Pinnacle RICO Settlement Upheld by Federal Appeals Court

Published: October 1, 2013 in the New York Times

Court Upholds a Settlement Affecting 20,000 City Renters

A federal appeals court has upheld a settlement affecting more than 20,000 rent-regulated tenants in New York City, clearing the way for them to seek individual compensation from their landlord for rent overcharges and other complaints.

In its decision on Monday, the United States Court of Appeals for the Second Circuit ruled that the 2011 settlement of the tenants’ class-action lawsuit against the Pinnacle Group, a large New York landlord, was “fair, reasonable and adequate.”

Under the Pinnacle settlement, the court concluded, all class members benefited from new procedures and “best practices” that the company agreed to follow in carrying out rent increases and evictions. The company also agreed to have a court-appointed administrator hear the tenants’ individual complaints of illegal rents and harassment and determine compensation.

The amount could reach more than $10 million, depending on how many tenants make claims, said Richard F. Levy of Jenner & Block L.L.P. who negotiated the settlement on behalf of the tenants and who said he was “exhilarated” by the court decision.

“These people have been waiting for a long time,” he said.

The tenants’ suit against Pinnacle, filed in 2007, made novel use of a law typically associated with the Mafia and other organized crime groups, the Racketeer Influenced and Corrupt Organizations Act, known as RICO. The tenants accused the company of engaging in a conspiracy to fraudulently increase rents in more than 400 buildings that it owned in the city. The appeals court called the tenants’ original racketeering case “a daring and unconventional effort” that achieved important benefits for the tenants under the settlement “against significant odds.”

Crooked Man

There was a crooked man, and he walked a crooked mile.
He found a crooked sixpence upon a crooked stile.
He bought a crooked cat, which caught a crooked mouse,
And they all lived together in a little crooked house,
His crooked cronies he would meet, not that far from crooked creek.

Community Facility On Hold for 101 West 85th Street

Due to the unauthorized variations in procedure relative to the landmark preservation approval of the community facility planned for the basement of the Brockholst at 101 West 85th Street, the NYC Department of Buildings Manhattan Borough Commissioner’s Office has chosen to “put the job on hold until it can be reviewed”. There is concern regarding “accuracy of the filing under Application #120164464″ and “The Department has initiated an audit of the referenced application”.


The full-sized proposed demolition and construction plans as submitted to the Landmark Preservation Commission can be seen/downloaded in PDF format by clicking on each of the 8 screen shots below:









As expressed by one of the Brockholst tenants:

Before the Brockholst destruction for the community facility


After the Brockholst destruction for the community facility


Upper West Side Slumlord Pollution

With all the controversy and debate at the June 1, 2010 Manhattan Community Board 7 meeting about the bicycle lane on Columbus Avenue from 96th Street to 77th Street, there was little time to address a few other important issues. One Brockholst tenant emailed me one of several documents objecting to the proposed community facility in the cellar of the Brockholst building at 101 West 85th Street that was submitted to Community Board 7. Here is the first page:

Gulf Oil Spill on the Upper West Side for CB 7 June 1, 2010
Financing a Slumlord with Taxpayer Money Who Does Not Provide Essential Services and Pollutes the Environment

The owners of the Brockholst are planning to construct a Community Facility in the cellar. With landmark status, the building at 101 West 85th Street was originally built before 1900. It is a combustible brick and wood frame building using #6 Fuel Oil. There are two restaurants on the Columbus Avenue side with two kitchens as well as the boiler in the cellar of the building where, currently, there is not even a sprinkler system in place.

Burning #6 Fuel Oil creates “a rain of toxic soot that aggravates asthma, increases the risk of cancer, exacerbates respiratory illnesses and can cause premature death” according to the Environmental Defense Fund’s December 2009 study, titled: The Bottom of the Barrel: How the Dirtiest Heating Oil Pollutes Our Air and Harms Our Health. The EDF study describes #6 Fuel Oil as “unrefined sludge laced with pollutants” and concludes that “Each gallon of No. 6 burned creates 18.8 times more soot (PM) pollution than No. 2 heating oil according to the EPA emission standards”.

