Volume 78 / Number 12, August 20 - 26, 2008
West and East Village, Chelsea, Soho, Noho, Little Italy, Chinatown and Lower East Side, Since
1933

Making the case that Magnum is Westbrook’s manager

By Gerard Flynn

The Department of Buildings says that disciplinary action will be taken against the owners of a rent-stabilized building at 201 E. Second St. should the department determine that information provided on permit applications is false and misleading. 

“We have zero tolerance for applicants who submit false information and we are going to look into this matter,” Buildings spokesperson Kate Lindquist said.

According to Department of Finance records, the building is one of 17 in the East Village purchased in May 2007 from Extell Development Company by Westbrook Partners, a real estate investment company. Westbrook’s purchase, tenant advocates say, is part of a growing trend of investment companies targeting the city’s rent-stabilized buildings in what the advocates call “predatory equity lending.”

Over the past three years, Westbrook and its partner on the East Village deal, Normandy Real Estate Partners, have been heavily investing in rent-regulated housing.

The Association for Neighborhood and Housing Development, a nonprofit group that has been studying the trend over the past three years, estimates that 8 percent of the city’s rent-regulated housing stock, or roughly 90,000 apartments, have been bought in Manhattan, Queens and the Bronx by private equity firms over the past four years.

On its Web site, Normandy notes, “We turn ordinary, underachieving properties into exceptional, high-yielding investments.”

Starting in August 2007, the Cooper Square Committee, a local tenants advocacy group, has been surveying 15 of the 17 buildings. As of this March, the committee found that of 210 units surveyed, 87 were either vacant or renovated.

In a meeting about the Westbrook buildings attended by 65 tenants and moderated by Cooper Square’s Brandon Kielbasa, residents reported what they viewed as sustained attempts to vacate the apartments through a variety of measures, including Housing Court action or threats of eviction, interruption of essential services without notice and the reduction of their apartment buildings to “hard-hat areas.”

At the meeting, tenants also voiced their disapproval with the new management company, PVE Associates, which they said was often uncooperative when requested to do repairs. Phone calls left on the company’s answering machine were usually not returned, tenants said.

That PVE Associates did not provide a physical address, a violation of the city’s Housing Maintenance Code, also figured among tenants’ complaints at the meeting.

Unsigned letters posted in the buildings’ entrances or mailed to tenants notified them that the company can only be reached through a post office box address on Prince St. or through a phone number.

Seth Donlin, a spokesperson for the Department of Housing Preservation and Development, said that if tenants called 311 with complaints, action would be taken by the agency.

“H.P.D. requires that management companies have a physical address which should be posted in the doorway,” he said.

If a subsequent investigation confirms the complaint, a violation would be issued, Donlin said.

Some tenants then and since have also reported confrontations with an individual who they know to be the sole representative of PVE Associates. Described as menacing by some tenants, he is known as “Josh” to some and “Josh Evans” to others.

A building permit for one of the properties, at 435 E. 12 St., lists Josh Evans on ownership information. PVE Associates is given as the business name.

One tenant, who spoke on condition of anonymity, identified the representative as Josh Slepian, who lists himself on the Linked In Internet networking site as “PM magnum management” — the “PM” obviously standing for “property manager.”

“Earlier this year, I called the offices of PVE Associates LLC and asked to speak to Josh,” the tenant said. “A gentleman responded. When I asked if this was Josh Slepian, he responded, Yes.”

While tenants and advocates still speculate on the identity of PVE Associates, evidence collected since the March meeting by this reporter and a tenant in another of Magnum Management’s rent-stabilized properties points to the company’s involvement in the East Village Westbrook buildings.

Magnum Management’s co-principal, Ben Shaoul, who was profiled in February by The New York Observer as the “boy developer who wants to live forever,” was named last year as one of New York City’s 10 worst landlords by tenant advocates for his reported methods of vacating rent-stabilized buildings. Shaoul started in the business as a 19-year-old intern with the Shalom family, whose sprawling real estate empire has been the target of numerous lawsuits for code violations and harassment over the years.

