extensive, but the Wieners didn’t seem to care. “I could squeeze water out of my insulation. Paul said ‘I don’t see any water,’” the tenant said.
Joel has a reputation for being ruthless among many tenants. “He’s so evil. It’s just amazing,” said Laura Spalter, a Riverdale resident who fought the Wieners in the late seventies. Spalter and other residents managed to wrest control of their property, but only after extensive court proceedings. Wiener has done well for himself. He has a fancy car and high-end office, along with a luxury home. He is flattering and laudatory to some, a snide hothead to others, according to those who have tangled with him. Spalter found that Wiener’s own lawyers often couldn’t stop his rants.
Praedium, however, has rewarded Wiener for his behavior. Beginning in 2002, they financed Pinnacle’s acquisition of entire real estate portfolios, including those owned by veteran slumlord Baruch Singer. That deal – an off-market transaction of almost 3,000 northern Manhattan apartments for $500 million – is rumored to be one of the largest multi-family building deals in city history. Even in the hyperactive world of city real estate, Pinnacle’s sprawling web has grown enormously. Wiener owns thousands of apartments in Brooklyn, the Bronx and Manhattan.
His company controls entire swaths of Harlem, Sugar Hill and Washington Heights, along with significant chunks of the Bronx, Upper West Side, Flatbush and Crown Heights. In these areas, Pinnacle targets rent-stabilized properties that are a haven for lowincome residents – from Hispanic families to starving artists.
WIENER’S ARMYWiener runs his operation with military resolve. He maintains a cadre of loyalists, and fires outsiders. Among Pinnacle’s first purchases were former Mitchell-Lama buildings in the Bronx in 2002. Pinnacle proceeded to fire much of the staff within days, according to the Daily News. That year, the city passed a law barring new owners from firing existing staff within 90 days. Wiener has broken the rule since.
Pinnacle has fired more than 200 building supers, as stated in a class action lawsuit filed in federal court last fall. Some were forcibly removed. “[A property manger] threw a Brooklyn super down the stairs,” said Luis Tejada, who spearheaded the suit with a labor law firm. “He walked away and told someone else to call an ambulance.” Most of the supers had decades of management experience. Many were replaced with inexperienced workers from Yugoslavia, according to the suit.
Frank Marino of the Marino Organization, a PR firm hired by Pinnacle, said that while staffing is done on a “building by building basis,” the net result is positive. “If you look at the number of staff working in the properties, you would find an increase,” he said. Perhaps, but the property managers don’t seem very attentive. “They don’t even get out of their cars,” said Fred Criswell, whose mother was fired by Pinnacle after it acquired a building in Inwood where she was the super. Harry Hirsch, Wiener’s right-hand man, revealed in court testimony that he had never visited a building he’d managed for years, nor could he name its super. Neither Hirsch nor Wiener keep complaint records for their buildings, nor do they have a tangible system for managing them, according to the suit. “It’s kooky,” stated Hirsch in his testimony. “I don’t know how we do it.”
FIX IT UP, PUSH ‘EM OUTWhen it comes to renovations, tenants say it’s the supers who are on the job, not licensed contractors. A laundry room erected at 706 Riverside Dr. was condemned because of serious code violations, according to Powell. Rebecca Gilmore, Powell’s neighbor, hired her own carpenter after supers doing a lead abatement left her unit mired in toxic dust. “They also lost my doors,” she said. “It was really shoddy work.”
All of the properties go through the same transformation: an army of security cameras are installed, mailboxes are replaced, then new front doors, lighting and other structural improvements are performed. Compared to some city slumlords, Pinnacle seems saintly. “We’re trying to bring these places back. Why see this as deceiving?” Wiener asked during an interview in which he denounced his critics. “Rather than criticize a landlord who puts in new front doors, you should provide good coverage of them.” But residents worry that the underlying goal is to push enough of them out for a condo conversion.
Pinnacle tenants all over Manhattan have seen vacancies increase, and two Riverside Drive buildings are in the process of becoming condos. Pinnacle says they are generously allowing current tenants to buy their homes. Few can afford the prices, however. “They are trying to sell apartments for over $1 million in buildings with bad pipes and elevators that are always down,” said Paula Odellas, a resident.
Pinnacle does make plenty of major capital improvements, like new windows and boilers.Some of these repairs, which create permanent rent increases, are necessary. Others appear fabricated say tenants. A former Bronx super was told to futz with the electrical plates in his building, and bill for an entire rewiring, according to a source close to the situation. The company intended to replace the entryways at 2300 Olinville Ave. in the Bronx without any obvious need. “I don’t want a new door,” said Joseph Brown, standing next to his solid entryway.
The needs of current residents are at the mercy of Praedium’s drive to “aggressively manage the current tenant base.” In that spirit, Pinnacle frequently takes residents to housing court. The suits are for back rent, but also use creative charges like rent checks using a married name instead of the maiden one, according to tenants. Kim Smith, who worked as staffer for former Councilman Bill Perkins, was shocked to find that a large percentage of residents in a 149th Street building were served court papers. According to city Housing Court records, Pinnacle has initiated over 1,500 cases in the Bronx alone since 2002.
Pinnacle disputes that number, but has yet to provide a different total. People on rent subsidies, including the elderly, have been a frequent target. Bronx Assemblyman Jeffrey Dinowitz helped a 90-year-old Riverdale resident after Wiener sued him for back rent. Dinowitz’s staff found that the man had actually overpaid through credits from a state program assisting low-income seniors living in regulated apartments. “He was double dipping,” Dinowitz said.
Wiener has since said the property is owned by his brother, but Dinowitz’s staff says the management is one and the same.
“THE LANDLORDS HAVE THE EDGE”New tenants have also encountered problems. Those who request documentation of renovations – typically assessed at $25,000 per unit – sometimes learn that their apartments supposedly contain half-a-dozen toilets or hundreds of sheets of drywall.
Erica Martinez, a resident of 801 Riverside Dr., received a court-ordered rent rebate of $300 a month after bogus bills were nullified. “He tried to put all the construction supplies for the whole building onto my apartment,” she said. Frank Marino said the state Department of Housing and Community Renewal (DHCR), which oversees rent-stabilized apartments, would never approve inflated bills. “DHCR has been through this thousands of times,” he said. “They know what a realistic ballparkfigure is.”
They might, but DHCR is notoriously lax. “When a landlord goes to DHCR, they get quick results,” Dinowitz said. “When a tenant goes to them, it can take years. In every way, the landlords have the edge.” DHCR punished Pinnacle for overcharging two Bronx tenants, but the agency dismissed future suits when the company issued a building- wide credit due to a “clerical error,” as letters to tenants stated. When Denise Prescod, a Riverside Drive tenant, went to DHCR to check if she was being overcharged, her unit had no listed rent history. DHCR also can’t determine the number of times a landlord has been sued for overcharges, as the agency “does not compile or maintain such information,” as stated in a letter.
“DHCR is of no help,” Prescod said dryly. Peter Moses, a DHCR spokesperson, said he had “little luck” in getting the department’s history of oversight for several Pinnacle buildings. Then he asked, nervously: “Are you really going to write about them?”
CULTIVATING POLITICAL ALLIESThere are no records of campaign contributions from Pinnacle, but Wiener likes to cultivate influential political allies. “Their strategy is to say they have friends in high places,” said former Councilman Perkins, who was approached for support by Wiener while he was in office.
Perkins says he received a call from Ken Fisher, a lobbyist from a politically connected Brooklyn family, to tout Pinnacle’s merits. Earlier this year, Pinnacle also made a $500,000 contribution to Youth Turn, a group run by Rev. C. Vernon Mason, a disbarred lawyer and ally of Rev. Al Sharpton. But most of Wiener’s sense of entitlement comes from within. “He’s extremely aggressive,” said Spalter, the Riverdale resident who fought Wiener successfully. “Any group that wants to fight Joel has to have several fronts going on at once.”
Many Pinnacle tenants are pragmatic. They know that prices will go up and neighborhoods will change. But they are indignant at being driven out of areas that have only now healed from years of crime and neglect. “You can’t expect to continue paying $200 [in rent],” said Marjorie Moore, a tenant at 725 Riverside Dr. “But we are looking at regional planning that is seeking to relocate us. Wiener wouldn’thave these buildings if we hadn’t stayed here to preserve them.”

