Grubstakers - Episode 73: John Arrillaga Jr. & Sr, Douglas Eisenberg and how A&E Real Estate ruins NYC

Episode Date: June 11, 2019

On this week we cover some of the billionaires that make New York city unlivable. From using mob tactics to detenant buildings, and charging more for amenities that were court ordered, as well as the shady practices of real estate moguls of New York city who have taken advantage of all legal loopholes to make as much money possible. If you enjoy this episode consider joining our Patreon where we will further discuss how landlords continue to ruin the lives of upstanding citizens.

First they think you're crazy, then they fight you, and then all of a sudden you change the world. Berlusconi flatly denies that any mafia money helped him begin a start in the dynasty. I have always had a thing for black people. I like black people. These stories are funnier than the jokes you can tell. I said, what the fuck is a brain scientist? I was like, that's not a real job. Tell me the truth. But anyway.

In five, four, three, two. Brooklyn Calling, Brooklyn Calling. It's Grubstakers, the podcast about billionaires. I'm Sean P. McCarthy. I'm joined here by everybody I know. Steve Jeffries. Andy Palmer. Yogi Poyle.

But so New York City real estate billionaires, and I think the way we're going to divide this is essentially on this, the free side. We're going to talk about, you know, general to talk about general Brooklyn, Bushwick landlords. We're going to talk about the people who really benefit from the podcast boom. All right. The people who actually own the property that the podcasters live in. And then on the premium side, we're going to talk about Stephen Ross, which is more like luxury development, like what's going on with Hudson Yards. And I think that'll give you a pretty good overview of essentially what's going on with New York City real estate.

And I guess we should just kind of start this by mentioning that there's over 89,000 homeless people in New York. And the amount of people who are evicted... Yeah, no, that's really sad. But here's something important. So on the last free episode, I said we're going to do a poll about the drops. That's right. And so far, I mean, I haven't read all the responses, but the one I did read said drops are good, but don't do any more Mario impressions.

That's right. I heard that. I saw that too. Until we can get the accent right. And I just want to say, while I appreciate your opinion, we were trying to do Jewish Mario. That's our cop out? Yeah. So we weren't trying to go like pure Mario.

Well, let's hear your pure Mario. We were trying to do chosen Mario. Just so the listeners know that we can do a pure Mario. You got a pure Mario for us, Andy? Well, I think we've lost that fan for life. I think that's what's going on now. Oh, shit. He's lost that fan for life. I think that's what's going on now. Oh, shit. He's a Patreon fan, too.

I'm just trying to imagine how angry that person would be if we had left in the other 20 minutes of Mario impressions. What they don't know is it was about an hour of Mario impressions that we had to cut back for you, the listener. That's actually how we talk to each other when we're not recording. But yeah, and it is... Well, I guess we should just mention, you know, we do the drops, I think, as a service to our listeners to keep the podcast

from going mainstream, to limit our popularity. Because I was thinking about this today. That's what I was foreshadowing with The Clash. Well, I was thinking... We're punk rock. Yeah, you know, like when I was doing stand-up comedy in Seattle, you know, Marc Maron came out and he, like, recorded his album, Final final engagement which i think is a funny album and he did it to like a

half full room you know nobody nobody knew who he was and then of course he has the podcast and he becomes successful and it's like as a fan part of you is like i'm so happy for that guy he was so talented you know i'm glad he got some success but then the other half of you is like why are there so many fucking ad reads on this podcast now? Like, yeah, tell another story about your cat asshole. I don't care. Why don't you drown them so that you have some sort of story that's interesting, you know? Sean, just because you and Marc Maron performed at Giggles to half-filled audiences doesn't mean you're going to be the new Marc Maron, okay?

I think you're being a bit generous to Sean's audience. But I'm just saying, you know, maybe among some of our fans, there's some concern that if we get, you know, like true mainstream success. I don't think anyone's concerned about that. We might become some sort of blowhards or not have the engagement that we currently have with our wonderful fan base. And we just want to assure you that you are right. My wife. So that's why we have Andy on the drops.

My wife. On days where he did not take his medication. My wife. My wife. Really destroy the informational content and the engagement that drives this broadcast. We all take turns not taking our medications and having to turn on drops. Listen, as our listeners should know,

one day a billionaire class and their lawyers will be listening to this show. And if we don't subjugate them to the purest of the purest trash... My wife. How are we going to win the war against the elite, ladies and gentlemen? How?

Now, this podcast is on the way up. We're 10 minutes into the episode and we haven't even said who it's about what i like is that we've been doing this so long that we have a drop of jeff bezos saying my wife and he doesn't have one anymore but he did when we started my wife that's the power of the show ladies ladies and gentlemen. Grub Stakers, breaking up relationships and billionaire classes since 2018. As we kind of mentioned here, this side, we want to talk about

a company called A&E Real Estate. A&E Real Estate is called A&E Properties. Not to be confused with the place where you can find censored episodes of The Sopranos. I'm telling you, these stories are funnier than the jokes you can tell. A&E Properties is, according to The Real Deal,

as of 2016, it's New York City's fifth largest landlord. They own over 117, up to like 200 by another estimate, somewhere in that range, different buildings, with over 8,832 residential units. That's as of 2016, and that's a minimum estimate based on public records. Now, before we continue with that, I do want you to finish your point about the 89,000 homeless people in New York City. Well, yeah, I was just saying, like, when we talk about housing in New York City, we should start with that fact. There's 89,000 at least homeless people here.

That's weird because you don't see them. The number of people who are evicted every day, depending on your estimate, New York City DSA said it was 100 every day, but I found a guy who's a TED fellow named Yale Fox. He estimates 206,000 evictions every year, which would be 564 people evicted every day. And just to add another crazy stat to that, there's, according to Ocasio-Cortez, there's three vacant housing units for every single homeless person. Wow.

In New York City. Yeah, I mean. And it checks out on Politic Fact. Look it up. Yeah, but. Well, they're just waiting for that market rate to go up.

That's just smart business. Yeah, I think we've probably all seen an eviction taking place at some time. Oh, yeah. I know I have.

