Limited partner fights HPD takeover of ailing 171-unit Mitchell-Lama in Astoria

By Adam Pincus

At least one heir to a group of limited partners in a 171-unit 1970s-era Mitchell-Lama project that is reported to be in disrepair sued in state court yesterday to block a takeover of the complex by the city’s Housing Preservation and Development. The petitioner is “representing a majority interest of the limited partners,” but is not identified by name in the filing.

HPD is seeking a change in ownership because of what it says are deteriorating conditions in the complex called Bridgeview III, located at 8-10 12th Avenue in Astoria. The eight-story elevator building was constructed in 1972 a has 167,310 square feet.

In 2015, according to a city 2019 loan memorandum, the property owners issued a request for proposals for a sale or ownership transfer. In 2017, HPD approved a transfer that “incorporated alleged payables in excess of $4 million” to the heirs of the general partners, the suit says. But a transfer has not occurred because “of ongoing litigation by a person with a purported economic interest in the housing company,” according to the loan memorandum.

The takeover is driven by the city’s desire to improve the conditions in the building, and, according to the suit, engage in a new regulatory agreement to maintain the building as affordable. The suit is seeking to overturn an Administrative Trials and Hearings (OATH) decision from July 2020 that blocked the limited partner heirs from intervening. An OATH trial is set later this month.

The city’s Housing Development Corporation in November wrote a memorandum describing a $15 million loan to rehabilitate the complex. The property has paid down a $1.95 million senior loan but another loan with a principal balance of $3.8 million but a deferred interest balance of $10.5 million.

HPD through the city’s Office of Administrative Trials and Hearings (OATH) is seeking to replace the board and the suit indicated the city has the support of the general partnership heirs, but some of the limited partnership heirs objected to the process, and filed the suit. The suit is 718695/2020 and was filed in Queens County.

The limited partnership interests are the heirs of Sheldon Korn, George Turin and Louis Seamon. The suit claims that the general partnership interest of the complex is controlled by another group of heirs, after the deaths of the original general partners, Peter Robert Perpignano, Lillian Eiscñberg and Bernice Einanberg.