Tenants Hope Mo Can Hit Home Run, Salvage 14 Rundown Buildings

THESE BRONX tenements are ownerless no Mo.  A year after Omni New York bought the mortgage debt on 14 dilapidated apartment buildings dumped by Ocelot Capital, former New York Mets ballplayer and Omni co-founder Mo Vaughn is now a Bronx landlord.

Omni bought the foreclosed buildings at auction last week for roughly $6 million and promised to salvage the borough’s most infamous real estate portfolio. 

The sale means hope for hundreds of tenants who have suffered “Third World” conditions — from collapsed floors to rats and mold, said Omni co-founder Eugene Schneur.

“We’ve been through a lot. We went through hell years,” said Carmen Rodriguez, a tenant at 623 Manida St. who attended the auction. “I’m ecstatic Omni was able to buy the building.”

As debtholder, Omni put up $1 million for emergency repairs, said Schneur. The
buildings had more than 8,500 code violations.

Now the firm, a proven slum fixer, has the power to bankroll a $35 million gut overhaul, to launch this fall.

“For tenants, the faster we start rehab the better,” said Schneur.

Ocelot Capital, a equity firm with Israeli investors, gobbled up Bronx tenements at the peak of the real estate boom. When the market tanked in 2008, so did Ocelot, unable to meet looming mortgage payments.

Neglected by Ocelot, the buildings broke down. Last year, developer Sam Suzuki’s bid for the portfolio fell through, but he snapped up six of the tenements.

Only when several tenant groups rebelled did Sen. Chuck Schumer and Rep. Jose Serrano intervene. They persuaded Fannie Mae to sell Ocelot’s debt to Omni at a discount rather than to the highest bidder, who tenant advocates feared would flip the buildings to another speculator.

Serrano applauded last week’s foreclosure purchase, and expects Omni to “really turn these buildings around.”

Some real estate watchers blasted the fire sale as a sweetheart deal and blamed the Urban Homesteading Assistance Board, which organized the tenants and backed Omni.

But Schneur scoffed at the idea, noting that the tenements are among the city’s most distressed. Suzuki took a chance on them, failed to complete repairs and was jailed last month for contempt of court.

“These are challenging buildings,” said Schneur. “Without a rehab program in place, we wouldn’t want them for free.”

That program — financed by city bonds and federal tax breaks, sets Omni apart. The bonds and breaks require Omni to keep the tenements for 15 years.

“Omni has a good track record,” said UHAB Policy Director Dina Levy.

by Daniel Beekman

Published Date: 
Tue, 2010-07-20 (All day)
Publication: 
NY Daily News