By Gabriela Resto-Montero
DNAinfo Reporter/Producer
MANHATTAN — The financial failure of British firm Dawnay Day Group in December left 47 apartment buildings in East Harlem and Central Harlem in foreclosure and the fate of its long-term residents in limbo.
Now, a group of non-profits have banded together to try to purchase the firm's portfolio of 1,100 units in order to keep housing in the area affordable.
"We're not here to make money," said Walter Roberts, executive director of Hope Community Inc., a non-profit leading the effort to buy the property.
"We're there to make sure there's affordable housing," he said.
In order for the non-profits to afford the estimated $185 million cost of the properties, the holding company on the mortgage, Centerline Servicing, would have to negotiate a deal rather than put the portfolio up for auction, Roberts said.
Centerline Servicing had no comment on ongoing negotiations, a spokeswoman said.
A partnership of non-profits is now working together to attract private lenders for the venture, Roberts said. In a negotiating phase, the group could then obtain public financing, he said.
Hope Community Inc. manages 1,300 affordable housing units in East Harlem, many next to the Dawnay Day holdings, a fact Roberts hopes will make tenants support their bid.
"We have a tremendous reputation and to the tenants we're a much better option," he said.
Dawnay Day Group purchased the buildings in East Harlem for $235 million in 2007 from Steven Kessner, a controversial landlord in East Harlem, the New York Times reported.
The company hoped to duplicate its success in gentrifying London neighborhoods and phase out low-income residents in the East Harlem properties, according to the Times.
Shortly after the acquisition, Dawnay Day became overleveraged from all of its international investments, including the now shuttered German department store, Hertie, according to BBC News.
"Once the landlord found out they weren't going to get any income, they walked away from their investment," sasid Alvin Johnson, chair of the Community Board 11 Housing Committee.
The company's departure left long-term residents living in squalid conditions with no one to hold accountable for the conditions, Johnson said.
"These properties have been left in despair," he said. "There are not mice running around on these properties, there are rats. These tenants are living a hellish existence right now."
Community Voices Heard, an advocacy group for low-income residents, began the effort to bring together non-profit groups after a City Council meeting discussing the effect of the foreclosure crisis on communities.
Although the plan quickly received support from elected officials, the non-profits are in new territory in dealing with a private acquisition where tools typically available to them don't apply, Roberts said.
"It's early and it's all driven by when the bank wants to move forward," he said.
