Riverton Housing Complex Is Sold In A Deal Preserving Affordable Units

by Charles V. Bagli, New York Times, December 16, 2015


Riverton, a residential complex that has long been a home for Harlem’s middle class, was one of the first properties to fall victim to speculators during the heady days of the last real estate boom a decade ago.

The new owner, who hoped to rapidly replace long-term residents with higher-paying tenants, saddled the complex with huge debts before losing Riverton to his lenders in 2008.

Now, after years of uncertainty, the complex, which comprises 1,229 apartments in seven brick buildings lining a grassy mall near the Harlem River, has been sold for $201 million under an agreement with the city that keeps 975 units affordable for working- and middle-class families for 30 years.

The city, in turn, will provide the buyer, Douglas Eisenberg of A&E Real Estate Holdings, property tax breaks and other incentives worth about $100 million.

The agreement seeks to deal with a wave of gentrification that continues to wash over many once poor or working-class neighborhoods, pushing rents ever higher and threatening to force out many longtime residents.

Stabilizing Riverton has been a priority for Mayor Bill de Blasio, who has made preserving or building 200,000 units of affordable housing a cornerstone of his tenure.

“It’s been our mission to keep tenants in their homes and keep Riverton affordable for the next generation,” Mr. de Blasio said in a statement. “This is preservation on a grand scale, and it is going to protect the kind of economic diversity that’s always been part of Harlem.”

The New York City Council voted on Wednesday for property tax exemptions worth about $92 million over 30 years, with the city providing an additional $8.8 million in other tax breaks.

“The original mission at Riverton was to provide solid, middle-class housing for the Harlem community,” said State Assemblyman Keith L. T. Wright, a Democrat who represents the neighborhood and who has been a lifelong resident of Riverton. “I think this deal will preserve that mission.”

Mr. Wright and Councilwoman Inez Dickens, who represents the neighborhood on the Council, worked with the city and tenants to establish income levels for the affordable apartments. Mr. Eisenberg and partners working with him have agreed to make $40 million in capital improvements based on a list drawn up by tenants and will regularly meet with residents.

Ms. Dickens acknowledged that the city was forgoing a significant amount of tax revenue by granting exemptions. “But,” she added, “we’re doing this to protect the existing tenants. This is the only leverage the city has.”

Under the terms of the agreement, 975 apartments would be set aside for tenants at three income levels that officials say mirror the current composition of Riverton.

A family of three earning up to $46,620 would be eligible for one-third of the apartments, at a rent of $1,165 a month, while another 325 units would be set aside for a family earning up to $62,150, with rents at $1,550 per month. The rest of the units would be for a family earning up to $97,125 a year for an apartment renting for $2,425 a month, which is about the rent for market-rate units at Riverton.

But Cynthia Allen, president of the tenant association, was concerned about the new owner, who, she said, reminded her of Larry Gluck, the speculator who bought the complex in 2005. She said she favored another buyer.

Mr. Gluck was among four developers who bid for the property in recent months after CW Capital, the company that runs the complex on behalf of bondholders, put it up for sale. The city urged CW Capital to reject his offer, which it did.

But Randreta N. Ward-Evans, a resident and a former tenant leader at Riverton, said, “I think this is the best way for us to go at this stage.”

Until 2011, Mr. Eisenberg worked at a family-owned company, Urban American, which has clashed with tenants in the past and racked up a number of building violations. He split with his family, started his own firm and has since bought 10,000 apartments, most of them in New York City.

City officials say that a review of buildings owned by his new company turned up a relatively small number of building violations and that most of those he inherited when he bought the properties.

“We’re committed to long-term ownership and reinvestment,” Mr. Eisenberg said. “We will work in partnership with residents and the city to preserve truly affordable housing for middle-class working families.”

Riverton opened in 1947 as a haven for returning World War II veterans and was built by the Metropolitan Life Insurance Company, which also built Stuyvesant Town-Peter Cooper Village, the sprawling complex in Manhattan along the East River. MetLife, however, barred black and Hispanic tenants from Stuyvesant Town, Peter Cooper Village and Parkchester, another complex the company built in the Bronx.

Riverton quickly became a sought-after address in Harlem. Its tenant roster over the years included Samuel R. Pierce Jr., a former secretary of housing and urban development; the jazz pianist Billy Taylor; former Mayor David N. Dinkins; Judge Fritz W. Alexander of the State Court of Appeals; Suzanne de Passe, a former vice president of Motown Records; and Clifford L. Alexander Jr., who was secretary of the Army under President Jimmy Carter.

“Riverton is part of Harlem’s soul,” Mr. Dinkins said in a statement on Tuesday. “And this agreement keeps Riverton as a bastion of affordable housing. After a decade of uncertainty, we can finally say Riverton has a bright future and that its tenants are protected.”

City Hall Press Release

Comments are closed.