Like, well, no, really just walking around Brooklyn, like you'll occasionally see like three or four police officers. No, I have those. And like sometimes

they wear like literal riot gear. Really? Yeah, like they have a shield and uh sometimes they wear like literal riot gear really yeah like they have a shield and everything while they're evicting somebody disgusting now steve you say there are three vacant apartments for every homeless person but where else are those chinese communist party officials going to park their bribe money um but yeah i mean it is just something where uh oh yeah and by one estimate a conservative estimate every eviction costs like five thousand dollars as far as court fees and all that stuff whoa the rich staying rich cost the poor money and you know this is like a 1.03 billion a year

from dna info it was paid by the taxpayers just to evict people and throw people out on the street when we have all these homeless people. And, you know, so. You want to ask something crazy I was reading? Yeah. There is a both a rising fascist and socialist movement in the United States. What? You know, I bet I bet it's Tucker Carlson that's driving that. But so when we talk about any real estate,E real estate, I wanted to start there.

I'm sorry, A&E properties, it goes by different names. But I wanted to start there because we mentioned it's the fifth largest landlord in New York. But it's also a recent entry. They only existed since 2011. And their strategy for becoming the largest, fifth largest landlord in New York has been essentially buying up units that have either rent stabilized or rent control tenants and illegally jacking up their rent or kicking them out or using various shady tactics to get them out. And so I should probably say the names here of the billionaires on this episode because there's four of them. Because essentially, A&E Real Estate was founded by the children of two other real estate billionaires. Surprise, surprise.

The father, John Ariliga Sr., his son, John Ariliga Jr., the father, Philip Eisenberg, his son, Douglas Eisenberg. Four different billionaires we're covering today. Apple doesn't fall far from the tree. And they all ride a white horse a red horse a black horse and a pale horse but i but i think like just kind of my central it's a four horseman of the apocalypse yeah i got it i got it took me a second i i think my central point today is essentially um fail sons and daughters get too much of a bad rap because essentially if you just like inherit a bunch of money

and then just like sit on your ass and like smoke weed and post on Instagram, like you're not really hurting that many people. And if anything, you're actually propaganda against capitalism because people can point at you and say, oh, they don't do anything for their money. But the people who actually like go into the family business and are like, hey, how do we get these rent-stabilized people out of Harlem? Because I don't want to be a fail son. I want to be the guy who builds my own real estate empire.

They're the ones who do the most damage. And that's why you never make father proud. Yes. Shout out to all the children of billionaires whose parents are very ashamed of them. We recognize you, and we think you get an unfair rap in the left community. That's why I never went on the offensive

against Wyatt Cote. I was like, he's drawing shirts. Exactly. He's coloring. Good on him. You're right. We did bully that poor fat man and his kind of...

Man is kind of generous. Man child? Yeah yeah big boy it's kind of entry level design taste his fucking uh uh what do you want to call it uh let's not fat shame him either hey i know this question's a little vague but what industry do you think is dirtier real estate or show business real estate well all right the the voter union was i mean it's like there's a lot of overlap because essentially like people who get family money doing really horrible shady shit inevitably their children go into show business right you know because it's like who can afford to sit around and fucking write packets or write a screenplay or a book or uh you know film, film movie stars

aren't sending fascist goons in body armor to force people out of their homes. Well, some are. I mean, like, yeah, I don't think I'd make a case against, or I don't think I'd make a case for show business being worse than real estate,

except for the notion of the propaganda like show business proliferates. But that's neither here nor there. Real estate directly is bankrupting individuals and literally stealing the roofs over their heads to benefit people who have enough money and as many roofs over their head as they've ever wanted. And Weinstein literally was sending fascist goons to attack people he raped I'm not gonna say he's not overlap right

right that's why I asked the question because I just figured it like I mean they're both clearly dirty but it seems to me I mean especially because our lovely president comes from a real estate empire as well that the realist show business uh-huh that's right so it's like you know the two trees of the death of the world are real estate and show

business. Someone should do a podcast about that guy. Nah, too soon. You know what Wyatt Coke's shirt styles remind me of? Default WordPress templates. Got some real just above GeoCities energy there, I think. Yeah, I think so. The default WordPress templates aren't that bad yeah you're right i'm i'm being unfair to them and we're being unfair

to wyatt coke but but so i guess that's kind of my point here and so you know there's a lot of different places we could start this but it should be mentioned you know why we're kind of talking about new york real estate is that right now the new york state legislature is debating a bunch of bills including like good cause eviction and some other things that are being pushed by New York City DSA and other housing organizations and it should just be noted that the Albany New York State Legislature session ends June 19th so if these bills are to are to occur obviously developers are fighting very hard against them and there will either be movement or not movement there by June 19th. So it's just something to keep an eye on.

And I guess we can talk more about those bills if you want to or we can circle back to it. No, it's not going to be. So like right now there's nine different bills. Well, before that Can we afford a destiny's child drop do you think well we can't afford any of them but we can try and hold off for now uh the the rent control laws are set to expire unless they re-up them uh thankfully that is obvious that's absolutely going to happen but there's actually seven additional bills nine total one of which is um to make it so you can only get evicted under good cause reasons like

the the landlord can no longer just evict you because they you can't afford the rent that they raised more than 20 or something like that so that's that after you have to have actually just like flagrantly violated you know the building code or something that's the uh why is grub stakers recorded in a different apartment now bill yeah and so it um the big news right now is the new york state senate uh announced they do have a like a progressive coalition that can pass all nine and so they plan to do that and send it to the assembly the assembly is controlled by uh the speaker carl histy um he's on record as supporting all of these things but only in previous years

when there was no chance of doing it and so now he's kind of like dragging his feet on it because he doesn't he wanted to actually present himself as a progressive champion he's like oh shit now it could actually happen i have to actually no make good on these things yeah but um this is this is still the it's still largely the assembly that um summarily passed single-payer health act for new york oh really for like six years running now i think um again because largely because they didn't think it would ever happen right but um the situation has improved there that's good so it's actually a lot of good news right now a lot of good energy well so and there was a story in gothamist which essentially said a and e um and i think Blackstone and one other major landlord player was meeting with housing

advocates back in March 2019 to essentially just try to come to a compromise to avoid like good cause eviction so it's like very clearly you know if the developers are sitting down with the housing advocates they're very nervous that something serious could happen to disrupt their bottom line so we'll we'll we'll see if if comes, and maybe we'll follow up on it. But for now, we just kind of got to cross our fingers. Now, I read that these nine bills were written by Dante there. Limbo, lust, gluttony, greed, anger, hearsay, violence, fraud, and lastly, treachery into the center of hell, which is Hudson Yards.

