Tag Archives: Brazil

Owning the New Yorker

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Mickey Barreto, in New York. — Photo: Reproduction/Fantastic

Mickey Barreto, in New York. — Photo: Reproduction/Fantastic

I was interviewed by TV Globo, the largest broadcaster in Latin America, about Mickey Barreto who claimed to own the New Yorker hotel in Manhattan. The video is in Portuguese, but there is a rough English translation of the transcript. The transcript opens,

After Living for Free in a NY Hotel for 5 years, a Brazilian Puts the Entire Building in His Name and the Case Ends up in Court

A Brazilian is in the middle of a controversy involving New York ‘s housing legislation . After staying in a hotel room for 5 years, Mickey Barreto believes he owns the entire building.

The confusion ended up in court . He was even arrested on fraud charges. While free awaiting trial, Mickey spoke to Fantástico. New York hotels are among the most expensive in the world and living on Manhattan Island is not for everyone, but Brazilian Mickey Barreto paid nothing.

Barreto lived for free, for 5 years, at the New Yorker hotel. And there’s more: he managed to put the entire building in his name. A negotiation made based on New York City rent law. The hotel says there was fraud.

The Brazilian, who is actually called Marcos Aurélio Canuto Muniz Barreto, managed to understand a complex law — and benefit from it.

The New Yorker Hotel opened in 1930, with more than a thousand rooms and 43 floors . At the time, it was one of the largest in the world. It hosted politicians and celebrities, such as inventor Nikola Tesla, baseball player Joe DiMaggio and boxer Muhammad Ali. In 1972, it faced a crisis and closed its doors. It ended up becoming one of the cheapest hotels in the city.

When Mickey Barreto arrived from California in 2018, he said he had no plans to stay at the hotel for long. Until he learned of an old law in New York that allowed someone to stay with all room service included and pay very cheaply.

Under the law, still in effect, New York hotels built before 1969 that charged less than US$88 per week that year — a cheap rate at the time — would have to give guests a rental contract for 6 months or more. The guest would then have the right to become a permanent resident. “The legislation limits the amount that each owner can charge for rent in New York in certain apartments. It is a 1969 law that applies to different places. And through a legal loophole, hotels considered cheap entered this regulation. Mickey Barreto discovered that this hotel is technically included in the rules defined by law”, explains David Reiss, a jurist at the Brooklyn School of Law.

The hotel resisted, but Barreto won the case in court and that was how he started living at the New Yorker. But, in addition to refusing to pay, Mickey Barreto wrote a deed and managed to register the hotel in his name, claiming that a judge gave him ownership of the hotel.

“According to the law, having possession is not the same thing as being an owner . Every tenant has possession of the apartment where he lives, but that does not mean that he is the owner. There is no legal basis for this correlation. I think he only gained in Justice because the hotel didn’t send any lawyers. And here in the United States, if you don’t send your lawyers, you’re going to lose”, says the jurist.

Already calling himself the owner of the New Yorker, Barreto went to the hotel’s restaurant and demanded that the concessionaire pay him for renting the place. He was ignored, but continued to bother employees and even demanded a complete reform of the entrance.

Craziest Real Estate Windfalls

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"Le Voyage dans la lune" by Georges Méliès - Roger-Viollet

Realtor.com quoted me in A Brief History of Crazy Real Estate Windfalls. It opens,

Real estate is one of those things where it’s hard to differentiate between a once-in-a-lifetime deal or an epic bomb without the benefit of hindsight. Want proof? Let’s take an invigorating jog down memory lane and view a few of the land swaps that are considered the most lopsided in history—windfalls for one side, colossal blunders on the other. Let’s crack open the history books!

Proof that Portugal needs better maps

The historical highlights: In the 15th century for the Treaty of Tordesillas, global superpowers Portugal and Spain sat down with a map of the world (as they knew it in the 1400s) and drew a line down the middle. Portugal got everything on the left, Spain on the right. Even Steven, right? Not quite. Once they decided to actually look at their new “empire,” Portugal found it basically had nothing (well, besides Brazil), while Spain had pretty much the entire world (you know, Europe, Asia, Russia…).

