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Tenants in Foreclosed Building Slam Private Equity Firm for Neglecting Them

By Rachel Bryson-Brockmann | December 5, 2013 10:37am
 Tenants in two rundown apartment buildings in the South Bronx have had no one to call for repairs for months, and they are fighting back against Stabilis Capital, the private equity group that owns them.
South Bronx Tenants Fight Back
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HUNTS POINT — Tenants of two rundown South Bronx apartment buildings — who say they have grown fed up after years of dealing with leaks, rotting walls, bedbugs and mice — are going to court to wrest control of their homes from a private equity firm.

Residents of 755 Jackson Ave. and 836 Faile St. say their already poor living conditions worsened when their buildings fell into foreclosure and then into the hands of Stabilis Capital Management, a New York-based private equity firm, in 2011 and 2012.

“I got a cat just to kill the mice — they eat up my daughter's clothes,” said Angelica Rosado, who lives at 755 Jackson Ave. with her husband and 4-year-old disabled daughter and uses her stove to heat her freezing apartment. “I was living in the projects before, but it was never like this — there was always heat and hot water and no mice.”

In October, Rosado’s father fell through a landing on the stairs up to the second floor. With no reliable landlord to call, tenants were forced to jump over a large hole covered with plywood until the city came to make emergency repairs a few days later, Rosado said.

With help from the Urban Homesteading Assistance Board and Bronx Legal Services, tenants of the Jackson Avenue and Faile Street buildings plan to go to court to get their homes transferred to a more responsible developer instead of Stabilis, tenants and advocates said.

“These buildings are literally falling apart around the families who call them home,” said Ian Davie, a lawyer at Bronx Legal Services. “The tenants are standing up to Stabilis and holding them accountable for their decision to purchase the debt.”

A spokesman for Stabilis said the company plans to sell the buildings soon and denied that they were being neglected in the meantime.

“Once stabilized, the owner would naturally seek to monetize the collateral to recover on the unpaid debt of the prior owner,” said Konstantin Shishkin, the Stabilis spokesman.

Shishkin said the company has spent more than $90,000 to make repairs at 755 Jackson Ave. and hired a managing agent to oversee the building. However, tenants said they were not aware of any managing company or repairs.

Shishkin added that the company has no control over the conditions at 836 Faile St. When Stabilis bought the building's debt in 2011 from Astoria Savings Bank, a separate receiver was appointed to act as a temporary landlord. Shishkin said Stabilis has been advancing money to the receiver to operate the building, but tenants said the receiver only shows up to collect rent and does not make repairs.

Both buildings are on mayor-elect Bill De Blasio’s list of the city’s worst, which he compiled through the public advocate's office. The Faile Street building has 138 open housing violations, including bedbugs and missing smoke detectors, while the Jackson Avenue building has 213 violations, including 25 “immediately hazardous” issues, such as lack of heat and hot water, records show.

The Department of Housing Preservation and Development has spent $68,849 on emergency repairs at 755 Jackson Ave. since 2004 and $13,266 on emergency repairs on 836 Faile St., an HPD representative said. The agency has also fined Stabilis $7,500 in connection with problems at 755 Jackson Ave., HPD said.

The tenants of 755 Jackson Ave. are planning to bring Stabilis to Housing Court to file a 7A action, which appoints an administrator to oversee a building that's been effectively abandoned by its owner. Banana Kelly Community Improvement Association, a nonprofit housing developer in the South Bronx, has agreed to act as administrator.

The path forward for 836 Faile St. is less clear, but Davie at Bronx Legal Services hopes to intervene in the two-year-old foreclosure case in Bronx Supreme Court. His goal is to force Stabilis to cover the cost of repairs and pressure the company to sell the mortgage.

“We’re not going to let Stabilis keep doing what it’s doing,” said Elise Goldin, a community organizer at the Urban Homesteading Assistance Board who is helping the tenants. “We need to stop this cycle and fix this building for the long term."