City Plans to Push Repairs for Set of Bronx Buildings

The city will begin aggressively cataloging violations in ten decrepit Bronx buildings, make emergency repairs and issue liens if not repaid, officials said on Thursday, in the hopes of forcing the firm controlling the portfolio to fix the buildings and usher them into responsible new ownership.

The buildings went into foreclosure last year after their previous owner, Milbank Real Estate, defaulted on its $35 million mortgage; a price that housing advocates said could never be supported by the rent rolls. LNR, the Florida-based “special servicer,” is now in charge of the troubled loan. In the months since the foreclosure, problems at the building mounted, including bathtubs falling through floors, collapsed ceilings and gushing water leaks. According to the city’s Department of Housing Preservation and Development, the buildings currently have 3,700 code violations – a number expected to rise – 80 percent of which it deemed “hazardous” or “immediately hazardous.”

Rafael E. Cestero, the department’s commissioner, toured three of the Milbank buildings with inspectors on Monday night, during which time 173 new violations were issued. “I have never been more shocked, angered and frustrated by the conditions that I saw in those three buildings,” Mr. Cestero said in a conference call on Thursday.

The department will do a room-by-room “roof to cellar” inspection of the each of the ten building, Mr. Cestero said and issue liens against the buildings if LNR does not repay the emergency repair costs. The city wants LNR to lower its sale price to ensure that the buildings fall into responsible hands and is made more livable for its tenants.

The travails of the Milbank buildings were seen as emblematic of the perils of the overheated real estate market. Its buyers hoped to replace poor tenants with richer ones, and then walked away when the real estate market crashed. Housing advocates and city officials fear the buildings might end up again in speculators’ hands. Meanwhile, the the magnitude of disrepair grows. A study done for city council speaker Christine Quinn found that the buildings needed $17 million to $26.6 million of repairs.

“LNR have completely, in my opinion, stepped away from any responsibility to keep the buildings livable,” Ms. Quinn said.

An advocacy group, Legal Services-NYC Bronx, successfully petitioned a Bronx Supreme Court judge to order LNR to put $2.5 million toward repairs within 30 days. The order was made on Sept. 29, and advocates say the repairs have not been made.

LNR did not immediately respond to requests for a comment.

Dina Levy, of the Urban Homesteading Assistance Board, said that by her organization’s calculations, the buildings could be worth roughly $22 million but only if in excellent physical condition.

by Cara Buckley

Document: 

102810_NY_Times_City_Plans_to_Push_Repairs.pdf