That's what I heard. Bob Dole. What's the name of that structure that's in the middle of Hudson Yards? It's not technically named, but it's now being called The Vessel. The Vessel? That's like the center of hell. Right, right, right. We'll be discussing The Vessel and many more Hudson Yards things on our patreon episode under the paywall I like to

think that eventually I had assumed its name was multiple dead construction I think at one point we'll do a drop and it's like instead of boomer lives it's just the drops live did you know that the seven deadly sins are one of the most powerful caucuses in the New York State Legislature? I mean, a few of them got voted out last time around. Yeah. They'll come back in.

Yeah. It's a great anime, too. Gluttony was briefly shut down by the health department because they didn't pay their bribes got too greedy yeah um but so i guess uh we'll kind of talk about any real estate and these four billionaires we mentioned uh maybe we'll truncate the biography a bit just because partly because there's not as much information but partly because it's like i want to kind of focus on essentially the abuses here of course something that i wanted to start with is essentially this article from the real deal which is a real estate um uh website newspaper magazine uh the real deal wrote in june 2016 uh one of the more uh let's say chilling

articles i've read in my life called an insider's guide to evicting rent stabilized tenants and um and so we kind of mentioned here, A&E Properties and some of these other major landlords, what happened was in the 70s and 80s, there was a major affordable housing building boom in New York, primarily fueled by 421A, a property tax exemption. What was that called again? 421A.

No, no, before that. What kind of boom? Affordable housing boom. affordable housing boom affordable housing building boom yes could you say that again affordable housing building boom now could you say it five times fast i like how people are already complaining the episodes are too long um but yes there was. That's okay. So yes, what happened was, you know, people might know the story. There was in New York and other cities flight to the suburbs in the 60s, 50s, 70s. So what New York and other places did was they said, hey, we will give you giant property tax exemptions to build affordable housing in New York, in the city itself.

And, you know, you don't have to pay taxes. And then the feds do the Section 8. So now people get help with their rent. So there's this affordable housing boom in the 70s. But now we're back up to today. And what's happened today is... Don't crock has been ruined. Yes.

Suburban flight has been reversed. And now everybody wants to live in New York. So you have all these affordable housing buildings from like the 70s and the 80s that were built with all these property tax exemptions, but you suddenly have all these, you know, Bushwick gentrifiers who want to live in them. So if you're a real estate developer... Now, where did you first move

when you got to New York, Sean? Hey, you keep saying suburban flight. You mean white flight, right? Yes. Yeah, all right. Yes, but this is a class first podcast. But yes. So,

So, Burman flight sounds like a flight to Pasadena. This is a scheduled flight. Yeah, right, right. It's a NYU improv group. This is white return.

It really is though. Yeah. I mean, the, you're like, I mean, the... They just collectively went, it's safe now. Part of it was also that, like, after World War II and the GI Bill, there was kind of a project where they're like, oh, we don't want all these, like, former soldiers kind of bunched up together in the cities. And so they kind of pushed people into homeownership to kind of disperse it to kind of water down potential like class unity and that sort of thing. Armed insurrection.

Yeah. Because it turns out when you have a lot of people that know how to use a gun and fight together. Yeah. A lot of like former soldiers. They'd seen in other places that they had been recently that when you have a lot of like veterans who end up in economic dire straits, strange things tend to happen. Anyway, it's the 75th anniversary of D-Day.

They could have killed the American Rosa Luxemburg. These fucking PTSD veterans coming home from war. Yeah, they didn't want to concentrate concentrate them in the cities um and so you know there's a variety of reasons but essentially what i was talking about with a and e properties is and these other similar developers is like okay so now you have this building built in the 70s or 80s that's full of you know rent stabilized or rent regulated tenants so how do you make money on it? Well, you do a giant overpay for the building that only makes sense if you're somehow going to get rid

of these rent-regulated, rent-stabilized tenants. So recently, how to get rid of those tenants has been a big, especially since the 2000s, going up to today, it's been a big concern of landlords, and they've deployed a bunch of different tactics, which brings us to an insider's guide to evicting rent stable as tenants. So,

I'll just start from the beginning. Careful when you go outside or some tenant group will bust you. A young real estate professional with a Gordon Gekko-esque hairstyle joked inside the men's room. Bazinga! They don't have to, a colleague fired back. They've got de Blasio

And they're of course saying the mayor Bill de Blasio is a famous Tenants rights activist, which is why he's Signed all those deals With developers to give them Massive city subsidies to continue Buying rent stabilized One dollar for a hundred years

Rent for the Brooklyn Armory to turn it into condos. Supporting the Amazon deal. But the thing Sean is mentioning is the reason why the billionaire class has taken hold of the real estate market. The only way that you can potentially profit from this is to hold onto it long enough to where the land value and the areas around it are gentrified to a point to where somebody's willing to pay more for it. And to do that, you have to do it at a massive loss.

Hence all of the vacant buildings. Precisely. And, yeah, I mean, so much of home prices are just environmental. They essentially have an option value. Oh, really? So it's not as easy of a story as supply and demand. Whatever the vacancy rate is, that's pretty much like your weather vane on whether home prices will rise or fall. It's not that simple.

So you have a lot of things to consider, such as what City Hall is doing. Now, wait a minute, Stephen. I watched a video by this guy named John Stossel, and he interviewed a developer. And this developer seemed to believe that just letting them build more would fix the problem. And I was convinced. Yeah, no, I think I heard something like that on Reddit. But so just continuing from the article. Oh, yeah, they tell the jokes.

The article continues. Such was the mood after Michelle Marato Itkowitz, a well-known landlord attorney, concluded an extraordinary speech titled Tenant Buyouts, The Next Generation. I prefer Tenant Buyouts, Deep Space Nine, but to each their own. At Terra CRG's Only Brooklyn Real Estate Summit Wednesday. And then it says, the lecture centered on strategies for how to, quote, detenant occupied... A search for peace.

They originally were going to write out the main landlord and tenant buyouts the next generation. And they had them be assimilated by a tenant group but but then in between seasons they were able to work out the contract so so they rescued him that's okay but uh so it says the lecture centers on strategies for how to quote detenant occupied and rent stabilized buildings um And then it says... The way they say detenant, it sounds like you're like, okay, so in the bottom of your apartment complex,

you want to set up what looks like showers. They just look like showers? They look like showers. Also, it's very important that they're soundproofed as much as possible because there's going to be a lot of screaming. A lot of death metal going on down there, I'm presuming? Yeah, death metal.