http://www.indypendent.org/?p=230

Tenant Davids Take On Goliath

2006-06-03T22:35:00.000-04:00

By Heather Haddon
The Indypendent
From the May 10, 2006 issue Posted in Local
The movement against the Pinnacle Group started with a few dozen neighbors meeting over homemade lemon bars in February. It has grown quickly since. A few years ago, tenants on Riverside Drive in Manhattan began to see disturbing patterns – the removal of their supers, apartment warehousing,lots of superficial improvements – after their buildings changed hands. When Pinnacle moved to covert two properties into co-ops, residents started sleuthing. They discovered Pinnacle had snapped up hundreds of properties citywide, and was using the same tactics elsewhere. “We’re checking how [he’s] been flouting the law,” said Kim Powell, a Riverside Drive resident and lawyer who has done much of the organizing.Powell and other local residents formed Buyers and Renters United to Save Harlem (BRUSH), and began knocking on doors all over northern Manhattan. Each month, their meetings draw more residents expressing remarkably similar stories. A few local elected officials have started attending. The group is now fielding calls from Pinnacle residents all over the city, some of who have started organizing their own buildings.
Throughout the last few years, growing numbers of Hispanic supers sought help from the Mirabal Sisters,a Harlem civic organization, after they were abruptly fired by Pinnacle. Mirabal organized a class action lawsuit against Pinnacle last year, and has joined BRUSH’s efforts. The groups held a joint protest outside Pinnacle’s plush office at 1 Penn Plaza in March.
Housing groups have started to take notice. The Northwest Bronx Community and Clergy Coalition, a veteran organizing group, is assessing the situation with Bronx tenants. Housing Here and Now, a city organization affiliated with ACORN, is looking into Praedium’s financing of the deals. While energy is high, the battle ahead is formidable. Unlike some landlords, Wiener hasn’t hidden from his critics, outspokenly defending his case at local forums. He’s also hammering against opposition. Powell says Wienerbarred an independent inspector hired by tenants from doing an assessment of their building.
Local officials have pledged their support, and helped tenants on an individual basis. The city housing department says it’s looking into Pinnacle. But it will take a Herculean effort to derail Wiener’s operation. “[They] have a tremendous amount of power,” said Paula Odellas, a resident.
The end of Governor George Pataki’s reign may offer a chance to strengthen state housing regulations, which he helped to weaken. “We need to have much tougher laws against landlords who abuse the system,” said Jeffrey Dinowitz, a Bronx Assemblyman. “It’s a real problem.”

