View Full Version : Getting Paid to Leave Your N.Y. Home

05-02-2005, 01:22 PM
Apartment 300 G
In New York City, Mike Grabow Wants To Help You Move

By David Segal
Washington Post Staff Writer
Monday, May 2, 2005; C01

NEW YORK Before they meet him, many people assume Mike Grabow is a weasel. They figure he's lying or hiding something, that he wants to snooker them out of their homes. Grabow is used to it.

"I understand why they think they're getting snowed," he says. "Very often I tell them, 'If I received the letter I sent you, I would feel the exact same way.' "

Grabow has sent variations of the same letter a few hundred times over the course of his 29-year career. The gist is always the same: Dear Tenant, I would like to discuss something with you that could benefit both you and your landlord. Please give me a call.

In every instance, the person receiving this letter lives in a rent-controlled or rent-stabilized apartment, which means he or she struck the housing jackpot in the country's cruelest real estate lottery. It is not uncommon in Manhattan to find people paying $750 a month for a three-bedroom spread that would fetch $12,000 a month on the open market. This, of course, drives landlords insane, but there is not much they can do about it. City rules allow only tiny rent increases each year for these tenants. There are about 1 million of them right now in all five boroughs, according to the New York City Housing and Vacancy Survey, and in most cases they are entitled to stay put until they die. Under the right circumstances, the keys to these places, along with the sweetheart deals, can be passed along to heirs.

Landlords desperate to vacate the premises have legal remedies in some cases. But what do they do when war is not an option?

They hire Mike Grabow. It's his job to talk rent-regulated tenants out the door, a feat he accomplishes with a variety of tools -- chiefly, disarming candor and great gobs of cash. Many of the buyouts he's negotiated ended with the tenant $300,000 richer. Others pocketed upwards of $2 million. All they have to do for the money is leave. Sometimes Grabow just finds a better apartment -- one with an elevator, or more space -- and negotiates a sum that covers the higher rent for, say, 10 years. That might be an appealing bargain for someone who is 75 years old and living in a fourth-floor walk-up.

"I tell them, we're going to settle this together," Grabow says, sitting in the conference room of his midtown office on Broadway. His voice is steady, low and reassuring, like a hostage negotiator. "I tell them, 'If we make a deal, you're going to be happy. You're a lucky person. Your life will be better, not worse. If it's not better, you won't sign.' "

In most cases, the initial reaction is something like "Get lost," though the choice of words is usually more colorful. Often, a single buyout will require months of phone calls, face-to-face meetings and letters. It's a process. Grabow gets to know the tenants. He wins their trust. He tells them they are under no obligation to talk to him, that they can hang up on him. And because he says things like that, they all talk to him. When they do, he finds out what they want and then he tries to give it to them.

"There was an old show back in the '50s called 'The Millionaire,' " he says. "You never met the millionaire, who was supposedly named John Beresford Tipton. I don't know why I remember that. You just met his emissary, whose job was to knock on the door of a total stranger and say, 'Hello. You don't know me but I have some money for you. There are very few strings attached. The only condition is that you sign this document saying that you'll never tell anyone where this money came from. You get this money and you simply can't divulge where it came from. Other than that, it's yours.' "

Grabow raises his voice a little. "His biggest problem was that nobody believed him! It sounded like total crap. People were afraid of him. They didn't trust him."

Grabow taps a hand on the conference table.

"I have the same problem."

In Manhattan, there are a half-dozen such "facilitators," as the job is known in the biz. It might be the ultimate only-in-New York gig, since only New York's sky-high valuations, in tandem with its tenant-friendly laws, could produce the need.

Local rent rules are a vestige of World War II-era inflation worries, as well as fears that landlords would take advantage of the wartime slowdown in housing construction to gouge tenants. Most cities lifted those restrictions after the war ended, but not New York. Landlords say politicians have long been kowtowing to residents, and they mutter words like "central planning" and "Soviet Union" when they discuss the topic. Reps for tenants say the rules allow the poor and middle-class to live in a town that otherwise would be beyond their means.

Whatever your position, apartment dwellers here are basically divided into two categories: the fortunate and the damned. The fortunate are those in rent-regulated apartments -- generally people lucky enough to live in rental buildings with at least six units that were constructed before 1974. The damned is everyone else. You can spend $3,200 a month on a mediocre one-bedroom with a view of an alley if it's in a decent neighborhood. It's an ongoing struggle: for tenants, the endless quest for a better deal; for landlords, the endless quest to whisk the fortunate out of their apartments and add names to the list of the damned.

"In every other city landlords want to keep people in their homes as long as possible," chuckles Richard Aidekman, who owns 10 apartment buildings here. "Only in New York is the goal to get them out."

Billions have been made in this town crowbarring tenants out of rent-controlled apartments, through payoffs or eviction proceedings. Landlords have been known to offer $5,000 bounties to doormen who report tenants illegally enjoying the low-rent life. (Typically, it's because the apartment isn't the tenants' primary residence, or they are subletting the place, both no-nos.) One landlord, Aidekman says, sent an employee around to every tenant in a building to announce, "Congratulations, you've won a television! Just write your name and Social Security number here and the TV is yours." Anyone whose name didn't match the name on the lease was sent packing.