There is some metal. Here is some. Okay, so now we're going to talk about how to detenant using what we call incendiary devices. It does sound like tenets are a pest. Yeah.

We've got to detenant the place down. Put a tarp up, gas the place, call it good. That's what the Royal Air Force did on Dresden. They were detenanting it for luxury developers. That's the World War II scandal they don't tell you about, is they were doing those fire bombombings to clear out the tenants so that those neighborhoods could be gentrified. Yeah, but the techno scene now.

Nobody talks about all that money Arthur Harris took from the developers. But so, yeah, and so Itkowitz began with some corny attempts at hipster jokes about urban outfitters in Williamsburg. Oh, man. Including this, Jim. Quote, why do hipsters like ice in their drinks so much? Why? Because ice was water before it was cool. I wish I could say that.

I have never bombed in Williamsburg. But I have to say that this ice is cool joke, man. Pretty piss poor, if you know what I mean. Pretty piss poor. See, the joke is funny because hipsters live in the places that people who used to live there now have to live in Camden, New Jersey.

If not further out. Yeah. So wait, they still like the ice now that it's even more cool? Yes. But wouldn wait they still like the ice now that it's even more cool Yes But wouldn't they just like the ice Before it's cool Yeah they would like the water

Because speaking from purely physics Ice that is cooler would just be Thicker ice Yeah yeah like wouldn't you say You know why hipsters like water Because they like ice before it's cool You know Andy you and I, moderately professional comedians, are really doing a great job taking down this joke.

I'm more just distressed that these developers clearly don't understand the demographic they're selling to. Plus, the joke is, why did the hipster burn the roof of his mouth? Why? Because he ate the pizza before it was cool. That is a slightly better joke, Andy. burn the roof of his mouth. Why? Because he ate the pizza before it was cool. That's... I mean, that is a slightly better joke, Andy.

I'm not saying that if Sean said that earlier I would have been like, ooh, good joke, but better than that ice-cool nonsense. Yeah, no, this... I'm just...

This developer needs a writer and... And they should hire us. And I'm sick of my job. Yeah, hey, so... Sorry, you guys. Andy left the podcast. He's going to punch up jokes for the scum of the earth.

I didn't say I was going to write for Fallon. Are you going to headline the next real estate developer conference? No, but I'm going to write for the guy who is. Andy's punch up notes are just other drops. Be a corporate comedian for real estate. Okay, now you want to work on something about the Holocaust. But like make it more general. Like make it about genocide.

You don't want to sound too much like Sean. Here's my impression of the rent-stabilized tenants in your buildings. There's lead paint in the building. Whee! Andy's just killing for like an hour. He's like the Chris Rock of real estate conventions. Oh, my child's deformed because of the water. You guys ever notice when you detent in a building?

Not only do you have to repaint. How many of y'all love detenting in a building? You ever notice white landlords detent like this? But black landlords be like, just get the fuck out of here. Just get the fuck out of here. It's more efficient. Excuse me. Could you please move out next month? I'm a white landlord.

You know, there's two kinds of rent-stabilized tenants. Oh. Oh, my God. I hope we could even get to the bio here but this article oh man uh so the so the uh it kowitz the the landlord attorney she continues she says things have changed in the last three years she's speaking in 2016 and she says tenants understand implicit implicitly even if they live under a rock that there is value for their rent stabilized apartments it's not a secret anymore and so essentially she's talking

about how recently tenants have been organizing into tenant associations uh you know contacting lawyers filing lawsuits all these other different tactics um so essentially tactics that landlords were using they have to adapt because they would be doing shit like harassing people, taking people's front doors off, you know, to try and get them out. And, you know, she's essentially saying these kinds of things don't work anymore. Wait, so she's saying they can't take that. Even if you take someone's door off, they're like, yeah, but the schools are good. No, well, she's encouraging people not to do that because it is illegal. Unsurprising. Essentially, she's like, hey, she's encouraging people not to do that because it is illegal, unsurprisingly.

Essentially, she's like, hey, you know how we used to be the mob? Cut that out. Because we shouldn't be doing that anymore. Yeah, and so she's discouraging the use of over-frequent buyout soliciting as well as, quote, the use of physical force, unquote. Which, you know, I mean, it's nice that they've adapted enough that they are now being encouraged to not do that. But so she says anything not nice could be harassment. And a landlord was just arrested for that. And that's a reference to Steve Crowman, whose activities included hiring an ex-cop to intimidate renters and exposing tenants to lead-tainted dust 65 times above the legal limit.

He was sued by the New York Attorney General at the time, Eric Schneiderman. Whoa, whoa, whoa. An ex-cop committed a crime, Sean, in New York City, and they figured out that the lead dust was 65 times the amount more? What, did he have like a fan with just like... Right, right, right. Where he just had a chunk of lead and a cheese grater over it and was just running it into the ducks

okay do it 65 times I'm counting 40 times no no no I got a great heart not 70 we can't afford it 65 he takes out his baton and then dips it in a bucket marked lead and then just starts wailing on the

tennis but so she says beyond dips it in a bucket marked lead and then just starts wailing on the tennis. Um, but so she says beyond direct harassment, a lot of landlords come to her wanting to engage in like frivolous litigation. Like they'll come to her and say like, what, what can I do to sue these people?

And so she's saying like, if you're asking me that probably not much, essentially landlords are like trying to find frivolous lawsuits and she's saying no frivolous lawsuits can also be considered harassment under the law so it is illegal for tenants to to or for landlords to harass tenants with frivolous lawsuits or you know bothering them and these sorts of things still happens but it is illegal but so essentially what she says and this is 2016 she says now let's talk about something that actually moves tenants out of the way if you have to get to that point.

There was a news item a few years ago about a landlord who was found murdered in a dumpster. And it's kind of alarming that they're not. They asked, how do we not be the guy who gets arrested? But not enough of them are asking, how do we not become that guy who was murdered in the dumpster? Uh, Mike Racine, uh, the sit down podcast had a joke.

Um, just leave them there as a message to the others. Um, you know, as reactionary as, um, uh, the,

uh, New York Post is, they got a lot of undue shit for their headline, Who Didn't Want Him Dead? What year was that when that happened? It was like 2014 or something. Gotcha. But so, yeah, the lawyer continues. Now, let's talk about something that actually moves tenants out of the way, if you have to get to that point. She said, transitioning from the don'ts to the do's.

