Another ‘worst landlord’ nod for troubled housing group

December 17, 2019 Claudia Irizarry Aponte, THE CITY
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This story was originally published on Dec. 17 by THE CITY. 

For the second year in a row, the No. 2 spot on the public advocate’s “Worst Landlord Watchlist” has gone to leaders of a troubled Brooklyn nonprofit mired in tenant and financial woes.

Public Advocate Jumaane Williams identified Nathaniel Montgomery, Northeast Brooklyn Housing Development Corp.’s chief operating officer, as the private landlord with more serious violations than all but one other in the city.

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Montgomery is the registered contact for 22 buildings on the list run by the Bedford-Stuyvesant-based nonprofit, also known as NEBHDCo. City records show the 220 apartments in those buildings logged a total of 1,581 code violations.

In the 2018 survey, NEBHDCo earned its second-place “Worst Landlord” spot under the name of its CEO, Jeffrey Dunston, who was then the registered agent for 15 buildings on the list — containing 231 apartments with 1,345 violations among them.

Related: North Brooklyn tenants look for relief from rats, mold and lead paint

The group’s biggest offender this time around: a 53-apartment building at 378 Throop Ave. that has 278 open code violations — including for mold, a broken front door lock, a blocked fire escape, and heat and hot water problems, city records show. Two apartments were ordered vacant after a fire.

“Entities on this year’s Worst Landlords List have earned their spot by not making repairs on the most serious violations,” said Williams in a statement. “Shifting names of responsibility on record doesn’t shift what tenants deserve or what they’re owed. We’ll also be looking at entities that continue to fund bad landlords — the worst landlords should be met by the strongest regulation and oversight.”

Bankruptcy filing

As THE CITY previously reported, NEBHDCo filed for bankruptcy on a dozen of its buildings earlier this year after the city Department of Housing Preservation and Development filed for foreclosure based on the group’s failure to make mortgage payments. NEBHDCo affiliates also owed more than $4 million in unpaid tax and water bills, court records indicate.

The bankruptcy court is in the process of transferring ownership of most of those properties to new landlords, records show.

Meanwhile, tenants have filed more than $300,000 in court claims against NEBHDCo, and a contractor told THE CITY the nonprofit stiffed him on $1 million worth of work.

Last year marked the final time then-Public Advocate Letitia James compiled the watchlist. Now New York’s attorney general, James has the power to investigate NEBHDCo in her role as the state’s top overseer of charitable groups, as tenants pursue claims to demand repairs and restitution for what they say are harrowing living conditions.

James’ office declined to comment. It typically does not confirm or deny investigations.

NEBHDCo, which owns and manages about 100 apartment buildings once owned by the city, housing low-income tenants some of whom were formerly homeless, did not respond to a request for comment.

Tenants fight back

Debra King is one of 20 NEBHDCo residents who have filed claims with the federal bankruptcy court in Brooklyn, seeking financial compensation for harassment, rent overcharge, property damage and what they contend is a breach their right to live in a habitable apartment.

The tenants are seeking a total of $305,000.

Debra King shows the conditions in her apartment owned by the Northeast Brooklyn Housing Development Corporation. Photo by Ben Fractenberg/THE CITY

“This is the worst nightmare I’ve ever experienced in New York City with our apartment. They don’t care, they just don’t care,” said King, who hasn’t had heat in her Mother Gaston Boulevard apartment in 11 years.

Yesenia Medina, who lives on Park Place, seeks $20,000 tied to “personal health consequences,” her claim filed with the court indicates, including “respiratory conditions due to chronic leaks and mold conditions.” She’s also asking for reimbursement for replastering ceilings and for replacing furniture after a bedbug infestation.

Both Medina and King’s homes are in HPD’s Alternative Enforcement Program for the city’s 200 most dilapidated apartment buildings.

Office building sold

As THE CITY reported, a separate bankruptcy proceeding resulted in a NEBHDCo affiliate selling a historic office building on Throop Avenue to a luxury developer after city officials removed a deed restriction on the property.

That sale resulted in a scheduled payment of $940,000 to NEBHDCo for funds advanced to the Throop building, as well as a roughly $250,000 charitable contribution, as approved by the court.

That transaction, completed this summer, had also been approved a year ago by the state attorney general’s charities bureau, which is responsible for green-lighting sales of real estate by nonprofit organizations.

Weeks later, James took charge as attorney general, responsible for overseeing NEBHDCo and other charitable organizations.

As approved by the court in May 2019, the deal lets Brooklyn Legal Services Corp. A, a provider of counsel for low income clients, exit its longtime office in the building in exchange for $400,000  — an arrangement that court records indicate was not reported to the attorney general.

Filings with James’ office show that Dunston received compensation of up to $400,000 a year even as tenants contended with heat outages, mold and other miseries. Its most recent filing shows Dunston received $298,000 in compensation for 2018.

Those filings also indicate a decline in annual revenue for NEBHDCo, to $3.4 million, down from $4.2 million in 2017. Even after suing the city earlier this year to stop the foreclosures, NEBHDCo received $232,000 in aid from the City Council in its latest budget.

“The Northeast Brooklyn Housing Development Corporation has deep roots in the community, and has served my constituents through its food pantry and food justice services for many years,” Councilmember Robert Cornegy said in a statement following an October story from THE CITY, justifying his $20,000 in annual support.

Contractor cries foul

One contractor claims he’s owed over $1.1 million for work performed on the Throop Avenue office building, which NEBHDCo acquired from the state with the intention of turning it into its headquarters.

Ziad Garraway, CEO of Canarsie-Based Falcon Power Installers, claims he was hired to oversee the installation and repair of boilers at 601-619 Throop Ave. Between October 2015 and December 2017, Falcon Power Installers completed dozens of jobs at the site but is still owed $1,113,778.52, according to a vendor ledger provided by Garraway.

Among the allegedly unpaid work: an $856,500 invoice from Sept. 16, 2017, labeled “plumbing boiler.”

“I hope we get relief from the mental anguish and the embarrassment. I don’t bring people to my apartment anymore,” added King, who seeks $15,000 in compensation. “They need to be held accountable and for people to know them for what they are and who they are: slumlords.”

Voras Enterprise, the NEBHDCo subsidiary that owned 601-619 Throop, included Falcon Power Installers among its many creditors submitted to the bankruptcy court — listing a mere $76,000 owed to the firm from 2015, court records indicate.

Garraway said that money was just a fraction of what he’s due. The contractor asserted that Montgomery discouraged him from filing a proof of claim in federal bankruptcy court, pledging to pay him back “after everything settle[d].”

“That was his first promise to me, on the first day I met him, that was the conversation I had with him,” Garraway said of Montgomery.

Garraway, an electrician who said he does not have a license, at one point was doing work on most of NEBHDco’s buildings, he said. He added has yet to receive payment for the 2017 charges. Montgomery did not respond to THE CITY’s request for comment.

Judge Nancy Hershey Lord closed the bankruptcy case last month without the court receiving a claim from Falcon.

The promises were so big, and the portfolio was so promising,” Garraway said. “I was just trying to build my company and actually be legitimate.”

He added: “They’re short on money and they need a lot of work done.”

This story was originally published by THE CITY, an independent, nonprofit news organization dedicated to hard-hitting reporting that serves the people of New York.

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