UPDATED, March 20, 12:20 p.m.: The Kushner family real estate company is operating eight East Village rental buildings illegally, Bronx Councilmember Ritchie Torres alleged at a Tuesday morning press conference outside the company’s 666 Fifth Avenue headquarters.
Torres said that his investigation, launched in cooperation with the nonprofit Housing Rights Initiative, found the buildings had expired certificates of occupancy, meaning tenants should not be allowed to live in the properties.
The buildings, according to HRI’s Aaron Carr, have unpaid fines stemming from violations and unauthorized construction, which prevents Kushner Companies from being able to obtain a COO.
The findings follow previous investigations by Torres and Carr, which found that Kushner Companies repeatedly failed to indicate there were rent-stabilized tenants living in properties where it sought permits for renovation work. (A subsequent investigation by The Real Deal found that other major landlords, such as Solil Management, Blackstone Group and the LeFrak Organization, have also filed alteration permits at buildings with rent-stabilized tenants but indicated on paperwork they had no such apartments.)
In a statement, a Kushner Companies spokesperson said the firm is “committed to the safety of our residents and the proper maintenance of our buildings. Similar to many other landlords, we inherited from prior owners Certificates of Occupancy with various issues. Kushner will continue the long and detailed process to work with our consultants and the Department of Buildings to correct every issue outstanding.”
Torres and Carr on Tuesday called on the city’s Department of Buildings to discipline Kushner Companies and force it to pay its already large outstanding balance of fines. “After our [last] press conference, the buildings department took action against Kushner Companies and issued $350,000 in violations,” Torres said. “But has Kushner Companies paid those violations? No. So we’re incapable not only of passing the right laws but enforcing those laws and collecting the fines after issuing violations.” A Kushner companies spokesperson contested this, saying they have been “adjudicating the violations and to date have paid $185,000.00. The balance will be paid, when and if, final determinations are made.”
In a statement to TRD, DOB called the findings “pure grandstanding” and said the report “identified nothing more than paperwork lapses that have nothing to do with tenant safety.” Responding to follow up questions, a spokesperson conceded the buildings had outstanding violations, including occupancy and construction work problems, but said the department had not received complaints of unsafe renovation work, and that outstanding violations in the online database were not proof that problems initially identified by DOB persisted at the properties in question.
The spokesperson further said that expired occupancy certificates were code violations, but did not make residency illegal, although Carr, in response, cited a recent appellate court decision that found landlords could not charge rent without a proper certificate.
At at least one of the properties, 315 East 15th Street, the DOB did recently issue a partial vacate order due to illegal basement occupancy, the department spokesperson said.
For the last year, Kushner Companies, under mounting scrutiny from local, state and federal agencies, has been divesting from its New York holdings, selling the lease on 666 Fifth Avenue to Brookfield Properties, a property in Gowanus, and most recently, according to the Wall Street Journal, putting 100 Manhattan rental units on the market for sale.
Asked by reporters about offenders besides Kushner Companies, Torres and Carr acknowledged the violations are a widespread problem and Carr said they are working on a follow-up report on occupancy violations across the city.
In addition to the eight Manhattan buildings, Torres’ occupancy investigation also found that 50 North 1st Street, a 421a building in Williamsburg, is operating without a permanent certificate. The Real Deal previously reported that Kushner failed to register dozens of rent-stabilized apartments at 50 North 1st Street with the Division of Homes and Community Renewal.
Kushner Company’s multifamily operations was subpoenaed by U.S. Attorneys at the Eastern District of New York last year.
Torres, who first won a council seat in 2013, is rumored to be mulling a run for Congress, as a progressive challenger to incumbent democrat Jose Serrano in the Bronx. He’s an ally of City Council Speaker Corey Johnson and is said to be inspired by Alexandria-Ocasio-Cortez’s primary victory over Queens political boss Joseph Crowley.