The hard cases are those in which the tenant is abiding by the law and the landlord wants to demolish a building to make way for some grand new development. Under certain circumstances, rent-controlled tenants can hold out and thwart the whole plan or at least force landlords to build and renovate around them. It happens all the time. In Manhattan there are office skyscrapers built essentially on top of brownstones, a monument to the intransigence of someone who wouldn't move and couldn't be evicted.

"There are people who simply love the attention," says Andrew Alpern, the co-author of ""Holdouts!," a book about New York's most stubborn lessees. "It's their moment of fame, they're having an impact on the world, maybe they're making the news. There've been a couple of crazy women -- and they're always women -- who just like being courted and enjoy the publicity."

Grabow hasn't met any publicity freaks, he says. Nor has he been forced to haggle with crazy people, which is actually his greatest fear. He has, however, come across tenants playing a game of real estate chicken with their landlords, betting that the longer they hunker down, the more money they'll be offered. A few years ago, Grabow had negotiated all but two tenants out of a building, which a landlord wanted to convert into a loading dock for an adjacent hotel.

"The landlord said to me, 'I've got $1 million for these two. They can split it any way they like, I don't care. But if they want $1,000,010, no deal.' This was after months of talking. So I went to them and I said, 'You've done an amazing job. You got the landlord to put up his last dollar. Doesn't always happen. If you don't believe me and you want more money, you're making a mistake. Can you trust me? That's up to you. I'm telling you there won't be another 10 cents.' "

One tenant said yes. The other thought it was a bluff. The renters stayed put and the landlord ripped out the floors below and built the loading dock underneath.

"They blew it," Grabow says. "Half a million each. The guy who wanted the deal was so livid he wasn't talking to the other guy."

This, according to Grabow, is the only failure of his facilitating career. A New Jersey native and lawyer by training, he has a real estate license and spends much of his time managing properties for a company called A.J. Clarke.

Facilitating is work landlords and developers could handle on their own. Many do. But if the stakes are high enough, they often want a pro, in part because the negotiations are time-consuming and in part because many tenants won't trust a landlord, no matter what.

For every assignment, Grabow must pass an interview during which he explains his approach and track record to his would-be bosses. He gets $3,500 to $7,500 per household moved, plus a bonus of between $5,000 and $100,000 when a project is completed.

So does Grabow actually do right by the tenants he moves? That's surprisingly hard to say. Last week, he called some developers and landlords who've hired him and asked for permission to share the names and numbers of some relocatees. They all said no. ("They don't feel that there is anything to gain.") About half of all deals end with confidentiality agreements and anyway, he added, most tenants are wary of discussing their sudden wealth -- which is taxable, by the way. You hear the same story from tenants' attorneys -- their clients have no interest in discussing their affairs in public. One of those attorneys, William Gribben, dealt with Grabow recently on a buyout and, for what it's worth, he had perfectly kind things to say about the experience.

"No bad blood, no threats," Gribben says. His client, who he said would be mortified to see his name in the newspaper, wound up with $300,000. "The deal went down quickly and there were good feelings all around."

There aren't a lot of good feelings about facilitators like Grabow in places like the Metropolitan Council on Housing, which calls itself New York's oldest tenant union, however.

"We look at buyouts as another destructive tool that landlords use to diminish the stock of rent-regulated apartments," says Stuart Lawrence, a council volunteer. "We prefer to advise tenants to stand up for their rights and understand the value of rent regulations for the community as a whole."

Grabow has a less sympathetic view of rent controls, not surprisingly, but he leaves those views out of his work and presents himself as an even-tempered emissary from the corporate world.

He says he doesn't have any special skills other than a strong sense of empathy and lots of patience. Many of the tenants he meets are old, and they tend to be suspicious and terrified of relocating. If a tenant dreads moving day, Grabow will send an air-conditioned car to the apartment at 9 a.m., pick up the residents and drop them off at 4 p.m. in their new home, with the boxes fully unpacked.

"If they like the second lock on their door and it doesn't transfer to the new place, we buy them a new lock," he says. "Whatever it is."

The hardest cases are people who don't care about money. Like the 80-year-old guy who'd lived in his neighborhood for decades, who couldn't imagine what he'd do with a sudden windfall.

"I kept saying, 'Tell me what I can offer.' He said, 'That's the problem, I don't think you have anything I want.' I got to know him. I said, 'Do you have any kids?' He said, 'Yeah, I have one son.' I said, 'Look, we're all mortal, we're not going to live forever. If I paid you some money, wouldn't it be nice to be able to leave that for your son?' He said, 'To be honest, my son hasn't been that good to me and we're not on good terms.'

"So I said to him, 'Any grandkids?' He said, 'Oh yeah, I've got a grandson,' and his whole demeanor changed. Eyes started to shine. I said, 'When you're gone would you like your grandson's education to be paid for? Would you like your grandson to say, my life is comfortable because my granddad left me this?' " That did it. Eighty thousand dollars changed hands.

"He moved to a very comfortable apartment, I found him something in the neighborhood. He shook my hand, blessed me, and he was a happy guy."
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