I interviewed Connor Blancato, an up-and-coming real estate lawyer, for the New York Real Property Law Journal. The interview emphasizes the importance of mentorship for new lawyers.
Click on the picture to read the interview.
U.S. Senator Tina Smith (D-MN) and Representative Ocasio-Cortez (D-NY) recently introduced the Homes Act which would establish a Housing Development Authority. The HDA is based on the Social Housing Development Authority bill introduced in New York earlier this year.
I was on a panel that discussed the pros and cons of the New York bill. The recording of the panel can be found here.
More specifically the federal bill would
(This is from AOC’s press release, linked to above.)
I recently served as an expert witness in a forfeiture proceeding that stemmed from an expansive criminal scheme to defraud vulnerable New York City residents out of their homes. I was a pro bono expert on behalf of one of the homeowners. Judge Ramos (SDNY) ruled in favor of the homeowner, relying in part on my testimony regarding due diligence norms in real estate transactions. United States v. Meiri, 15 Cr. 627 (ER), 2024 WL 451230 (S.D.N.Y. Oct. 17, 2024), The opinion can be found here.
The Opinion & Order opens,
This forfeiture proceeding stems from an expansive criminal scheme to defraud vulnerable New York City residents out of their homes or other properties. From around January 2013 to May 2015, Herzel and Amir Meiri, along with five other defendants, operated an organization known as “Homeowner Assistance Services of New York” (HASNY). The defendants targeted owners of distressed properties, inviting them to seek HASNY’s assistance to save their homes from foreclosure. Under the pretense of a loan modification or a short sale, the defendants then tricked the victims into transferring their properties to one of the defendants’ entities. The defendants generated millions of dollars in profits through this fraudulent enterprise.
The scheme eventually came undone, and criminal proceedings were initiated. The Meiris pled guilty to conspiracy to commit wire fraud and bank fraud, and they agreed to forfeit more than thirty properties to the United States. Two of those properties, both located in Brooklyn, are at issue here. the first is 2146 and 2148 Fulton Street, which the defendants stole from Mary and Samuel Nyamekye. The second is 644 Chauncey Street, which the defendants stole from Olive and Vincent Holmes.
After stealing those properties, the Meiris used them as collateral to secure loans from Petermark II LLC and Advill Capital LLC. Petermark and Advill have filed third-party petitions asserting an interest in the forfeited properties. The companies maintain that they made the loans without actual or constructive knowledge of the Meiris’ fraud. The United States, however, contends that Petermark and Advill were on notice of the fraud due to numerous red flags. Mr. Nyamekye and Mr. Holmes have filed third-party petitions as well.
‘The question is,’ said Alice, ‘whether you can make words mean so many different things.’ ‘The question is,’ said Humpty Dumpty, ‘which is to be master — that’s all.’
The Daily Beast quoted me in Trump’s Bank Fraud Defense ‘Defies the Laws of Physics.’ It reads, in part,
Donald Trump’s colossal trial for faking property values starts next Monday, and one mind-boggling issue has emerged as his weakest defense yet: the idea that his past lies on financial statements were justified because prices eventually went up anyway.
* * *
“What he is saying is completely inconsistent with how real estate professionals talk about valuations,” said David Reiss, a Brooklyn Law School professor who specializes in real estate finance.
“When you talk about valuations at a given time, you’re talking about what its value is at that time. It becomes more valuable in the future, but that’s its value at the time,” Reiss said.
That means Trump’s 2014 financial statement should have, naturally, captured the value of any given building or land at that time.
To better understand why Trump’s excuse is bonkers requires a quick review of the three basic methods to assess value employed by professional property appraisers.
One is the income approach: What income a particular property is currently generating? That doesn’t account for the future, Reiss said.
Another is the cost approach: How much does it cost to replace the property? That doesn’t consider the future either, Reiss made clear.
The third is the sales comparison approach: What are similar parcels and comparable properties selling for? This could include future expectation of development, Reiss explained. After all, sale prices are determined by supply and demand—and a fundamental concept in economics dictates that demand can be affected by consumer expectations of future price changes.
As usual, Trump’s logic seems to careen off the rails and focus solely on his property’s future value. But Trump simply can’t do that because he wants to.
