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Inside Kushner’s Murky Relationship with Rent Stabilization

The Real Deal

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Jared Kushner’s habit of not properly filling out paperwork began years before his tenure at the White House.

In exchange for receiving a lucrative tax break on a rental building in Williamsburg, Kushner’s real estate firm was legally required to register the apartments as rent stabilized with a state agency. It did the first year. But the next year, it registered just five apartments. Then it failed to register any of the units.

That caught the attention of the state’s Homes and Community Renewal agency, which sent a warning letter to Kushner Companies last month. You haven’t complied with the legal requirements of the 421a tax exemption, it said, and you must register all rent-stabilized apartments at 50 North 1st Street.

The 421a program, which was recently reborn as “Affordable New York,” is supposed to incentivize residential construction by dramatically reducing a building’s property taxes. In exchange for receiving the tax break, owners are required to register all units as rent stabilized. But landlords across New York City have failed to register thousands of apartments in 421a buildings, creating a potential for abuse and illegal rent increases for tenants who may be unaware of the protections offered by stabilization laws.

Kushner‘s 50 North 1st Street is one of those buildings.

The firm bought the 46-unit Williamsburg property in 2013 from Largo Investments and Kevin Maloney’s Property Markets Group for $34 million. According to an analysis of public records by The Real Deal, Kushner registered all 46 units as rent-stabilized in 2014, as required by law. But in 2015, the firm registered just five units. As with many other properties across its vast New York City rental portfolio, Kushner did not report that any of the apartments were stabilized in 2016, according to tax records last month from the city’s Department of Finance, which derives its rent-stabilization count from what owners report to the HCR.

The 25-year tax break exempted Kushner from $1.2 million in property taxes in just the past two years.

Kushner, which Jared resigned from in January, denies that it hasn’t complied with the legal requirements of the 421a program at 50 North 1st Street. Any oversights, it says, were purely procedural.

“As is common with a change of ownership, there is often administrative clean-up and reconciliation that must occur,” Emily Wolf, Kushner’s general counsel, said in a statement. “However, paperwork aside, all 46 apartments have been and will continue to be regulated by the rent stabilization and 421-a guidelines.”

But the response leaves questions unanswered. Kushner claims that last year, it simply made a mistake when it filed the required paperwork with HCR six to seven months late. But the year prior, the company registered just five of the building’s apartments – and that was in 2015, more than a year after it bought the building.

When pressed, Kushner declined further comment and insisted the building was in compliance. The company said that filings this year will show the units’ correct status, but wouldn’t share any documents or figures with TRD, noting the records are not currently public information. This year’s filings will become public on tax records in mid 2018.

TRD dug further into Kushner’s history with rent-stabilization and obtained two rental histories from tenants at 50 North 1st Street. Rent histories list, among other details, the regulation status and legal rents of the apartment in question. One of the apartments shows no registration in 2015 and another unit reported no registration in 2015 or 2016. Since TRD contacted Kushner for this story, and less than a month after HCR sent the firm its warning letter, the former apartment was retroactively registered for 2016 with a filing date earlier this month.

It should be noted that both tenants have stabilized leases, which suggests Kushner has treated the apartments as stabilized even if the company did not properly register the units. TRD did not find any evidence that company has collected rents above the legal limit.

Kushner — whose former CEO Jared has been dogged for omitting assets on financial disclosure forms and for leaving foreign contacts off national security clearance forms — acquired a big chunk of its New York rental portfolio in 2013 when it went on a $262 million buying spree. Its acquisitions have mostly been in the East Village, but it’s also picked up buildings in other parts of Manhattan, as well as Brooklyn and Queens.

Kushner tenants in the East Village have alleged since as early as 2014 that the company, through its property management arm Westminster Management, has tried to push them out of their rent-stabilized and market-rate apartments, according to tenant organizer Brandon Kielbasa, organizing director of Cooper Square Committee. And a May investigation by the New York Times and ProPublica found that a company subsidiary — JK2 Westminster LLC — went to great lengths to extract money from largely poor tenants in Maryland, filing hundreds of lawsuits, many on questionable grounds.

