The city’s proposed $60 million settlement over its third-party transfer program has advanced.
A U.S. District Court judge granted the proposed $60 million settlement preliminary approval last week. The settlement is scheduled for a hearing on final approval in May.
The news was first reported by Law 360.
If approved, the city will pay $60 million to property owners who had their buildings seized in the last round of the program, in 2018.
The idea behind the third-party transfer program was to take properties that were distressed and delinquent on their taxes, transferring them to a nonprofit and eventually to an affordable housing developer. The tax arrears gave the city the mechanism to foreclose on the properties.
But the program wiped out equity that property owners had in their buildings, often for debt that was far less than the value of the buildings. Property owners sued in 2019 in a proposed class action. The city has not admitted wrongdoing as part of the settlement.
Several properties transferred in the last round did not meet the city’s definition of distressed, and many had few hazardous housing code violations, according to a City Council investigation.
“The government has the ability to take private property for a public purpose, but it has to pay just compensation,” said Matthew Berman, an attorney for the plaintiffs. “And the TPT program didn’t do that.”
Before May, attorneys will have to identify prospective members of the class and contact them. There were 64 properties included in the final round of the program, but some of those may have had multiple owners.
Property owners affected by the other nine rounds of the program are still in active litigation with the city and still seeking to certify their class.
The settlement and its size have complicated the effort to reboot the third-party transfer program after its suspension in 2019.
Council member Pierina Ana Sanchez, who has been leading that effort, has a new bill to reform and revive the program that she says will only focus on the worst of the worst buildings. It will offer property owners off-ramps at several points to avoid having their property transferred, she said.
What we’re thinking about: The Alexander brothers, former top residential brokers convicted of federal sex trafficking, were sentenced to 30 years in prison Tuesday. Read our coverage here.
A thing we learned: One Hell’s Kitchen penthouse has been home to Lady Gaga, Carmelo Anthony, Amar’e Stoudemire, and Tracy Morgan, according to Robb Report. It is now listed for $7 million.
Elsewhere…
— New York County jails billed US Immigration and Customs Enforcement $20 million for detaining thousands of immigrants for the agency since early last year, New York Focus reports. A statewide law will prohibit counties from detaining people for ICE as of Nov. 25.
— Eric Adams’ buildings commissioner Eric Ulrich intervened in 2022 to help reopen the then-mayor’s favorite Queens restaurant, Aldo’s, after it was shut down for health code violations, Gothamist reports. After a health inspector found mouse droppings and “unrefrigerated calamari” on the premises, the owners allegedly called Ulrich, who used his City Hall connections to expedite a reopening. One of the owners allegedly sent Ulrich $300 for someone named “Marietta,” although the identity or meaning of the name is unknown. Ulrich is currently on trial for accepting bribes; he has denied any wrongdoing.
— More than half of the restaurants that have received outdoor dining permits since 2024 waited more than 19 months for that approval, according to a city comptroller’s office investigation reported by Crain’s. Just 29 percent of the applications submitted by June 15 this year have been approved.
Closing time
Residential: The most expensive residential sale recorded Tuesday was $8.74 million for a 4,475-square-foot townhouse at 1211 Park Avenue in Carnegie Hill.
Commercial: The most expensive commercial transaction was $57 million for a 137,390-square-foot commercial property at 2925 Veterans Road West in the Charleston of Staten Island. Joyland Management sold the South Shore Commons Shopping Plaza to Phillips Edison & Company.
New to the Market: The highest price for a residential property hitting the market is $18 million for a 1,696-square-foot house at 40 Riverside Drive on the Upper West Side. Richard Nassimi with Douglas Elliman has the listing.
Breaking Ground: The largest new building permit filed was for a proposed 54,052-square-foot 56-unit project at 139-57 Queens Boulevard in Jamaica Hills. Naresh Mahangu filed the permit on behalf of developer Ben Kaftari.
— Matthew Elo