Phony Repairs Add to Abuse

2006-06-03T22:28:00.000-04:00

By Juan Gonzalez
NY Daily News
Monday, May 15th, 2006

A hundred gallons of paint for a two-bedroom apartment. Five new flushometers for two toilets.
New doors, range hoods and pedestal sinks that were never installed.
These are just some of the renovations that Pinnacle Group LLC claimed to state officials when it sought to justify huge rent increases for several vacant apartments at 706 Riverside Drive, a rent-stabilized building the company owns in west Harlem.
A group of tenants who moved into the renovated units in 2001 later complained to state housing officials and the courts that Pinnacle was illegally overcharging tenants.
The dogged tenants eventually won major rollbacks in their monthly rent from Pinnacle - a big city landlord that has filed 5,000 eviction proceedings since 2004 against tenants who live in its nearly 20,000 apartments.
In the long 706 Riverside Drive legal battle, Pinnacle submitted hundreds of documents to the state Division of Housing and Community Renewal to try to justify charging as much as $2,000 in monthly rent to new tenants in a building where most current residents were paying about $600.
When they saw copies of Pinnacle's invoices, the new tenants said they were astonished to find their landlord had reported tens of thousands of dollars for work that either was never done, was double- or triple-billed or couldn't legally be claimed as rehab work.
"There was blatant fraud and padding of bills," said Mark Gordon, a Web designer who moved into a seventh-floor apartment with his wife, Anne Beaumont.
Pinnacle eventually agreed in Housing Court to reduce Gordon's rent from $1,900 to $1,100 and paid him $10,000 for overcharges. In doing so, the company admitted no wrongdoing.
Pinnacle originally claimed to the state that it spent $47,000 for improvements to Gordon's 1,200-square-foot, two-bedroom apartment, including a new kitchen and bath.
Under state law, a landlord who renovates a rent-stabilized apartment is allowed to increase its monthly rent by one-fortieth of the cost of those improvements. Thus, a $40,000 makeover translates into a $1,000-a-month increase.
But because the law doesn't require landlords to produce evidence of their repairs unless a tenant challenges the new rent, the system is vulnerable to abuse, housing advocates say.
Among the questionable invoices Pinnacle filed with the Division of Housing and Community Renewal for Gordon's apartment:
· $1,500 for a new main electrical box. A construction expert hired by Gordon concluded there was no new box.
· $1,029 for 100 gallons of latex paint and $454 for 45 gallons of ceramic adhesive. That's enough paint and adhesive for an entire building.
· $1,800 for labor to install two new front doors and door handles, installed by contractor Shaban Cecunjanin. There were no new front doors or handles, and Cecunjanin is the building's superintendent.
· $490 for 10 pieces of 3/4-inch, 4-foot-by-8-foot plywood and for 20 pieces of 4-foot-by-8-foot Sheetrock. There was no new plywood or Sheetrock installed in the apartment, Gordon's expert said.
· Three separate invoices totaling $336 for five toilet flushometers. The apartment has only two bathrooms, and Gordon's expert concluded the existing flushometers showed no signs of recent replacement.
· $396 for more than 120 brass nipple pipe fittings; Gordon's expert couldn't find any in the apartment.
· $17,800 for two men to install new sinks, toilets and medicine cabinets in the two bathrooms. One of the contractors Pinnacle claimed it paid was Rasim Toscic, who also happens to be Pinnacle's super for other northern Manhattan buildings. The other was Toscic's brother, Rafaet.
A floor below, tenants Ted and Marjorie Charron found the same story with their invoices:
There was one invoice of $3,948 paid to Rasim Tokic (sic) for supplies purchased at Home Depot for rehab work on three apartments, including the Charrons' and Gordon's.
The actual Home Depot receipt that corresponded to the invoice revealed a few curious items, such as $169 for 240 light bulbs - 80 per apartment.
There was another invoice for the shipment on June 27, 2001, of 30 gallons of paint for the Charrons' apartment. Problem was, they had moved into their new apartment on June 5.
Other Charron invoices were for a new 30-inch range hood and a new pedestal. None was ever installed.
Most comical of all was Pinnacle's Houdini-like use of the invoice that included Gordon's 100 gallons of paint.
The total amount of that invoice was for $1,920. In addition to the paint, it included a bunch of supplies that Pinnacle claimed it used renovating other apartments in the building.
But in the documents it filed with the state, Pinnacle charged $1,200 from that invoice to the Charrons' apartment, $1,456 to Gordon's and $1,724 to tenant Don Gilmore on the eighth floor. Thus, $1,920 in supplies was magically transformed into $5,100 in charges.
All of these "costs" were used by Pinnacle to justify sharp increases to the rents of all the vacant apartments.
Asked about the fraud charges from the tenants of 706 Riverside, company spokesman Robert Barletta said Friday in a prepared statement: "Pinnacle believes that work [full renovations] and invoices were proper." In some cases, the company "settled with the tenants in order to avoid a lengthy litigation process," Barletta said.
Ted and Marjorie Charron eventually got their rent lowered from $1,900 to $1,300, though Pinnacle is appealing that decision.
To get that rollback, however, they had to battle not only their landlord but the bureaucrats at Division of Housing and Community Renewal and the city's Buildings Department. Those agencies repeatedly refused to investigate evidence of false filings by Pinnacle, the Charrons say.
"We're a complaint-driven agency," said Division of Housing and Community Renewal spokesman Peter Moses. "We have no records showing that anyone filed any allegations of fraudulent improvements by Pinnacle."
The agency may want to recheck its records.
On March 24, 2003, Marjorie Charron hand-delivered it a detailed complaint alleging the fictitious renovations by Pinnacle. The letter was time-stamped by the agency, and Charron has supplied a copy of it to the Daily News.
It included photographs of her apartment to prove what work had not been done.
More than three years later, state housing officials have not even bothered to look into whether anything improper occurred at 706 Riverside Drive, and if so, how prevalent such practices are among city landlords - especially Pinnacle.
Housing hearing
Four Northern Manhattan community boards will conduct a joint public hearing at 6:30 p.m. today to examine some of the problems in Pinnacle Group LLC buildings highlighted by the Daily News' Juan Gonzalez. Tenants, company officials and elected officials are expected to attend the meeting at Riverbank State Park, 145th St. and Riverside Drive.