Quote, demolition eviction, page 23. And she's referencing a pamphlet that she gave out for her speech. And then again. Whoa, whoa, whoa. Page 23 is a pamphlet? Well, a booklet. Yeah, all right. Okay, yeah.

Clearly, these are real estate developers. I assume they're paying her a lot of money. Sure, sure. I'm just saying. She can get 30 pages printed. I'm just saying, there's no such thing as a 23-page pamphlet. That's just not. You are correct.

I'm apologizing. It was more of a zine. DIY space. Fucking delicious. It's like. Yeah, we handmade the tools we used to do construction next door. Just kind of do construction at all hours to annoy them and make them leave. This is all fair trade. You know where I got the space to make this zine?

Yeah. I evicted someone. Yeah, now I've got your attention. Yeah, the rat infestation we're allowing to grow, we're feeding them all vegan diets. Fair and balanced. Yeah. Okay, so she talks about demolition eviction

from The Real Deal. A line in the rent stabilization law allows landlord to deny tenants renewals on leases at stabilized apartments if the landlord can show the state they have approved new building plans the money to complete them and agree to pay tenants to reloc relocation expenses in a stipend uh currently many landlords try to evict tenants and clear out a building before proceeding with the demolition and development plan she said but if landlords would just bite the bullet and get it all filed up front, they'd have an easier time getting the tenants out. So you can, that got the audience talking.

So you can do demolition eviction and then evict the tenants, then not demolish the building, quote, asked one man in the audience. There's nothing in there I can see that penalizes you for not demolishing the building, it kkowitz replied. This bait and switch technique is probably fair game, excepting that a, quote, nasty person with a grudge tried to take you to court over it after the fact, she said. This is actually what happened to me. I previously, before I lived in where I currently live,

the landlord, a month before I was going to renew my lease, was like, we need to work on the apartment. And I was like, all right, go ahead and work on it. I don't give a shit. They're like, no, no, no, we need you out. And I was like we need to work on the apartment and i was like all right go and work on i'm gonna shit they're like no no we need you out and i was like why have i you haven't been a bad tenant they're like no you've been great but we just need you gone essentially and i mean like for those who haven't been in yogi's apartment it was a new apartment like it was nice right and like you know nothing against i could afford the apartment so it wasn't like they're like get the fuck out.

You can't pay our new rent rates. And I even was so, because I probably pulled a bad move, but I was like, I don't care what you're trying to pull here. I want to live here. And they were like, no, we need the space. They kept saying that. And in the long run, I probably could have fought it and won. But then I was thinking about like, well, then if I have trouble with my apartment i've got a you know management company that now hates me so you know they they it's i'm damned if i do i'm damned if i don't in that situation and like i'm saying you can probably fight it and win i do know several other people who have had similar situations and they uh argued their way past it

and i probably could have but i just got to a point where i was like listen if my toilet breaks and they're like sorry see you in two weeks i'm not gonna not shit in my apartment for two weeks you know i mean it so it became a dire situation balcony i could have shat off the edge that's true yeah i mean but this type of fucking horse shit is the loo loo loopholes uh land norwich are pulling in new york to kick tenants out they're like yogi we need you out because we know you're going to record an episode about us in a year i think though like if they evict you uh if they do a demolition eviction i think it should be in the law books that you can implode your building you should be able to start early yeah yeah they should you get paid to help them they They have to give you a one-month notice and a sledgehammer.

Did you know for no reason at all, tenants used to light their buildings in the Bronx on fire? I did when I left. I took the highest cupboard I had, and I taped the keys on the top of it. Then when they're like, hey, where are the keys? I was like, oh, I put them in a shelf. You have to find them, when they're like, hey, where are the keys? I was like, oh, I put them in a shelf. You have to find them,

but they're in there. One last time from Itkowitz, the lawyer Andy will be head writing for soon. She says, quote, I like demolition eviction and I just like to see people do more of it, unquote, instead of frivolous and sneaky tactics that lead nowhere.

I don't understand why more landlords aren't doing it. And the last line of this article is she says, I can't help you with lies, but there's enough tools in the truth. Man, what pieces of shit. This is a person that lives in New York? Can we go run up on them, see if they want to be on our show? Well, unsurprisingly, there was some pushback after this article was published. When was this?

2016. We are looking at downtown Brooklyn and I'm seeing a lot of residential high-rises in the evening that don't have their lights on. And I am definitely in the mood

to just get a BB gun and see how strong those windows are. But yes, I do. We'll cut that. I do like that. She is encouraging landlords to find their truth. She can't help them with lies,

but you know, it's self-actualization. She just wants them to be brave. Very important when putting fraudulent demolition notices out to your tenants. Have you thought about moving to the most dangerous part of New Jersey so that I can get some guy with a beard and a podcast in here? One weird trick to inflate Dsa's membership um but so moving on to kind of any real estate and i'm going to truncate the biography of uh john arilaga senior uh because maybe we'll

circle back to him on a future episode what a cruel cruel irony. Yes. Mr. A&E gets a truncated biography. Well, he's the father. And so essentially there was a Fortune article in 2014 called The Secret of Billionaire Who Built Silicon Valley. So essentially the broad strokes of the story are that he was like a high school basketball player. And he grew up in Los Angeles and kind of a middle-class family. Interestingly enough, just from the Fortune article, he played for the San Francisco Warriors, the precursor to the Golden State Warriors. He quit the Warriors after just six weeks,

not because he couldn't cut it on the court, but because he couldn't countenance the way some of his married teammates behaved. My wife. Frivolously sleeping with groupies. What a heart of soul. We talk a lot about, you know, kind of the... That's why I had to leave the NBA, too. We talk a lot about the advantages

that billionaires have had, but we really haven't mentioned the advantages that the white ones who played in the NBA had in the 1960s um but yeah he got a ba in geography in 1960s oh and just like one fascinating thing um his uh daughter-in-law or no his daughter laura uh yeah he has a daughter named laura and uh she said quote other people were compromising values that he held so dearly, unquote. Laura's actually married to

Andre Sen, who's one of the co-inventors of Netscape, who's a billionaire, future episode. Oh, Netscape Navigator? Yes. But I just found it fascinating. His daughter, Laura, published a book in 2011 on philanthropy

called Giving 2.0. Get the fuck out of here, Laura. I like that she made it to Giving 2.0, but her husband's browser didn't make it to Web 2.0. The 2.0 was the percentage of their income they give.