Even the  NYC Community Air Survey Winter 2008-2009 issued by Mayor Michael Bloomberg office states that residential, commercial and institutional heating systems release 50% more fine particulate matter (PM2.5) and 17 times more SO2 than cars and trucks on New York City’s roads. The sludge-burning buildings in the city contribute 87 percent of the city’s heating oil soot pollution. There is proposed legislation to phase out the use of #6 and #4 Fuel Oils. Eventually, this dirty oil will be banned. The city is already converting some of its own heavy-oil-burning boilers to natural gas, after identifying 100 city school buildings burning No. 6 oil in neighborhoods with high asthma rates.

On the upper west side, the owners’ non-profit family trusts hold a total of 19 buildings under various DBA names with a total market value of approx. $2 billion. All boilers burn #6 Fuel Oil. With 1247 apartments and more than 300 HPD complaints, these buildings are burning approximately 776,511 gallons of #6 Fuel Oil, resulting in a huge failure to protect the community against toxic chemicals. In addition, the building owners and management only perform repairs relative to serious complaints of mold, heat and hot water, vermin including mice, rats, and bedbugs, serious leaks through the ceilings and walls described as “cascading waterfalls” when such complaints are reported and listed as violations or when tenants withhold rent to present their case in housing court under retaliatory threat of eviction. When repairs area performed, they are often self-certified and rarely re-inspected. The lack of concern for their tenants’ and other upper west side residents’ health and welfare is astonishing.

According to the DOB web site, several of the boilers in these buildings have not been inspected for years and do not have Certificates to Operate. The Brockholst certificate, for example, expired on October 28, 2009. Most previous inspections were certified by their own boiler installer, Irving Bauer, who inspects boilers in most if not all of their buildings.

Permission to construct the community facility in the cellar at 101 West 85th Street would further enable and subsidize slumlord management and the production of pollution via the resulting tax break which would be financed by taxpayers. The proposal should be scrutinized with an awareness of the entire building portfolio’s complaints, violations, mismanagement along with the pollution production.

The complete 25 page document may be accessed here.


Stop Work Orders? Fuggetaboutit!

Although there was a Stop Work Order in effect at 102 West 86th Street, this did not stop Rick Eisenberg and company from building an exterior deck on the roof of the 2nd floor rear apartment and converting a window into a full-length french door resulting in a “change of use” (from roof to deck) and a “change in egress” (from window to door) in a landmark building, no less. Construction permit? Fuggetaboutit!

Although many complaints were filed with the DOB, and an inspector actually was able to view the deck as witnessed by a tenant in the building, the issue is closed on the DOB web site claiming they were “unable to gain access”. Hmmm…..Actually, it’s really astonishing to note the low ratio of complaints to violations in many of their buildings.

Meanwhile, here are some pics of the deck construction which was built by a small army at an amazing pace within five days between May 8th and May 13th, 2008:




This is the same building that recently converted two apartments on the top floor into one apartment so that it would no longer be governed under rent stabilization rules. Cute!

Let the Brockholst Children Breathe Lead Dust

According to a NY Times article by Christopher Gray on January 2, 2000, Marcus Retter and his father-in-law, Charles Rosen a/k/a Chiel Rosenblatt, bought the 1890 Romananesque revival building at 101 West 85th Street, called the Brockholst, in 1956.

Although this was another building with a Stop Work Order, a complaint was filed on May 12, 2008 regarding an illegal renovation of apartment #4 on the 5th floor. Another surprise is the fact that there is no Complaint Disposition/Inspection History by the NYC DOB.

Meanwhile, Richard Eisenberg’s General Contractor, Eliot Gans, officially filed for a permit on June 18, 2008 to renovate apartment #5-4 as follows:

Here is what the dumpster in front of the Brockholst looked like on July 9, 2008:



Wow. The overflowing dumpster would seem to indicate a full “gut” demolition/renovation rather than what was filed. Hmmm…..

Meanwhile, the dust and debris in the building was unparalleled, not to mention the dislodging of vermin (waterbugs, mice, rats) formerly living behind the walls, and made it all the worse for children and numerous dogs and cats who live in the building.