http://www.nydailynews.com/news/local/story/417773p-352913c.html

Full Court Press vs. Poor Tenants

2006-06-03T22:25:00.000-04:00

By Juan Gonzalez
NY Daily News
Sunday, May 7th, 2006

One of New York's biggest owners of rent-stabilized apartments is quietly carrying out an aggressive campaign to chase out many of its tenants.
The Pinnacle Group LLC has filed more than 5,000 Housing Court eviction actions in the past two years, court records obtained by the Daily News show.
That's an average of one court action for every four units that the company owns in the city.
The company often buys a building in a low-income but up-and-coming neighborhood, such as Harlem, Washington Heights, the South Bronx, and Elmhurst, Queens; identifies tenants who, under the law, are vulnerable to being evicted, and begins eviction proceedings.
At Harlem's historic Dunbar Houses, a 534-unit complex that the firm took over last August, court records show that Pinnacle wasted no time. It initiated more than 250 eviction proceedings for nonpayment of rent or illegal occupancy during the first six months.
At a 300-unit complex on Morrison Ave. in the South Bronx, the company took 173 tenants to court in 254 separate actions since acquiring the buildings in August 2004.
For the entire Bronx, where Pinnacle controls more than 3,600 units, its lawyers filed nearly 2,000 dispossess actions during the past two years - an average of more than one for every two apartments.
Joel Weiner, the company's chief executive and himself a lawyer, insists the firm's tactics are completely aboveboard and legal.
"We only go to court when a tenant owes more than two months rent," Weiner said.
Weiner acknowledged that he strictly enforces company policy that only the tenant-of-record on a lease can pay rent and occupy a Pinnacle apartment - going after those whom the company asserts are violating the policy.
But neighborhood leaders say too many of Weiner's legal actions are based on flimsy or dubious claims. They say Pinnacle is using the courts and the law to harass and intimidate long-term tenants.
"Their philosophy is, if I drag you into court enough, I'm going to wear you out," said a major Bronx landlord familiar with Pinnacle's efforts.
"At least once a week, I get a call from someone in a Pinnacle building looking for another apartment," said the landlord, who asked not to be identified.
It is unclear how many Pinnacle tenants were formally evicted or simply moved out once an eviction notice was filed. The company refused to provide any eviction data.
The News examined a sample of 85 eviction cases involving the Dunbar Houses in Harlem. More than a third resulted in a judge's warrant for Pinnacle to evict the tenant or take possession of the apartment.
Once an apartment becomes vacant, Pinnacle typically renovates the unit, then sharply increases the rent - often to double or triple the previous rate - housing advocates say.
"It's called working the building," said Evan Hess of the nonprofit Northern Manhattan Improvement Corp. "Landlords these days want to get rid of as many low-income tenants as possible."
Changes to rent laws that Albany lawmakers passed in 2003 make it easier for city landlords to hike prices after fixing up vacant apartments, Hess said.
On Riverside Drive in West Harlem, where Pinnacle owns more than a dozen buildings, Weiner is planning several condo conversions and is proposing to sell units for up to $1 million each.
"They have become the leading force for gentrification in northern Manhattan," says Assemblyman Adriano Espaillat (D-Washington Heights). "My office is being overwhelmed by complaints from families being crushed by this company."
The growing threat of displacement has sparked a huge backlash from hundreds of Pinnacle residents and local political leaders in a half-dozen neighborhoods.
State Assemblyman Keith Wright (D-Harlem) joined with a newly formed anti-Pinnacle group, Buyers and Renters United to Save Harlem (BRUSH), to picket the company's midtown headquarters last month. BRUSH has sponsored several neighborhood meetings in recent weeks that have drawn hundreds of irate Pinnacle tenants.
In Washington Heights, the Mirabal Sisters Cultural Center has collected signatures from more than 1,500 Spanish-speaking Pinnacle tenants demanding an investigation of the company.
Esther Martin and Juan Silva are two of those tenants.
Martin, 82, has lived in the same rent-controlled apartment at 610 Riverside Drive since 1951. Three years ago, Pinnacle sued to evict her. The company claimed she was illegally subletting while living in Florida.
"She has a daughter in Florida and visits there a couple of times a year, but she's always lived here in New York," said Silva, 66, the woman's nephew, who lives with his widowed aunt in the dilapidated three-bedroom apartment that overlooks the Hudson River.
The supposed illegal tenant Pinnacle named in its complaint, Silva said, was Martin's husband, Joseph Martin, who has been dead since 1996.
Silva accompanied his aunt to Housing Court a half-dozen times over a three-year period. In January, Pinnacle's lawyers suddenly offered them $30,000 to vacate the apartment.
"We refused the money and told them, 'Let the judge decide,'" Silva said.
Pinnacle dropped its case after getting Martin to sign an agreement not to seek succession rights for her nephew in the apartment.
Asked about Martin, company chief Weiner said: "Do I want to sue an 82-year-old lady? No. We had information she owned a condo in Florida. Anyway, now she gets to stay."
Weiner points out he spends millions of dollars to improve some of the city's worst-kept and most crime-ridden slum housing. "I love to restore old buildings," Weiner said.
During interviews with The News and a recent tour of a dozen of his northern Manhattan properties, he showed off some of those improvements. At the sprawling Dunbar Houses, for example, he has reduced the number of city housing violations from 2,000 to less than 700 since taking over last year.
Weiner, who receives major financing from The Praedium Group, a nationwide private equity fund, refuses to say how many buildings he has acquired. Many of Pinnacle's properties are held by subsidiary partnerships and operate under different names. But a review of city records shows that Weiner and the partnerships he controls own at least 440 properties with nearly 20,000 apartments.
Even his strongest critics concede Weiner usually improves common areas as soon as he buys a building. Pinnacle typically renovates public entrances, installs new intercoms, security cameras and bright outdoor floodlights, and invariably raises an American flag on all the company's properties.
But dozens of Pinnacle tenants interviewed in recent weeks say those are largely cosmetic changes to attract new tenants. They accuse Pinnacle of delaying major repairs in existing tenants' apartments for months.
"They [Pinnacle] are awful to tenants," said Assemblyman Jeff Dinowitz (D-Bronx), who successfully battled several Pinnacle court actions against senior citizens in his district. "They are quick to institute eviction proceedings ... but they never get back to us when we call."
One resident's sorry saga
City College music student Frank Montoya knows firsthand how far Pinnacle Group LLC will go to try to evict one of its rent-stabilized tenants.
In 2001, Montoya, 34, moved into a new apartment at 845 Riverside Drive near his school's campus. He roomed with a Columbia University pal who had initially leased the apartment.
When the roommate moved in 2003, Montoya secured the lease in his own name from the landlord at the time. He then got two new roommates to share the $1,300 rent.
A year later, Pinnacle purchased the six-story building.
Last summer, Montoya made his annual trip to his parents' farm in New Mexico, where he usually works a few months as a chef at a nearby assisted-living facility.
In August, Pinnacle sent a registered letter to Montoya's Manhattan address, notifying him that his lease was not being renewed because Pinnacle had evidence he was a legal resident of New Mexico.
Montoya returned to the city in the fall. He sent Pinnacle his rent checks for September and October but the company refused to accept them, even though his lease didn't expire until Nov. 30.
Pinnacle sued for eviction in Housing Court, claiming Montoya doesn't live in New York and is illegally subletting the unit.
"I've been in this city for eight years," Montoya said from his apartment, its walls adorned with his original artwork.
"My driver's license is from New York and I'm registered to vote here. I still need one more course to get my degree," he said. "What more proof do they need?"
Montoya has been to court several times with his documents but the case keeps getting postponed. Pinnacle's lawyers recently filed a discovery motion demanding copies of his income tax returns and the chance to depose him and his two roommates.
The next court date is at the end of the month. Like most tenants Pinnacle sues, Montoya can't afford to pay for a private attorney.
"How can this company just make up a story like this and keep dragging me through court for months?" he said.

