A portfolio of 14 apartment buildings in Bronx foreclosure lists was acquired recently by Omni New York, a Manhattan-based development firm co-owned and co-managed by Maurice Vaughn, former first baseman of the New York Mets.
According to New York Mayor Michael Bloomberg, the sale of the South Bronx buildings to development firm Omni is a winner for Bronx residents and the city of New York because Omni has proven its commitment to affordable housing development in New York.
Omni has already allocated around $1 million for initial repairs on the 14 buildings. Over the past five years, Omni has purchased and rehabilitated 2,937 affordable housing units across the state.
The 14 deteriorating apartment properties were originally owned by several Ocelot Capital Group entities, which purchased them for $36 million during the boom with a loan from Deutsche Bank. Later, Fannie Mae acquired the $29 million Ocelot loan from Deutsche.
Meanwhile, Ocelot failed to complete needed rehabilitation work and later defaulted on mortgage loans secured by the buildings. Fannie Mae also soon discovered that the Deutsche mortgage loan it acquired did not meet its mortgage underwriting standards. The mortgages went into Bronx foreclosure lists in March this year.
Omni acquired the 14 buildings, which consist of 416 apartment units, from Deutsche Bank and Fannie Mae, at a discounted price. The mortgage debt secured by the buildings was $23.8 million, but the entities did not disclose the final selling price.
Vaughn said that he is thrilled about his company’s success in bidding for the properties. He added that the selection of his firm proves the strong record of Omni in preserving affordable housing in Bronx neighborhoods and in other parts of New York.
To prevent other property deterioration cases like the Ocelot apartment buildings, the city council of New York created an entity called Predatory Equity Task Force which will monitor buildings in financial difficulties. The building task force will be co-headed by Erik Martin Dilan, who chairs the Housing and Buildings Committee; City Council members Annabel Palma and Inez Dickens; and Rafael Cestero, commissioner of the New York City Department of Housing Preservation and Development.
According to the HPD, the city has spent over $1.3 million to make hazard-prevention repairs on the 14 apartment buildings so it now wants to prevent similar expenditures in the future.
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