The Kushner rental portfolio in New York City now includes over 1,300 units across 57 properties. Recent tax records show that Kushner reported owning 339 stabilized units in 2016, down from 601 reported across the portfolio in 2015.

Since 2012, the company has dropped a total of 253 apartments from rent stabilization, according to a TRD analysis of the tax records. The company contests this total, arguing that a majority of the losses reflect late filings from last year that caused many recent records to show zero registered units. (If the company’s claims are correct, the actual number of dropped stabilized apartments would be around 50 units.)

Rent-stabilization laws limit rent increases and offer protections to tenants living in over 1 million stabilized apartments citywide.

It’s not clear why the figures in Kushner-owned buildings declined, but experts told TRD that the state and city’s record keeping and tracking systems are less than stellar and could account for some of the discrepancies.

Each year, owners register stabilized apartments with the state’s HCR between April 1 and July 31, and the numbers reflect the building’s stabilized unit count on April 1.

The 421a tax exemption process involves multiple steps and filing requirements with HCR, as well as the city’s DOF and Department of Housing Preservation and Development (HPD). Paul Korngold, of the law firm Tuchnan Korngold, Weiss, Liebman & Gelles, said HPD is partially to blame for delays in issuing the necessary paperwork. However, “any delays at HPD should not have a bearing on the requirements to register the rents with the HCR,” he said.

When it comes to noncompliance in 421a buildings, owners are sometimes unfairly blamed, according to Korngold. “Various agencies are investigating some owners for alleged rent overcharges” even though “most owners obey the law,” he said. As a result, noncompliant owners give the rest a bad reputation, Korngold said, but added that HCR has been effective in addressing overcharge complaints from tenants.

HCR’s website explains that the agency “may impose a penalty of up to $250 upon owners for each knowing violation of the Rent Regulations,” a paltry sum for many New York City landlords, who can generate thousands of dollars from each rent overcharge. But failure to comply with 421a registration can lead to more significant penalties, according to a source familiar with the compliance process. If caught, a rule-breaker may have to pay back taxes for the years it was not in compliance. Generally speaking, the city tries to work with owners who have failed to register units and ultimately reduce penalties, the source said.

Following a series of reports by ProPublica that called out landlords who had improperly boosted rents in 421a building, state and city lawmakers have given the issue increased attention. In December, Mayor Bill de Blasio announced that the city was sending noncompliance letters to landlords owning more than 37,000 apartments regulated in 421a buildings, threatening to suspend their tax benefits.

The 421a program, which cost the city an estimated $1.4 billion in forgone tax revenue in FY 2017, has been the subject of state lobbying efforts by the real estate industry for decades. Through what’s known as the “LLC loophole,” developers can donate through the limited liability companies that legally own each of their buildings and obscure their role in the process.

A joint investigation by TRD and ProPublica found that 421a developers donated $21 million to state candidates and committeessince 2000, roughly a quarter of all donations from the industry during this time. Gov. Andrew Cuomo received the most donations — $4.2 million over the course of his runs for governor and attorney general.

Considered the bible of New York City real estate, The Real Deal has become mandatory reading for everyone in the industry. Since 2003, TRD has provided up-to-the-minute industry news and in-depth reports and profiles in our 65,000-circulation monthly magazine and on TheRealDeal.com, which receives more than 1 million unique visitors per month. Our content is available across multiple platforms, including a mobile app available to iPhone, iPad and Android users alike.

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Trump Admits He Killed Soleimani Because of Impeachment

Polipace Staff

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Not that it comes as a surprise, but Donald Trump is admitting to his comrades that he killed Iranian General Soleimani because he felt pressure from GOP colleagues that would decide his impeachment trial.