http://www.nydailynews.com/front/story/415628p-351129c.html

Firm At Pinnacle of Landlord Disputes

2006-06-03T22:24:00.000-04:00

By Juan Gonzalez
NY Daily News
Originally published May 8, 2006
Carlos Delarosa, Russell Taylor and Rosa Elsevyf-Conrad share a few things in common.
They've all battled recently against eviction by the same landlord, the Pinnacle Group LLC, the real estate company that has filed an astonishing 5,000 eviction proceedings since 2004 against tenants who live in its nearly 20,000 apartments.
And all have suddenly seen Pinnacle drop its cases against them within hours of the Daily News inquiring about their particular situations.
On April 24, city marshals actually evicted delaRosa, his wife and two children from their Morrison Ave. apartment in the South Bronx and promptly changed the locks.
At the time, delaRosa, a restaurant deliveryman, owed a grand total of $493 - just half of the $986-a-month rent for the one-bedroom, fifth-floor walkup.
There must be some mistake, delaRosa told the marshal. He'd mailed Pinnacle most of what he owed the previous week and had an overdue balance of only $100. Besides, the federal government's Section 8 program was paying the bulk of the rent - $786 - directly to the landlord each month, he said.
Tell it to the judge, the marshal replied.
DelaRosa's wife, Jennifer Aguilar, quickly borrowed $100 from a friend, then her husband - armed with the cash - scurried over to Bronx Housing Court. He produced receipts for two postal money orders, payable to Pinnacle for $100 and $300, dated April 7 and April 19.
He also gave a sworn affidavit to Civil Court Judge Pierre Turner that he had mailed the money orders the same day he purchased them. With the $100 he had on him, delaRosa said, he should be up to date with his rent.
Pinnacle's attorney, however, claimed the company had no record of receiving the latest money orders.
Turner immediately granted delaRosa a show-cause order that banned any removal of the family's furniture until a hearing the following day.
But when delaRosa returned home, he discovered the marshals already had carted off the family's furniture and clothes to storage.
That's a rare move: Although some 7,000 evictions are ordered annually in the Bronx, barely 200 result in forcible action by marshals.
"I've never heard of anything like this," said Carmela Price, an assistant to state Sen. Ruben Diaz (D-Bronx), who intervened to assist the family.
The following day in court, Pinnacle's lawyers demanded delaRosa pay $2,000 for moving and storage costs of the furniture, the marshal's fee, plus legal expenses - or they wouldn't let him back in the apartment.
"We could barely pay the back rent." his wife said. "How are we supposed to come up with another $2,000?"
The next day, April 26, I called Pinnacle to ask about the case. Company chief Joel Weiner returned my call within a few hours.
Weiner has been under fire lately from housing advocates who say his company harasses rent-stabilized tenants in order to vacate apartments and sharply increase rents. Weiner says all his actions are aboveboard.
"As soon as I heard about it [delaRosa's eviction], I ordered my super to restore them immediately," Weiner said. "I felt the tenant misunderstood the legal situation. They won't have to pay anything."
That same evening, the family and its furniture were back in the apartment.
Meanwhile, Russell Taylor was locked in his own months-long court fight with Pinnacle.
Back in 2000, Taylor, an academic adviser at New School University, moved into an apartment on St. Nicholas Ave. in Harlem with his girlfriend.
The girlfriend, however, had signed the original lease, so when she moved out two years later, Taylor asked his landlord to add his name as tenant of record. The landlord was Baruch Singer, a reputed slumlord who has been in the news lately because of his relationship to the Brooklyn warehouses that spectacularly burned down last week.
The office people at Singer's Equity Management kept promising to change the name but never did so, Taylor said.
Still, he continued paying his rent for the next three years with no problem.
Last August, Pinnacle purchased the building, along with dozens of others owned by Singer, who still retains a minor share in the properties.
Pinnacle immediately moved to evict Taylor, claiming he owed $3,000 in rent.
"I always pay on time and I have the proof," Taylor said. In December, a Housing Court judge agreed and dismissed Pinnacle's complaint.
Weiner blames the mixup on poor records he inherited from the previous landlord. "Not all of Singer's stuff was accurate," Weiner said.
Taylor recalled that when he went to Housing Court, "practically everyone there was being sued by Pinnacle."
The day after Taylor's victory, Pinnacle lawyers started another eviction action against him, this time claiming he was not the apartment's legal tenant.
I asked Weiner about that second action. "I don't mind giving Taylor the right to stay there," he said. "That's a problem I'm trying to solve."
A few hours after that conversation, a Pinnacle lawyer called Taylor to tell him the company was dropping its eight-month campaign to oust him.
Then there's Elsevyf-Conrad. She's a supervisor at a city agency who has lived in the same apartment on Riverside Drive in Washington Heights for 25 years. Pinnacle claimed in court she really lives in the Bronx.
