New York City is entering the legal fray over Joel Weiner’s Pinnacle Group.
Newly inaugurated Mayor Zohran Mamdani, along with Cea Weaver, a tenant organizer who joined the administration as director of the revived Mayor’s Office to Protect Tenants, announced the city would intervene in Pinnacle’s bankruptcy case and Jan. 8 auction. The case could shift control of 5,100 rent-stabilized apartments across 93 buildings.
Weaver told the New York Times the city was looking to ensure the new owner would pursue repairs and compliance with rent-stabilization laws.
The firm placed the buildings into Chapter 11 protection in May, after lender Flagstar Bank moved toward foreclosure on over $600 million in debt.
The portfolio spans Manhattan, Brooklyn, Queens and the Bronx, making Pinnacle Group one of New York’s largest landlords. The mayor’s office said the buildings have been the subject of more than 5,000 violations, 14,000 complaints across 83 buildings over the years, and owed money to the city.
Pinnacle has argued in court filings the properties were compromised by a combination of factors, including high leverage, rising interest rates, increased operating and repair costs, and limits on rent growth imposed by New York’s rent-stabilization laws.
Weaver brushed off the landlord’s claims, telling the Times that the firm has a “long track record … of egregiously treating renters in their buildings” before the rent laws were passed in 2019.
The company “relied on pushing people out of their homes and rent hikes that were untenable when you consider the affordability challenges that our city has,” Weaver told the outlet.
The move kicked off Mamdani’s time in office after a campaign that promised a four-year rent freeze for rent-stabilized tenants, a crackdown on bad landlords by revamping the Office to Protect Tenants, and exploring options for the city to take control of distressed properties.
The city’s intervention in the Pinnacle bankruptcy would aim to enforce rent-stabilization laws and ensure any buyer is held responsible for fixing long-neglected building conditions, Mamdani said. He framed the case as a test of his administration’s commitment to putting tenant safety and habitability ahead of distressed landlords’ financial restructuring.
The move came days after Summit Properties USA made a $451 million stalking horse offer to acquire the 5,100 distressed units.
The bankruptcy paused foreclosure actions while the properties are marketed for sale under court supervision. Any sale would have to be approved by a judge.
—Rachel Stone