The administration has made a slapdash case for why it chose to assassinate Soleimani, but the main arguments have been that he was planning to attack Americans within days, and that the US would always respond forcefully after US citizens were killed. In December, an Iranian-backed militia killed an American contractor in Iraq.

But the Wall Street Journal on Thursday night included an eye-popping tidbit in its story about how Trump came to green-light the Soleimani operation: “Mr. Trump, after the strike, told associates he was under pressure to deal with Gen. Soleimani from GOP senators he views as important supporters in his coming impeachment trial in the Senate, associates said.”

In a lengthy piece detailing how the president’s top advisers coalesced behind the strike on Iranian Maj. Gen. Qassem Soleimani, the Journal noted that Trump said he felt “under pressure” to satisfy senators who were pushing for stronger US action against Soleimani and who will run defense for him on impeachment.

One of Trump’s most outspoken supporters, GOP Sen. Lindsey Graham was reportedly the only congressional lawmaker Trump briefed about his plan to assassinate Soleimani in the days leading up to the strike. 

In other words, the president felt the need to shore up support from some unnamed Republican lawmakers ahead of his imminent Senate impeachment trial.

It’s important to note that the above passage is just a short paragraph in a much longer piece about the inner workings of the Trump administration’s Soleimani discussions. And so far there is no other evidence to suggest that Trump didn’t give the order mainly to deter Iran from threatening Americans, although it’s unclear just how “imminent” that threat truly was.

But if Trump did consider impeachment when opting to kill the Iranian general — even if for a moment — then this is quite the scandal. It would mean the president didn’t just have the interests of the nation or the world in mind when bringing the US and Iran to the brink of war, but also his own personal political interests.

More reporting is needed to see just how much impeachment weighed on Trump’s mind when he gave the order. At a minimum, though, the Wall Street Journal’s reporting calls into question the legality of Trump’s Soleimani strike and the true intention behind it. And at worst, Trump’s decision to kill a foreign leader — as much as he may have deserved his fate — partly for political gain, is arguably impeachable on its own.

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What Drugs Are Donald Trump Taking and How Do They Affect Him?

Polipace Staff

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New questions about Trump’s mental and physical health have been coming up lately in the mainstream news. Donald Trump isn’t known for having the healthiest eating habits. While we might not know everything about his health, his physician Dr. Harold N. Bornstein has revealed enough to guess how healthy the president might — or might not — really be.

From heart attack prevention pills to hair growth meds, these are the drugs Trump depends on daily — and what they might tell us about his health.

The problem with these drugs is that three of them have serious side effects on the brain: including creating confusion, memory loss and even issues with rage and anger.

1. Rosuvastatin for high cholesterol
As its name implies, the drug Rosuvastatin belongs to a specific class of medications called statins, which lower total and LDL blood cholesterol. It’s likely Trump takes this medication to reduce his cholesterol and prevent possible complications that might result from living with high cholesterol levels in his blood because of his addiction to fast food, including eating McDonalds almost daily. Side effects may include constipation, headache, nausea, stomach pain, weakness, Selenium and Coenzyme Q deficiency and muscle aches and pains. Other side effects may include memory loss or confusion, kidney or liver problems or very rarely a deadly breakdown of muscle.

2. An antibiotic for rosacea
Rosacea is a chronic inflammatory disorder. Some antibiotics (including tetracyclines) have both anti-inflammatory and antibiotic capacities. Low doses are normally used to provide more of an anti-inflammatory effect than an antibiotic (antibacterial) effect. Maximum anti-inflammatory effects appear to be achieved with doxycycline 40 mg capsules once daily. Tetracyclines (doxycycline and minocycline) have been the mainstay of treatment since the 1950s. Side effects of antibiotics may include vomiting, nausea, diarrhea, bloating and indigestion, abdominal pain and loss of appetite. Some antibiotics may cause dysfunction in the kidney and result in mineral imbalances. It may be necessary to monitor mineral levels if antibiotic therapy is prescribed long term.