"I pay my mom's gas and electricity bills in the Bronx to help her out and my name is on the bills," she said. "I've given them my tax papers and all my documents and they still aren't satisfied."
Weiner said the building's super told Pinnacle she had moved to the Bronx. "If she actually lives there, it's fine," Weiner said, adding that he is now willing to let Elsevyf-Conrad stay.
These three people are lucky. But for the many still being sued by Pinnacle, the nightmare continues.

Their Landlord From Hell

2006-06-03T22:20:00.000-04:00

By Juan Gonzalez
New York Daily News
Originally published May 12, 2006

Brooklyn residents Lois Simmons-Wallace (l.) and Audrey Smith have received eviction threats from Pinnacle.

Five months ago, Angela Diaz walked into her apartment at 845 Riverside Drive and was shocked to discover four big screws sticking out of her bedroom wall.
A repairman for Pinnacle LLC, her landlord, had been next door installing a new bathroom cabinet for her neighbor. He did such a great job that the screws he used to fasten the cabinet passed right into Diaz's apartment.
"I complained the same day to the super and he just laughed," Diaz said. "It's been five months now, and they still haven't fixed my wall."
Then there's the softball-sized hole in the wall of Diaz's hallway closet. Pinnacle workers recently punctured the wall while running wires for a new intercom system. The workers then left without plastering the gap, and now rats have rushed through it into the apartment.
"It's like they're trying to force us all to leave," said Diaz, 54, who has lived in the same apartment for 28 years. She and a half-dozen other tenants say that after Pinnacle took over the Washington Heights building in October 2004, there was no heat or hot water for most of that winter.
These are among scores of horror stories that rent-regulated Pinnacle tenants all over the city have told the Daily News in recent weeks.
Tenants say they have to wait months for the company to fix major violations in their apartments - even after a Housing Court judge orders the work. And when Pinnacle work crews finally arrive, they often bungle the repairs or do slipshod work, the tenants charge.
Dorothy Hall, 68, is one of some 250 tenants at the Dunbar Apartments in Harlem to get a Housing Court eviction notice from Pinnacle since the company purchased the 540-unit complex last August.
In her case, she deliberately withheld her rent to force the company to make repairs to her apartment.
In a court stipulation reached earlier this year, Hall agreed to pay her back rent and the company agreed to complete repairs in early March.
It's now May, and the work is still not finished.
"Their workers brought me two sink cabinets with no drawers," Hall said. "My home has been upset and uprooted for two months, everything's off the walls and they haven't even called to say when they're gonna finish."
At 146 E. 19th St. in Brooklyn, a six-story tenement Pinnacle purchased in January 2005, resident Thomas Rudy says "everything went down the drain when they took over."
Rudy, a Vietnam veteran with two Purple Hearts and a veterans' counselor for the state Labor Department, has a long litany of complaints.
"They stopped cleaning the building," he said. "The incinerators are all nailed up, there's never hot water until 8 [a.m.] ... and they're not fixing anything. The only way I get their attention is by withholding rent."
Records from the City's Department of Housing and Preservation show there are 109 unresolved violations in the 41-unit building, including 91 that are classified as hazardous or immediately hazardous.
In Rudy's apartment, work crews recently installed a new bathroom sink.
"After they left, I happened to brush against it and the sink fell down," Rudy said. "They'd forgotten to fasten it to the wall."
In his kitchen there's no metal plate on one of his electrical sockets, and he has waited weeks for Pinnacle to supply one.
Over in Crown Heights, Lois Simmons-Wallace, 78, has lived in the same large rent-controlled apartment at 457 Schenectady Ave. for 40 years.
As soon as Pinnacle purchased the building in January 2005, it sued to evict her in Housing Court, claiming she owed four months back rent.
"I always pay rent on time, and I have a copy of every rent receipt since I moved in," she said.
After several trips to court, Simmons-Wallace produced her proof, and the case was dismissed.
But she has fought for months to get repairs to her apartment, including a new paint job - the last one was 15 years ago.
HPD records show 89 open housing code violations in the 94-unit building.
Last summer, part of a bedroom ceiling collapsed from a major leak. Simmons-Wallace sued Pinnacle in small claims court for damages to her rugs and furniture. In October, the court entered a default judgment against Pinnacle for $1,600.
"We do not have any knowledge of the small claims action," said Robert Barletta, a spokesman for Pinnacle when asked about Simmons-Wallace.
As for the chorus of complaints, Barletta said Pinnacle chief Joel Wiener commissioned an independent survey last week showing "an overwhelming majority of tenants are satisfied with their apartments."
Despite that survey, four community boards in northern Manhattan are convening an unusual joint public meeting Monday at 6:30 p.m. at Riverbank State Park at W. 145th St. and Riverside Drive.
"There is definitely something going on," said Jordi Reyes Montblanc, chairman of Community Board 9. "We don't know what, and that's why we're collecting information."