“That’s not how the legal system works or how the real estate industry works… if everybody could say that, nobody could be accused of a lie. We would all do whatever the heck we want,” Reiss said.
Reiss likened Trump redefining time-bound questions on financial forms to the way Humpty Dumpty makes up words in Lewis Carroll’s sequel to Alice’s Adventures in Wonderland. The law professor read a passage in which Alice took issue with the Eggman’s improper use of the word “glory.”
Humpty Dumpty smiled contemptuously. “Of course you don’t—till I tell you. I meant ‘there’s a nice knock-down argument for you!’”
“But ‘glory’ doesn’t mean ‘a nice knock-down argument,’” Alice objected.
“When I use a word,” Humpty Dumpty said in rather a scornful tone, “it means just what I choose it to mean—neither more nor less.”
NY Attorney General James
I was interviewed by Reuters in Explainer: What New York’s lawsuit means for Trump regarding the lawsuit that New York Attorney General James filed against former President Trump and others in his circle. The video is here. The transcript reads in part,
The lawsuit seeks to have Trump and the other defendants give up $250 million in what she says were false financial gains.
James is also seeking to bar Trump and three of his children – Donald Trump Jr, Eric Trump and Ivanka Trump – from serving as directors of companies registered in New York…
and prevent them and their company from buying commercial real estate or getting bank loans in New York state for five years.
She is also seeking to appoint an independent monitor at the Trump Organization to oversee various aspects of its business for five years.
Trump, who is considering running again for president in 2024, is expected to contest the litigation. But David Reiss, a professor at Brooklyn Law School, sees another possibility…
“…He’s been very effective at pushing final outcomes in his legal battles years down the road, and maybe that’s a good enough strategy for him. That’s possible. The other possibility, even though he doesn’t say this on Twitter, is he may settle.”
The New York Law Journal quoted me in Upper West Side Skyscraper’s Future Uncertain After NY State Court Ruling. The story opens,
The development at 200 Amsterdam Ave. in Manhattan is slated to be the tallest building on the Upper West Side, with its 51 stories rivaling the skyscrapers located further downtown.
But whether this will ever happen has now become questionable, after a state court ruling that found city officials were wrong to follow an interpretation of city zoning law used by the developer to achieve the project’s awesome height.
Supreme Court Justice Franc Perry of Manhattan sided with local community groups looking to halt the building underway at the site. The plaintiffs—the Committee for Environmentally Sound Development and the Municipal Arts Society of New York—were joined by numerous local state and city elected officials in opposing what they say is not only an out-of-character monster development in the Manhattan neighborhood, but one that relied on a faulty zoning law interpretation to move forward.
“It is finally a declaration that zoning law means something and developers can’t make it up as they go along,” said Emery Celli Brinckerhoff & Abady name attorney Richard Emery, who represented the plaintiffs.
Since 1978, developers and city buildings officials have relied on the so-called Minkin Memo, named after the former head of the city’s Department of Buildings’ Irving Minkin, for guidance on what experts call an ambiguity in the city’s zoning law towards so-called tax lots. These are additional subdivisions of city real estate, which can overlap with or be included inside a zoning lot.
Under the Minkin memo, developers have been able to pull together extra vertical building rights that nearby property owners aren’t using, offering the opportunity to boost the size of a project such as 200 Amsterdam beyond what would normally be allowed.
“The zoning resolution is ambiguous about when a zoning lot can be formed from partial tax lot; it never deals with that problem,” said Stewart Sterk, the Mack Professor of Real Estate Law and director of the Center for Real Estate Law & Policy at the Cardozo School of Law.
Initially, city officials had no problem with the move. DOB issued a permit to the developers for a residential and community facility building at the site of the Lincoln Towers condos on the Upper West Side. The developers relied on the Minkin memo as the basis for the acquisition tax lots that combined partial and whole lots to provide the developers with the vertical building rights needed for their skyscraper.
Shortly after DOB green lighted the project, the Committee for Environmentally Sound Development challenged the DOB’s decision. The challenge snowballed, and soon seemingly every local elected official, from state Assemblyman Richard Gottfried to borough president Gale Brewer, were opposed to the plan. The project’s permit was appealed by both CESD and the Municipal Arts Society to the city’s Board of Standards and Appeals.
