Spencer Street Condo Saga Drags On
This week City Limits checks in on the unfortunate drama surrounding the Spencer Street Condos in Bed-Stuy. As will come as no surprise to anyone who’s been tracking the story since the early days of the Brooklyn real estate boom, there are no happy endings in sight. To refresh: In 2005, residents who’d bought their…
This week City Limits checks in on the unfortunate drama surrounding the Spencer Street Condos in Bed-Stuy. As will come as no surprise to anyone who’s been tracking the story since the early days of the Brooklyn real estate boom, there are no happy endings in sight. To refresh: In 2005, residents who’d bought their condos at 201 Spencer Street the year before from developer Mendel Brach (he of Finger Building fame shame) found out after closing that the building had been illegally overbuilt by four stories by exploiting a “community facility” provision in the code that allowed developers to build extra square footage for educational and religious purposes; in this case, Brach claimed he was going to house teachers from a nearby yeshiva. Department of Buildings failed to catch Brach’s maneuver at the time, approving the building for occupancy just long enough for the unsuspecting condo buyers to close on their units. They’ve all been trapped, unable to sell, for five years.
Residents are trying to negotiate with Brach to gain air rights from neighboring properties, a move that would bring the Spencer Street buildings into compliance, but Brach will only negotiate if residents let him off the hook for $10,900,000 in damages he owes them from a 2009 lawsuit. In the meantime, he’s chipping away at his debts a little bit at a time: $280 a month of Brach’s wages at his bakery job are garnished to pay condo owners. That comes out to a whopping $3.88 per unit. Despite having had a hand in creating the situation, the DOB isn’t being too sympathetic with residents now: they could allow special variance or rezoning to bring the buildings into compliance with zoning regulations, but haven’t for fear of sending the wrong message; nor has the state filed any criminal actions against Brach. “When you deal with these city agencies, I’m learning, logic goes out the friggin’ window,” said one of the unlucky condo owners. “They make the rules. They make no sense to anybody else and they can change the rules when they want.”
Saga of The Worthless Condo [City Limits Magazine]
Banned Devloper Pays Settlement from Bakery Wages [Curbed]
Subpoena for Fraudulent Spencer St Developer [Brownstoner]
A Big F-in Mess on Spencer Street [Brownstoner] GMAP
Lock Him Up and Throw Away the Key [Brownstoner]
The Bottom Line on Developer Abuses [Brownstoner]
Photo by Marc Fader.
Two words: Professional Certification
And why Radusky lost his…and his partnering engineering firm has lost its right to do business in NYC.
They all ought to be handcuffed and run outta Dodge. But wait, they’d screw up the next place they crawled to.
Sickening.
I agree with the self education, but it is the job of the buyer’s broker to harrass selling brokers, if necessary, to get you in to see their listings. If the selling broker and the buyer’s broker are both REBNY members they must show it to you regardless (except for new development, which is how The Developers Group was able to screw all of these people so easily). And I have always warned people against buying new development – wait a year or two, when the kinks have been worked out (or not, as in this case), and buy a resale.
And where were the lawyers and engineers at 95 Spencer? According to owners I know there (who I met long after they’d bought, BTW) they were told which ones to use by (surprise, surprise) The Developers Group.
Babs,
I am well aware that the seller’s broker is not on your side. I also think people need to get a good lawyer – because an experienced real estate lawyer can help you think about questions to ask, etc. I wonder if the buyers waived an inspection (which many people – including brokers – told people to do for new construction in that era – insanity in my view, but it happened a lot). I wonder where the lawyers and engineers of the buyers were in the Spencer debacle.
I think a book is still needed because well, there are not a lot of buyer’s brokers in NY, and in the height of the boom, most brokers were acting as seller’s brokers and were NOT interested in people buying smaller and cheaper apartments. I bought a 1 BR in that era and had the worst time getting seller’s brokers to return my calls to show me their own listings. Which left sketchy outfits like the Developers Group who did return the calls of small-time buyers. (I’m sure someone is going to respond that the DG is not sketchy, but it seemed to me at the time that they marketed a lot of cheaply built but fancy looking buildings in transitional areas at prices that were too high).
And – nothing can replace educating oneself.
Am I missing something? Isn’t your consumer protection the lawyer you hired to review the offering plan? Wasn’t that lawyer supposed to notice that there was some weird discrepancy between the terms variance and the actual practice?
I completely disagree that they’re entitled to a variance just because they got conned. It sucks that they’re holding the bag here, but I don’t think the building codes have a sympathy out.
“…during the time between the building’s construction and the decision to revoke its certificate of occupancy, city inspectors approved a temporary certificate of occupancy three times, just long enough for the sales to be completed and the residents to move in. Those building inspectors apparently did not realize the apartments were not going to faculty members, even though an anonymous complaint was filed with the DOB two months before Monestime closed her purchase, warning that the buildings “were filed as faculty residences but are being sold as apartments.” There you have it. Rubber stamp this thing and let every one get back to living their lives.
Henry Radusky and Bricolage Designs tried this same faculty housing trick for 406 15th Street in the South Slope. DoB originally permitted a 9 story dormitory building for a Yeshiva, then after neighbors met with local politicians and the Buildings commissioner, the DoB said they had errored and with drew the developer’s approved application. What’s even crazier is that the developer resubmitted the same plans a few months later with a different address and got the new application re-approved.
Seems like everyone in the building should get together and start their own Yeshiva.
Oh, and the only message the DOB would be sending by granting the variance here is “We recognized that we f*cked up too and we are therefore willing to take a big girl pill and not push the consequences of our f*ck up on innocent buyers.”
For the DOB to have had a hand in creating this debacle and then turn around and say they won’t give a variance for the height for fear of sending the wrong message is, in a word, f*cked. Sorry, but that is the best word for this situation. It’s high time they started taking responsibility for their own shortcomings and feeling some of the pain they’ve caused countless others. This is not to say that the developer/builder should be let off the hook: give the variance and then fine the developer/builder out the wazoo and collect by snatching up any and everything they own.
Wow–I am shocked that there is no consumer protection in this case. These people are getting the worst deal that I can think of in the whole of the real estate boom/crash. Trust the DOB to be a big part of the problem and then obstruct any successful outcome. In this case it would appear that they should give special variance to this building despite the unfortunate message it would send.
MGLT – that’s what real estate brokers are for and why you should always have your own as buyer. Remember: the seller’s broker is NOT on your side! A good buyer’s broker will do/provide all the things you mention and more.