But so, yes. And essentially, what happens is he's working as a commercial as a broker for a commercial real estate firm but in the early 60s he meets a guy named richard peary and richard's peary's uncle uh no richard peary's father had a large real estate portfolio so essentially like i kind of like the way real estate billionaires work where essentially it's somebody's father or uncle is already a real estate billionaire all the way down. Like, you just go back long enough and eventually you get to like the fucking Plymouth Rock people or, you know, the Homesteading Act or whatever.

I think you just get to the Mycenaeans. Yes. But essentially the way he becomes a billionaire is he meets a guy who has a father who's like a very wealthy real estate guy. And they come up with in the 60s, they buy up a bunch of property in Central Valley, which at this point is like orchards and agriculture. And it's the 60s. The semiconductors are just being invented. Oh, suddenly it becomes Silicon Valley. Yes. Essentially, that's how he became a billionaire is they bought up a bunch of real estate

in what would become Silicon Valley and then by luck and good fortune the entire computer industry popped up there because California needed more office space. Of course. Yeah. So that's how he becomes a billionaire and then we move on to John Erillaga Jr., who's just from the real deal.

He's a Northern California native, and he continues to serve as a principal at his father's Palo Alto-based office development firm. He previously worked at private equity firm Apollo Real Estate Advisors, now called Area Property Partners. The later firm aggressively bought rent-stabilized multifamily buildings in Manhattan and the outer boroughs during the mid-2000s boom, but took a hit following the downturn. And when we say mid-2000s boom, you remember the tactics she was talking about landlords not using anymore? They were using them during the mid-2000s. But so the story of A&E Real Estate is this guy's son, John Jr., meets Douglas Eisenberg, who's the son of another real estate guy, a guy named Philip Eisenberg. They related to Jesse Eisenberg?

Yes. You know what isn't cool? Yeah. Real estate. You know what is cool? Real estate law law i like it that's good yeah all right so uh douglas eisenberg is the son of philip eisenberg and philip eisenberg uh it was a principal at uh urban american real estate which um a guy in 2011

actually founded a wordpress blog documenting it how it is the worst landlord in New York City. Wow. And I'll get to that in just one second. But essentially, Douglas Eisenberg, who's the co-owner with John Arriglia Jr., Arilaga Jr., they're the co-owners of A&E Real Estate, now approximately the fifth largest landlord in New York City. Douglas Eisenberg grew up on the Upper East Side in the 1980s. This is from a The Real Deal profile. His dad was a real estate lawyer. His mother headed a summer tennis camp.

Eisenberg attended the Trinity School, an elite private school. He graduated from Cornell in 1993. And then he worked for Mayor David Dinkins. What? 1993. Just then he worked for Mayor David Dinkins. What? 1993. He worked for Democratic Mayor David Dinkins, but he left Democratic politics behind in 1996 and went to Brooklyn

Law School. Focus on oligarchic politics. He felt their betrayals of the working class were too small scale we wanted to take direct action um but so his father practiced real estate law for 14 years before buying buildings himself eisenberg jumped immediately right into the investment game um after previously working for his father's firm and so urban american management in 1997 it was set up for his father's firm. And so Urban American Management, in 1997, it was set up by his father, Philip Eisenberg,

and it buys about 1,000 properties in Hudson County and then kind of spreads throughout New York. And so I just kind of wanted to go through a little bit of this guy's blog. It's nyctenantadvocate.wordpress.com. He stopped posting in 2011, but he was essentially a tenant an anonymous tenant in one of these urban american buildings and he documented uh essentially lots of cases of black mold lack and lack of heat and hot water um a review essentially he just looked through the different reviews people left for urban american uh one of them was about how they didn't fix the toilet for them for a month and the tenant had to defecate in a plastic bag they didn't have a balcony yeah

uh you know buildings overrun with mice bed bugs and roaches hallways that reek of urine massive uh uh rent jumps all right okay okay good you know tenant harassment including threatening phone calls stealing the tenant's mail just all sorts of shit and um it was interesting where essentially what this guy who ran the website did was bill de blasio the current mayor was then the public advocate for new york he docked he they had they have the worst landlords in new york list but which is just whoever has the most HPD violations or whatever. But it's kind of like their methodology is not quite right. Like the warts violations?

The cancer violations? I've been to that list. There's some that are in the tens of thousands. Really? Yeah. Wow. But so essentially, according the the anonymous man who wrote the person who wrote this blog uh thank you josh josh eisenberg was listed as number 85th in all

boroughs but he's only listed as owning one building so essentially he went through at the time and found that urban american owned like 80 or 90 buildings and And he says, after tallying up all of the addresses in Excel, I came up with a grand total of violations for all buildings listed, 4,066. In comparison, the current, quote, worst landlord in New York City has 2,047 violations. And, you know, when we... Oh, so he's like, he's one of those guys hiding everything in shell companies. Yes. Okay. and you know when also he's like he's one of those guys hiding everything in shell companies yes you know i mean and so essentially these uh housing preservation development uh violations

they'll have like class a b and c and like class c is immediately hazardous such as inadequate fire exits rodents lead-based paint lack of heat hot water electricity or gas you're supposed to have 24 hours to correct a class c. Standing puddles of acid. And so in 2011, he found 737 class C violations. Active killer. No, no, no, no. Unknown gunman. No one's dealt with that. Active shooter.

No, that's not a flooded basement. It's an indoor moat. It is a problem. There's your problem. Cyclone B leakage. Leakage. Why was it there? Massive allied firebombing at the building. Some sort of atomic weapon has been detonated.

Minor nuclear meltdown.. Minor nuclear meltdown. Massive nuclear meltdown. There were so many fucking Class C violations at Chernobyl, man. Oh, he also found two Class... Yeah, but now it's a pretty happening area. Like Chernobyl? Yeah, you ever been to a prep yet? Is it gentrifying

you know i was gonna say i'm just imagining the fucking 2030 real estate lawyer is gonna be like nuclear meltdown wow is how we detain it if you read if you read the rent laws closely there's actually nowhere where it says you can't. You can't tell people there's a nuclear leak and then they leave. Then actually you say there was no leak at all. Right, right. You can actually evict people by telling them that there's a meltdown in their building. But you don't actually have to have a meltdown. Of course.