http://www.nydailynews.com/news/story/416948p-352271c.html

Full Court Press - Pinnacle Sues Hundreds Of Bronx Tenants

2006-04-23T01:14:00.001-04:00

Full Court Press - Pinnacle Sues Hundreds Of Bronx Tenants
By HEATHER HADDON

A controversial management company has taken hundreds of tenants to housing court at an extraordinary pace since purchasing dozens of Bronx buildings last year, according to court records.

The Pinnacle Group has initiated over 1,509 cases against Bronx residents in 31 buildings since early last year, with many of the lawsuits filed just weeks after the company purchased the properties. Bronx housing court records are kept on an outdated computer that is difficult to navigate, but two searches by the Norwood News found that the vast majority of cases are unique actions against individual tenants. The properties included 1,929 units, meaning that Pinnacle has sued as many as three-quarters of these tenants.“It’s very suspicious,” said Louise Seeley, director of the City-Wide Task Force on Housing Court, a city advocacy group. The majority of cases are for back rents ranging from several hundred dollars to $3,000. Residents paid up in some incidences, but other cases were dismissed or never resolved.“Either there are lots of really bad tenants, or the landlord is really aggressive and wants to get people out,” said Joe Lamport, another Task Force staffer.Tenants insist it’s the latter.

The company, which is run by investor Joel Wiener, has scooped up hundreds of buildings in low-income areas citywide. Many of the deals were financed by Praedium Group, a real estate investment fund whose goal is to capitalize on properties through “strategic capital improvements and proactive leasing,” according to the company’s Web site. Pinnacle makes certain infrastructure improvements on the buildings after purchasing them, and Wiener says they are working to bring back neglected properties. But tenants charge they are being slapped with fabricated fees and trumped-up Major Capital Improvement costs to increase the rent rolls and drive them out. Tenants in Bronx and Manhattan Pinnacle buildings report these trends, as the Norwood News has documented in three previous articles. Taking tenants to court is expensive — costing anywhere from a couple of hundred to thousands of dollars a case — but the volume of litigation suggests that Pinnacle is making the investment in hopes of future return. Serving court papers can be a way for landlords to usher out tenants, legal advocates say.“A lot of people get scared and simply leave their apartments,” Lamport said. That’s exactly Wiener’s goal, according to a person close to the situation. “He did not care about the legal fees,” said the source, who asked for anonymity for fear of retribution. “His thought was ‘If I fish enough, I’ll get enough people out. In the long run, my rent roll will go up.’”

Residents of Botanical Square, one of the eight local buildings purchased by Pinnacle, haven’t fled yet, according to Elio Pichardo, a tenant. But threatening letters about nonpayments have been taped on many people’s doors, according to a resident who didn’t want her name used. Over at 66 St. Nicholas Pl., which is part of a Harlem Pinnacle package bought in the fall, a resident said that dispossess notices were served to a third of the units. Tenants also received threatening letters about removing their door mats and satellite dishes.“Everything is do it immediately, or else,” said the tenant, who asked for anonymity.Pinnacle has also gone after tenants in the Dunbar Apartments, a large Harlem complex. Residents and a staffer for Council Member Bill Perkins brought up the issue with management during a meeting last month, according to a tenant newsletter. Wiener denied he is pushing out tenants. “We’re trying to have a stable tenancy in each building,” he said in an interview last month.In addition to back rent, records show that Pinnacle has disputed tenants’ residency rights in court. Some of these cases pertain to tenants housed through social services programs, like homelessness prevention. Wiener said that he is in negotiations with the sponsoring agencies, but does not support the practice. “We don’t want to make the building into a Motel 8,” he said.The company is also very aggressive about suing residents who it claims are living in their apartments without a proper lease, even in incidences when there is a familial connection to the unit. “Their succession rights were violated,” said Hazel Miura, a housing specialist working with Bronx Pinnacle tenants.Other cases seem to have even less merit. Tenants report that the company is contesting rightful residency for technicalities like rent checks with married surnames instead of a maiden one. “They are saying that I’m not the person who owns the apartment,” said Debbie Brown, a resident of 700 Riverside Dr., a Pinnacle building, for the past 40 years. Brown says she made two court trips to prove her identity. “Other tenants have had to do the same. They like to harass people,” she said.Seeley said that taking people to court over name discrepancies was “the most bogus claim I’ve ever heard.”