3. Aspirin
Aspirin (81 mg) is widely used to reduce heart attack risk. But how does it work? Simply, aspirin interferes with the body’s blood-clotting action. It reduces the clumping action of platelets (blood-clotting cells), thus preventing a heart attack. Aspirin may cause minor side effects. Side effects may include acid or sour stomach, anxiety, belching, dizziness, dry mouth, hyperventilation, irritability, shaking, stomach discomfort, trouble sleeping, unusual drowsiness, tiredness, weakness or feeling sluggish.

4. Propecia is used for the treatment of male pattern hair loss. The condition is characterized by thinning of the hair on the scalp, which results in a receding hairline and/or balding on top of the head. The medication prevents the conversion of testosterone to dihydrotestosterone (DHT) in the body. DHT may be responsible for the shrinking of the hair follicle and may inhibit a hormone called IGF-1 that helps with hair growth.

Side effects of Propecia may include hives, difficulty breathing, swelling of the face, lips, tongue or throat. The drug may also cause breast lumps, pain, nipple discharge and other breast changes, which may be signs of male breast cancer. Other side effects may include depression, impotence, loss of interest in sex, trouble having an orgasm, abnormal ejaculation, syncope, dizziness, weakness and headache.

Should note that he used to, and may still, be taking amphetamines, according to this report.

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Are Stimulant Drugs Messing Up Trump’s Mind and Speech? Doctor Claims He’s on Drugs

Polipace Staff

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I got a weird phone call after the Trump speech ended announcing the US Embasy Moving to Jerusalem, from a Psychiatrist in New York, who claimed that Donald Trump was taking Adderall and other psycho-stimulants. He didn’t want to have his name used, but he checked out as a Psychiatrist who had been working in Manhattan for over 20 years. He  said that Trump had been taking all types of stimulants for years and it was one of the reasons that Trump was, according to him, suffering from Dementia, as it causes permanent brain damage.

He also claims this is why Trump slurred, “God Blesshh the United Shtakes” in his speech.

Well, according to the doctor, he was a “friend of” one of the Doctors who prescribed drugs to Donald Trump until he started to run for President.

This isn’t the first time someone had made this accusation. According to SpyMagazine “Have you ever wondered why Donald Trump has acted so erratically at times, full of manic energy, paranoid, garrulous? Well, he was a patient of Dr. [Joseph] Greenberg’s from 1982 to 1985.”

Trump Drug Prescription 1982

Dr. Joseph Greenberg treated Trump from 1982 to 1985 for “metabolic imbalances‚” which is not a real medical disorder‚ but rather a fancy way of saying Trump wanted to burn fat.

The thing about Tenuate Dospan is that‚ due to its side effects‚ which include insomnia‚ confusion‚ and nervousness‚ it’s only supposed to be used for short time periods. So this makes what was written about Trump’s use of the drug seem alarming.

The diet drugs‚ which he took in pill form‚ not only curbed his appetite but gave him a feeling of euphoria and unlimited energy. The medical literature warned that some potentially dangerous side effects could result from long-term usage; they included anxiety‚ insomnia‚ and delusions of grandeur. According to several Trump Organization insiders‚ Donald exhibited all these ominous symptoms of diet drug abuse‚ and then some.

The brain damage caused by amphetamine use is still noticeable years later, say many experts.

In fact, users undergo similar brain chemical changes to patients suffering from Alzheimer’s Disease, stroke or brain tumors.

The Doctor said that it was “obvious” that Trump has been popping speed of some sort, and this would explain his weird speech patterns, and even the “crashes” he seems to have where he starts slurring his words suddenly and has severe dry mouth.

When you watch Trump speak to a crowd, and pay attention to his mannerisms and speech patterns, he certainly fits the bill for what you would expect from someone who is consuming pharmaceuticals.

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