Why would you have to? But you can if you want. So in the rent laws, if people leave because there's a declared state of emergency, it really doesn't specify if they get their rent-stabilized units back. So if you could participate in some sort of nuclear conflict between various world powers. But so all of that is... Oh yeah, he also found two class i violations and a class i violation is someone takes the 9-11 part two someone takes the landlord to court and says the judge says

hey this is a hazard you have to fix it right now and they're still open so all of that you know and i i really do encourage people to look at this blog. Urban American still owns about 6,000 rental units. But the point of all that was, you know, Douglas Eisenberg worked for this company. This was his father's company. And, you know, Apple doesn't fall far from the tree. So essentially, he, in 2011, branches out to start his own company, A&E Real Estate. So Douglas Eisenberg, the son, goes into business with John Jr.

I want to say I'm so glad that there's not a big mob presence in New York City these days. Maybe we'll get to it on the next episode. But, you know, construction unions, I really do think need to team up with the mob again. Because I think luxury property developers have gotten a little too pushy all right so moving along a and e uh they get this deal in 2015 to buy harlem's riverton complex this is from dna info um and they they're supposed to agree to keep its 1 000 units of affordable housing over the next 30 years in exchange they get about 100 million of tax breaks and incentives from the city um but uh dna info reports that a and e was also responsible for more than 2 230 eviction cases between january 2013 and june 2015 according to an analysis by rent logic which makes them the

largest eviction uh landlord in the city in that time period. And essentially, it just kind of goes through all the different bags of tricks they used to evict tenants and these sorts of things. But I wanted to kind of go through just there was another case where they did what's called individual apartment. They were alleged to have done individual apartment improvement fraud. And there's so many different things that you can get bogged down in with kind of the complications in New York rent stabilization law. But one of them is if you make major capital improvements or individual apartment improvements, you're allowed to like bring those buildings up to market as long as you spend X. But so there's this very interesting article in Cranes, New York, which kind of goes through, according to these documents they looked at, A&E Real Estate for their renovations seems to, quoting from them, they seem to exclusively use JW Development Group holdings for renovation

work. City records show JW Development is controlled by Mark Erickson, whose LinkedIn profile identifies him as a senior construction manager at A&E Real Estate. The firm is being sued by tenants in another class action case that accuses it of faking or inflating IAIs to push up regulated rents. So essentially what's happening there is A&E owns this construction company and they're like

hey go do improvements at our apartments and then send us an invoice. And it's like oh big surprise the invoices might just be hugely inflated because that's another way that they can jack up rent. You scratch my back I'll scratch your dick. Right. Yahoo I think is behind this.

The Washington Generals. And, you know, so these various articles just kind of go through different cases, like billing $3,500 for a bathtub that was never installed, and these various, you know, laws. There is actually right now a class action lawsuit ongoing against A&E. There's a lawsuit ongoing against A&E that's seeking class action status. So we'll see if anything shakes out with that. From tenants?

Who's doing the lawsuit? Yeah. Yes. There are dozens of tenants. I believe at least 60 have filed a lawsuit against them. Yeah. Andy, you and I are paying higher rent because they fixed the elevator at our building oh yeah yeah they raised the rent because they had well the elevator

the legally mandated elevator for a more than five-story building was not working and they had to replace it on the order of a judge yeah so our uh annie and i live together yeah i don't know if we can if it's a good idea to let her on the pod whatever yeah it's up to y'all take that take that again i think we got to let them know because you know sean and i used to live together and people were probably like what happened to that annie and i lived together and our landlord um was forced by the court to replace repair or replace the elevator for a five-story building and they did that and they applied for an mci rent increase and they got it well actually this was connect it's actually relevant to the rent control stuff because um all of these landlords are being advised to get all of their MCI rent increase applications in

before the law is expanded. They're assuming that the Senate will prevail. Interesting thing about our elevator that it wasn't necessary. The judge didn't demand this, but it

actually doubles as a urinal. I was going to say, when I lived with Andy, I moved out because sometimes he would bring girls home and then from the next room I would just hear, sock it to me. He was playing drops while he was hooking up with people. Is there a mirror in your elevator?

Yeah. Okay. My old building didn't have one. Apparently you're supposed to have legal grounds i could have sued because of this elevators are legally required to have mirrors in them i don't know exactly why yeah so like in the building that i got kicked out of i was looking at a whole bunch of real estate law and one of them was this notion because my previous building the elevator didn't have a mirror in it and i was gonna be like well it looks like i'm suing you for this elevator nonsense you're to kick me

out. That would have gotten me to stay, I think. I think they would have been like, this guy's willing to sue us over a mirror. It's a tiny mirror in the corner of the elevator, but I guess people have to be able to watch themselves pee. Still technically can. Oh, that's why they have them.

In case you need to pee, it's a bathroom mirror. So you can look at yourself and enjoy that. Other times when Andy brought a girl home, the noises would stop and then there'd be a period of silence and then I'd hear, all right, okay. You have live drops when you bang. And then when he would orgasm, it'd be like, www.blowme.com.

That's the story of the time Andy got hot grease thrown on him. Yeah, trying to meme in real life is dangerous. But I guess just like two things to close out with AE and then we'll kind of continue this discussion on our Patreon episode talking about Stephen steven ross uh but so a and e uh just a freeway steven ross yes according to this um uh according to the real deal uh this class action lawsuit includes dozens of tenants a current informer in 22 different buildings owned by any real estate

they're seeking class action status but apparently the lawyers who filed it filed a different lawsuit against a different developer which as of march 2019 was granted class action status so it looks good like it might actually work but these dozens of current and former tenants um claims that uh a and e just from the real deal a and e regularly misrepresented the cost of improvements to apartments, which allowed the company to raise rents, remove rent-stabilized apartments from the rolls, and charge market rate rents.

I like that the reasoning for it looking good is like, yeah, these aren't shitty lawyers. In one case, from the real deal, in one case, A&E charged a tenant

in a rent-stabilized apartment at 344 Fort Washington Avenue more than double what the previous tenant paid, the lawsuit states, the landlord would have had to have performed $89,000 worth of improvements on the apartment to justify the increase,

and they claim no such improvements were made. And, you know, we mentioned they're receiving about $100 million worth of tax breaks and incentives from the city for buying the apartments in Harlem's Riverton Yard. And, you know, there's a New York Daily... One other thing I wanted to mention is there's a New York Daily News article from 2014 which talks about rents at 217 Haven Avenue, which is an apartment in Harlem.