Building staff turnover
Landlords often rely on building staff to assess which tenants aren’t leaseholders or owe rent. But Pinnacle is wiping that history clean by terminating the previous staff —who could potentially vouch for legitimate tenants — and hiring new people.Wiener bought seven former Mitchell-Lamas in the Bronx in 2002, and promptly fired the buildings’ staff and evicted them, according to a Daily News story. The source familiar with Pinnacle’s practices said the workers were aggressively forced out. “He told everyone they have half an hour to get out … and changed all the locks,” he said. “His intent was to put his own people in there.” The move was so egregious that the city passed a law barring new landlords from firing exiting staff within 90 days. Some in the real estate industry refer to it as the “Wiener Law.”But Pinnacle appears to be flouting the new law. Gladys Criswell has been the superintendent of 87 Ellwood St. in Inwood for the past 27 years. Pinnacle purchased the building in October. Within three weeks, Criswell received a letter stating she had not performed her duties satisfactorily and was terminated. “It’s very shady,” said Fred Criswell, her son. “They basically didn’t want to work with her from the beginning.”The younger Criswell said that their Pinnacle property managers never communicated with his mother about the situation. A superintendent from a neighboring Pinnacle building was tapped for maintenance and renovation work. Criswell is disputing the decision in court with assistance from her union, and is still performing her duties.Carol Abrams, a spokesperson for the city Department of Housing, Preservation and Development (HPD), said they are investigating Pinnacle’s practices. “They seem to be firing superintendents in every building and are assuming management control,” Abrams said. HPD has also filed at least three cases against Pinnacle for serious code violations. Once installed, the company superintendents perform everything from custodial duties to major renovations that require a contractor’s license. “They do electrical work, plumbing work,” said Kim Powell, a resident of a Pinnacle building on 706 Riverside Dr. “They set up a whole laundry room without a permit. It’s substandard work.”Ernestine Temple, who lives in the same building, said their efforts were shoddy and potentially dangerous. “They ran new pipes in five apartments without treating the asbestos in the walls,” said Temple, who alleges that tenants were never told why the work was necessary.The source called the company’s tactics an “atrocity.”“I never saw a [licensed] contractor there,” he said. “This makes a mockery of the system.”

http://www.bronxmall.com/norwoodnews/past/122905/news/N51229page1.html

Harlem tenants and Assemblyman Wright rally downtown to end real estate giant’s “predatory practices

2006-04-23T01:07:00.000-04:00

Pinnacle Tenants Take Protest to Landlord’s Offices

By JAMES FERGUSSON

Harlem residents, elected officials and community leaders converged last week on the midtown offices of the controversial Pinnacle Group to denounce the company’s practices. The rally, held outside a plush 57-floor skyscraper near Penn Station, drew a few dozen protesters denouncing the rent hikes and harassment that they contend is Pinnacle’s hallmark. Pinnacle has scooped up hundreds of apartment buildings across the city, including dozens in the Bronx. The Norwood News has written seven previous articles on the plight of tenants after their properties were purchased by the company, including scores of lawsuits, threatening letters, harassment and inflated improvement costs. As Pinnacle employees looked on, protesters railed against them. “Pinnacle is trying to take our people from apartments that they have been in for 40 or 50 years,” said Luis Tejada of the Mirabal Sisters Cultural and Community Center, a Harlem organization that organized the rally. “Is this abuse?” he asked. “Yes!” the protesters responded.Residents began organizing against Pinnacle in the winter, and elected officials are starting to respond. “They are making a concerted effort to destabilize our neighborhoods,” said Assemblyman Keith Wright, a Harlem representative during the rally. “This must stop.” Wright claimed that a Pinnacle employee tried to indirectly pressure him to skip the protest. He rebuked the company for “picking on” tenants. Other speakers, including former Councilman Bill Perkins, said the situation has wider implications. “If they are successful, it will open the door for multiple assaults,” he said, referring to other landlords who might move to low-income neighborhoods to buy properties and raise rents. “It’s very important that this example isn’t replicated.”Advocates appealed to city officials to better police the practices of management companies. “You’ve got to do your job,” said Nellie Bailey, director of the Harlem Tenants Council.Pinnacle’s public relations firm, the Marino Organization, dismissed the protesers’ allegations. “It is unfortunate that there are a number of baseless and simply erroneous charges circulating among tenants, public officials and within the community,” said the group in a statement. “We have offered to meet with today’s protest leaders on numerous occasions to discuss any issues they may have, but it seems they are motivated more by their own selfish agenda than finding out the truth.”

http://www.bronxmall.com/norwoodnews/past/032306/news/N60323page1.html

WELCOME TO B.R.U.S.H.

2006-04-23T00:45:00.000-04:00

Welcome to B.R.U.S.H