It taught Portugal a harsh lesson: Approaching land deals the way the kids in “Family Circus” deal with sharing toys is not a viable global expansion strategy.

Real estate update: Granted, Portugal botched this deal at the table, but it’s not quite as bad as it sounds. According to David Reiss, a professor at Brooklyn Law School and research director for the Center for Urban Business Entrepreneurship, the treaty was “heavily modified afterward” to give Portugal more land to the west, including control over most of the Indian Ocean.

Still, in the end, no one won: Both empires eventually shrank back to the size you see today. If Spain won anything, it’s the language war: Most of Central America speaks Spanish, while only Brazil parlays in Portuguese.

America goes through a major growth spurt

The historical highlights: In 1803, America made its historic Louisiana purchase, buying 828,000 square miles of land from France for $15 million—roughly the catering budget of an “Avengers” flick today. That territory gave the fledgling nation a hell of a growth spurt, adding land that would become 15 Midwestern states from Arkansas to, of course, Louisiana.

Real estate update: It was a lot of land, and it cost a lot at the time. But it was totally worth it. “You got New Orleans, so right there it was a good deal,” says Reiss. “If you look at the home sales in New Orleans today, $15 million is the price of just the top four most expensive houses combined.”

The Alaskan ‘oil rush’

The historical highlights: In 1856, Russia negotiated with U.S. Secretary of State William Seward to sell Alaska for about 2 cents per acre, or $7.2 million. The purchase was derided, and the American people quickly dubbed Alaska “Seward’s Folly.”

Real estate update: Most people think that the measly $7 mill we spent on Alaska is pocket change compared to the gushing vats of cash funneling into the U.S. through the Alaska oil pipeline, right? Not exactly.

“We think of Alaska and its pipeline, and we think it’s a great deal,” says Reiss. “But economists have deduced that the pipeline earns the government less than it costs to govern Alaska, so it’s a net loss. Calling it ‘Seward’s Folly’ makes sense.”

$24 for … Manhattan?

The historical highlights: It’s one of the oldest stories in our history—Savvy Dutch settlers, preying on the naiveté of the Canarsie Indians, bought all of what would become Manhattan for $24, less than the price of a sweater from a Times Square Forever 21.

Real estate update: True, New York City is estimated to be worth $802.4 billion today, and Manhattan is its busiest hub. However, before you express outrage about those poor Indians, consider this: It was the Dutch who got conned. You see, the Canarsie Indians who brokered the deal didn’t live in Manhattan. Sure, they’d hop over there to party with the Manhattoes tribe, but it wasn’t their home and they certainly had no right to sell.

“The common story is that the Europeans swindled the natives,” says Reiss. “But it does look like the other way around.” (The Manhattoes, however, are another story.)

*     *     *

Man sells the moon

The historical highlights: In 1967, the United Nation Outer Space Treaty stated in regard to our moon: “No nation by appropriation shall have sovereignty or control over any of the satellite bodies.” In 1980, a Nevada resident named Dennis Hope came to the conclusion that the treaty forbade nations from owning the moon but not individuals. So he wrote a letter to the U.N. saying he was taking ownership and that it should contact him if it had any issue with that. The U.N. did not respond, and he’s been selling moon acreage ever since. Hope claims to have sold over 600 million acres, with the largest going for over $13 million.

Real estate update: If he really has those checks in hand, then Hope is a genius and this is indeed a very lopsided deal—he’s selling uninhabited land that will be completely inaccessible in the lifetimes of the buyers. Not that we should necessarily applaud him for it.

At worst, “I’d classify him as a huckster,” says Reiss. “And it appears his interpretation of the law is incorrect. The fact that the government hasn’t responded to his letter doesn’t give him rights to the land.” So, even if he does have all that money, it could get him in a whole lot of trouble.