Although some permit applications filed with the Department of Buildings list Magnum Management’s main phone number, Magnum’s dealings with a Manhattan law firm provided the initial markers that would eventually lead back to Magnum’s offices.

On almost all Buildings Department permit applications for the 17 buildings, Billy Yu is named on ownership information. A former address for the law firm Seligson, Rothman & Rothman is also provided.

In a November 2006 article in the trade newspaper Real Estate Weekly, Seligson, Rothman & Rothman was named as Magnum Management’s representative in a $10 million deal, again involving the purchase of rent-stabilized buildings.

In that deal, two rent-stabilized buildings were bought on Broome St., and broker Rama Bassalali, of RMB Properties, noted that Magnum Management was planning to “seek market-rate rents for the apartments.”

Bassalali told this reporter that developers throughout the city were coming to him expressing a “very strong interest” in rent-stabilized buildings throughout Manhattan, and that Magnum Management was looking to buy rent-stabilized buildings throughout Lower Manhattan, from Chelsea to Chinatown and the East Village.

Yu could not be reached at the law firm’s offices. Attempts to contact him stopped with the secretary. Questions about PVE Associates, the secretary said, were being directed to the wrong party: If The Villager needed to talk with someone about PVE Associates, the newspaper should be speaking, not with Billy Yu, but with Michael Soleimani.

“He will have the information you need regarding PVE Associates,” she said. The phone number she provided was for Magnum’s Broadway offices.

Soleimani, formerly the exclusive broker in the East Village for realty services firm Massey Knakal, declined to comment for this article. Instead, calls were routed to Anna LaPorte, vice president at the Rubenstein Associates public relations firm, who issued a blanket denial.

“Magnum does not 100 percent have any connection with PVE Associates,” LaPorte said. “They have no connection with that organization.”

Subsequent to The Villager’s conversation with LaPorte, the secretary at Seligson, Rothman & Rothman denied that Billy Yu was an employee at the firm.

“I know now that there is no one here by that name,” she said.

The secretary said she couldn’t comment on why phone calls to the law firm after business hours reached the voicemail for Billy Yu.

Yu’s name is also listed as the “secretary” on one letter sent to a Westbrook tenant from the law firm of Bauman, Katz and Grill alleging illegal subletting. That firm has reportedly brought 12 cases against tenants in the past year. Six tenants have since lost their apartment, according to Housing Court records.

Despite blanket denials, inquiries made to the Corporation Service Company, registered agents for PVE Associates, further point to Magnum Management’s involvement with PVE Associates — if they are not indeed the same company.

A private company operating in all states, C.S.C. receives “service of process” — legal documents — on behalf of its clients and reroutes them to addresses on records. All records held by clients are supposed to be strictly confidential.

Despite such protocol, inquiries made to the Corporation Service Company drew unexpected results from representatives answering phones in Wilmington, Del., and Albany, N.Y.

Requests to confirm the contact address for PVE Associates LLC on file returned Magnum Management and its Broadway location as the firm on record with the company.

However, neither Soleimani nor Shaoul was listed on records as the contact person, C.S.C. representatives added.

“We have a Zack Tendle at Magnum Management, T-E-N-D-L-E,” several operators noted.

Calls to a surprised — and stammering — Tendle resulted in answers that were not surprising: He had never heard of PVE Associates LLC.

“I work for Magnum Management,” he said.

If Ben Shaoul’s Magnum Management is indeed the operating arm behind PVE Associates LLC, it wouldn’t be the first time Shaoul’s involvement in a highly publicized event has escaped the media and public’s attention.

In a December 2007 article by Steve Cutler in the trade newspaper The Real Deal, in which Shaoul was interviewed, Shaoul’s Magnum Group was identified, along with Kennelly Development, as a partner in the 40-story building at 303 E. 51st St., where seven workers were killed in a crane accident on March 15 of this year, in one of the worst construction accidents in the city’s history.

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