In March 208, DOB made an official about-face on the project. In a letter from assistant general counsel to the BSA, the department said the Minkin memo provided an incorrect interpretation and that zoning regulations did not in fact intend for zoning lots to consist of partial tax lots.
The BSA was not persuaded by the arguments and in July 2018 voted 3-1 not to grant the appeal, with one board member abstaining. The plaintiffs soon after pursued a review of the BSA’s decision in state Supreme Court.
In subjecting the developers’ permit to further review, Perry pointedly took issue with BSA view of the process.
“BSA found that the Subject Zoning lot is ‘unsubdivided,’ within the meaning of the [New York City Zoning Resolution], simply because Developer has declared it to be so,” the judge wrote.
Noting that the referenced law states that a zoning lot is defined by being “unsubdivided” within a single block, Perry said BSA’s interpretation would render the term “superfluous,” and run “afoul of elementary rules of statutory construction.”
Since DOB saw the light on the Minkin memo during the appeal process, the court said the department’s statutory basis for the issuance of the permit to begin with was undermined. BSA’s decision was nullified and vacated, and the board was directed to review the project’s permit application “in accordance with the plain language” of the zoning regulation and Perry’s order.
As Cordozo’s Sterk noted, the development at 200 Amsterdam was far from the first to use the Milkin memo to justify partial tax lot usage in a building plan. Perry’s decision has the ability to throw uncertainty around zoning and building issues into a business sector highly adverse to such things, Sterk said.
But just as important for Sterk is the question now of when a government agency becomes estopped from changing its mind after it’s already induced people to rely on its existing interpretation.
“That’s a big problem in this case, because clearly developers have put millions of dollars into this project in reliance on an existing interpretation,” he said.
Brooklyn Law School professor David Reiss, who is the research director of the school’s Center for Urban Business Entrepreneurship, said he saw the case as less of a “good guy vs. bad guy” dynamic as much as one of whether the assurances of government officials can be binding.
“There’s a reliance on government statements and government permissions,” Reiss said, while noting the project has already commenced.
Should the case stand, he predicted it would serve to rattle developers’ confidence in their dealings with the city going forward.
“It’s more uncertainty in a process that’s already pretty uncertain,” he said.
CBS2’s Mary Calvi, photo by Marc A. Hermann / MTA New York City Transit
I was interviewed by Mary Calvi on CBS New York in Man Wants Back Property NYC Took From His Family In 1967 (click here to watch the segment). The transcript of the segment reads, in part,
There is a property battle that has been brewing in the Bronx for some time.
A man is fighting to get back a piece of land that he claims belongs to his family.
He says the city took the land five decades ago saying it wants to extend a road, but all these years later nothing has changed, CBS2’s Mary Calvi reported Monday.
Fred Filomio fixes what’s broken on trucks in the Bronx. For decades, one problem has lingered, unfixed.
You see, back in 1967, when he was entering military service, the city of New York, using eminent domain, took part of his family’s property.
“When my uncle Freddie came back from World War II, they bought the whole block,” Filomio said.
A 13,000-square foot piece that sits up 22 feet above street level is a small part of a larger piece of property on Boston Road in the Bronx for his family’s trucking business. Back those 50 years ago, the city said it had to have the property in order to widen a street adjacent to it.
“They haven’t used one square foot of the property,” Filomio said, adding it looks the same as it did five decades ago.
In 50 years, the city has literally done nothing with the property. Filomio even uses it to park his trucks. His lawyer, Richard Apat, has filed suit.
“We feel showing number one it was an excess taking. Number two, it’s now being held as a proprietary. Number three, that we have been in possession we should get it back. But even with that, Fred is a reasonable person. If the city will talk to us and say let’s work something out, he’ll pay them some money, he’ll start paying taxes and that’s why I say I think it’s win-win,” Apat said.
The city responded to CBS2’s numerous requests for comment, with only the following from a spokesperson: “The property involved in this ongoing litigation is not subject to a claim of adverse possession, as a matter of law. We have no further comment while this litigation is pending.”
Professor David Reiss teaches students about eminent domain at Brooklyn Law School. He said he believes this one, like most others, is a difficult one to win.
“It looks like they have a tough row to hoe,” Reiss said. “Once the government takes ownership of the property, generally it’s theirs.”