Or no, Washington Heights, excuse me. And they just quote one tenant. She says, quote, they are evil, unquote. Magda Sheridan is 40. She's holding a copy, according to the New York Daily News, she's holding a copy of a newly issued lease that states that her family's two-bedroom home will now cost $4,035 instead of the previous $2,095.

Fucking leeches. Yeah. And yeah, according to the New York Post, some tenants griped that they were facing increases between 30 and nearly 100%. And this building is protected by the J51 tax abatement, which is, there's an alphabet soup of different tax abatements with New York City and state, but all these are they have to protect some rent stabilized tenants but if they're able to drive the rent stabilized tenants up they can jack the rent up by like 20 percent if they do these improvements if they you know do construction nearby or just do something or they're slow to

repair shit or just do whatever to get the tenants out so it's a horrifying business model and mind you they're willing to raise the rates up to a point that nobody could afford because they will take the hit in the current moment to get the money back in a few years once they kick out all the tenants yeah they may even raise it above what they could get from the tenants they hope to attract right exactly and that's where it's like it's still more profitable. You know, yeah, they literally are making it unlivable because it's fucking... The amount of greed that these individuals have to fucking make a city unlivable for anyone that's making, you know, a minimum wage,

if not fucking three times minimum wage, you can't... Nobody can afford these rates except rich individuals who are holding their money in these properties for the future i mean it's fucking lunacy here rich people are buying places to not live in because it's cheaper to do that than to have your money in the bank potentially if you could make more money in the future i mean like the fucking eight layers of chess and you know goddamn jujitsu here yeah jujitsu just want to get that clear here

it's a lot going on in there oh yeah only in bed style do or die yeah um and i guess one last thing this is about urban american is uh the other his father's real estate company but there's an an article in the... Tai Kwon Do. Yeah, there is. Yeah, he gets it. He's picking it up. Much better food in that neighborhood. This is about urban American management. And this just kind of ties into the general investment thing because we've kind of made this point here.

But essentially, private equity, we've been a running theme on this podcast, and other investments will make these massive, hugely leveraged overpays for buildings that have rent-stabilized tenants. And then, of course, Stephen, you were saying to us that a lot of these investments will actually factor in the lawsuit cost because these investments, there's no way they can actually be profitable if the rent-stabil stabilization tenants in the building stay rent stabilized. That's right. A lot of the companies involved in this end up having to take out

very expensive legal liability insurance plans just to deal with this. It's sad. Yeah, it's fucking tragedy. It's just like trying to figure out the insurance actuary tables on like poisoning people with lead. But so this is an American Prospect article, I believe from 2007, but it deals with Urban American, which is his father's company. It talks about this building on Harlem's 125th Street. It's like four different, yeah, in 2007 they buy this building called The Miles. And just an interesting thing that's going on here

because obviously there's rent stabilized tenants. According to American Prospect, Urban American paid nearly $1 billion for more than 4,000 apartments, about $232,000 each. And that's triple their price two years ago. And this is like right before the market crash 2008. So essentially it's like, you know, if you're tripling their price in two years, very clearly something shady is going on. But what I found interesting was the New York City's pension funds had a $150 million stake in this. So something you will find

with these really horrible real estate buyouts is that pension funds and worker retirement does get pushed into essentially destroying the lives of workers in the city. And just from the American prospect, the building, The Miles. An increasing number of apartments in The Miles with skyline views and a $1,600 a month price tags are vacant. Most of the remaining tenants are old-timers who rely on federal rent aid.

The windows, original to the building, bring in energy-sucking drafts, but Urban American won't replace them. A former community room now serves as storage for appliances, and the hall outside smells of urine. Tenants buy their own bathroom fixtures at Home Depot because the standard issues don't work. A fire last year killed an autistic teen. Wow. The issue is not that they're incompetent slumlords,

says Benjamin Dolchin, executive director of the Association for Neighborhood and Housing Development. These are the most sophisticated managers in New York City real estate, and it's their sophistication that makes them dangerous. And so it's just something where it's like, you know, you might think that neglect or incompetence is behind a lot of the fact that many New York City buildings are run down, but it's no. This is a very systematic investment strategy by some of the smartest minds on Wall Street figuring out how to displace people, how to drive up that $89,000 homeless number

and make themselves a profit on the backs of fucking people who have no place to stay and nothing they can do about it. Right. Yeah. So, you know, watch the New York State Legislature and hopefully some of these bills are able to pass and, you know, watch the New York State Legislature, and hopefully some of these bills are able to pass.

And, you know, I don't know. If you live here, call your state assemblyman. Or don't. It doesn't matter. Or actually do, though. The ever-optimistic Sean McCarthy, ladies and gentlemen. Hopefully all nine of them pass. But, yeah, call your state senator.

Call your assembly person. Or just like, if you could start some sort of fire in the lobby. If you can't do any of those things, though, discharge a weapon in the middle of your neighborhood at night to drop home values. Yeah, it works. Those are heroes. Whoever's doing that near where I live, thank you. If you see sort of... Oh, wait, people are starting fires at midnight? No, no, no. People are discharging firearms.

Oh, nice. Yeah. There's some hero in our neighborhood. Nice. Yeah. The Second Amendment lives for him. Yeah, yeah. Or her. Yeah, big fan. That's right. If you see some sort of unoccupied dumpster And you know a landlord you'd like to put into it

Nobody talks about the vacancy rate For dead landlord bodies In New York City dumpsters But I think this is a crisis Well what people don't talk about Is the rent of the dumpster $1,500 a month So he was left there

But he paid for it That's a $428 abatement, tax abatement. Did you know that there are three vacant dumpsters for every landlord in New York, people? Fucking Russian money. All right, anything else?

And with that, this has been Grubstakers. I'm Yogi Pariwal. Hey man, who's that cat coming down the street? I don't know, but it sounds to me like that's Wicked Man with the Bone.

Sure having himself a ball. Steve Jeffers. Andy Palmer. I'm Sean McCarthy. Thanks to our patrons. You allow us to do what we do. We're going to continue this discussion with Stephen Ross and Hudson Yards Development on the Patreon side. Thanks for listening.

Bye. Bye.