The Landlords, or Somebody, Striking Back

By David Gonzalez
Contributing Writer/New York Times

Cracked walls, leaking ceilings and hallways slathered with dirt-brown streaks apparently do not bother the tenants of 2315 Walton Avenue in the Bronx. Nor are they perturbed by a flimsy front door, silent intercoms or strangers who hold weekend beer and pot parties on the stairways.

Supposedly, they have reserved their outrage for some underpaid and overzealous community organizers from the Northwest Bronx Community and Clergy Coalition who dared offer their help to demand repairs and safety from the landlord and the bank that holds his mortgage. In fact, a lawyer for the landlord said the tenants were so happy with the owner and the status quo that they signed a petition saying they wanted nothing to do with any community organizers. The landlord, in turn, persuaded a judge in Westchester - the county, not the avenue - to ban the organizers from the building in November pending a decision on a permanent prohibition.

Another landlord - but using the same lawyer and language - filed a similar suit against another group, the Highbridge Community Life Center, to prohibit its lone organizer from entering several decrepit buildings.

The lawyer contends that the organizers have hurt the reputations of these landlords, ultimately hurting their wallets when Washington Mutual rejected their request to refinance their mortgages at a lower rate. The lawsuits allege that the community groups want to take over the buildings for themselves, although the groups have never owned or managed buildings.

The allegations over conditions are as contentious as determining who actually owns the buildings. The city’s Department of Housing Preservation and Development insists that they are among 95 owned by Frank Palazzolo, a Westchester businessman. City officials say Mr. Palazzolo is among New York’s worst landlords, with the buildings linked to him having a total of 19,000 violations.

Bronx real estate has often always been a battleground, but seldom in such bizarrely byzantine ways. A businessman insists he is not the landlord despite his dealings with banks and ample official suspicion. Community groups with decades of experience fighting for tenants are being shut out of buildings in their own neighborhoods. And a Westchester judge is engaging in cross-county jurisprudence to determine the future of them all.

Housing Preservation officials said they had taken the unprecedented step of issuing a sweeping subpoena against Mr. Palazzolo seeking countless corporate details. They have also submitted an affidavit in support of the community groups, who are worried that an adverse ruling would restrict their First Amendment rights and harm their ability to meet and represent people living in shabby apartments.

“The more run-down a building tends to be, the more likely the landlord is renting to people who do not know how to demand their rights,” said Mary Dailey, the executive director of the Northwest Bronx Coalition, which also has a Housing Preservation contract to monitor housing conditions in the group’s area. “In a situation of this magnitude, where you are an owner who is already known to the government to be this much of a problem, what is the court thinking to have signed a restraining order against us?”

Mr. Palazzolo insisted that he had nothing to do with the lawsuits against the community groups and that he welcomed the chance to prove he had no connection to the buildings being examined by the agency other than helping the owners obtain financing and office space. The latter - corporate offices on Central Park Avenue in Scarsdale - explains why the lawsuits against the community groups were brought in Westchester County and not the Bronx.

His contention that he does not own the buildings is a little more complicated. Libby Hutchinson, a spokeswoman for Washington Mutual, said Mr. Palazzolo was the person who represented dozens of corporations claiming ownership. She said the mortgages were originally issued by Dime Bancorp, which her bank acquired in January 2002. Privacy agreements prevented her from commenting in detail, but a bank executive has said before that it appears Dime may not have adequately inspected the buildings before making the loans.

Community groups had contacted the bank to demand that it inspect the properties and force repairs. The groups also painted Mr. Palazzolo as the borough’s leading slumlord.

Mr. Palazzolo, who said he was only a deal maker, dismissed those complaints, though he said he would be proud to own most of the disputed buildings. Not that he does, he added.

Reprinted from the March 23, 2004 Metro Section of the New York Times.