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Who is Mr. Ku?: Riverview Apartments high bidder has checkered past
06.10.2011 - Granite Falls Advocate Tribune

By Scott Tedrick, News Editor Advocate Tribune, Posted Jun 09, 2011

Granite Falls, Minn. — Who is Emmanuel Ku?  A quick Google search brings up a cache of articles alleging that he is one of the worst slumlords in New York; neglecting upkeep and repairs on his properties so to milk them of profits.  As owner of Genghis Khan, LLC, he is also the high bidder from the May 27 Riverview Apartment auction. And if approved by the US Department of Housing and Urban Development (HUD), will become owner of  Granite Falls’ Section-8 low-income housing facility.  Attempts to reach Ku by phone and email were unsuccessful.

Ku gained notoriety back in 2003 when, through Dakko Property Management, Inc., he managed to purchase a HUD owned New York apartment building, the Pueblo de Mayagüez, despite 1,400 outstanding code violations, $23,000 in fines and a pending lawsuit, spread amongst his 11 New York properties, according to a 2003 article in the Village Voice.

Dina Levy of the Urban Homesteading Assistance Board (UHAB) in New York, which had joined with Pueblo tenants to attempt to thwart the sale, said that it didn’t make sense that HUD would be willing to sell the property to Ku, thereby committing government monies to an individual who had an extensive number of complaints running contrary to the public’s interest.

Though the tenants and UHAB lost the battle, the commotion raised at the situation and similar incidents concerning HUD auctions around the country, resulted in a Congressional amendment to the National Housing Act.  Passed in 2004, Section 219 bars owners with local housing code violations from buying HUD properties at auction.   

Levy said that since the amendment was passed she is aware of three occasions in which Ku was banned from bidding on a New York Property. “At the office we jokingly call it the anti-Ku law,” she said.

But while Ku’s hands were tied in New York, his HUD restrictions did not hold true once he stepped beyond state lines.

“The problem with Section 219 ... is its limited scope,” states a 2007 report, “Cause for Distress,” published by the Center for an Urban Future. “Since there is no national database of housing code violations, a landlord can bid on properties in other jurisdictions without any limitations.”

And so Ku has since bid on HUD projects in Michigan, Alabama and Connecticut; becoming owner’s of properties in two of the three instances.

According to an article in the Ann Arbor News from last June, Ku was the high bidder on the Parkview Apartments in Ypsilanti, Michigan in 2005, but tenants sued HUD to block the sale alleging that the federal organization had illegally invalidated a prior agreement with the city and also that Ku should not have been a qualified bidder.

The suit remained in the legal system from the fall of 2005 to March 2006, at which time HUD offered to cancel the sale to Ku if the tenants withdrew the suit. The tenants agreed, years later a renovation plan recently began moving forward.

According to Jack Cann, Senior Staff Attorney of the Housing Preservation Project (HPP), in St. Paul, an affidavit was submitted by an attorney of the New York City Department of Housing and Preservation and Development in association with the 2005 Ypsilanti lawsuit indicating that:

• Ku owned 13 buildings with 223 apartments in New York City;

• During Ku’s ownership, HPD cited him for 2,953 code violations;

• Code violations at Ku’s buildings were cited at a rate 10 times higher than under previous owners of the buildings;

• Only 35 of those 2,953 violations were certified as corrected within the time allowed, and took an average of 992 days to correct.

Nevertheless, Ku was approved as the high bidder on HUD foreclosure sales of the Birmingham Trade Towers, Alabama, in 2005 and the Clay Hill Apartments in Hartford, Connecticut earlier this year.

According to Cann, Ku’s 13 buildings in New York City currently have 709 open code violations, most of them characterized as “hazardous” or “immediately hazardous.”

Levy says that UHAB tries to focus its energies on aiding the worst living quarters in New York and that, as a rule of thumb, complexes with more than one code violation tend to be considered worse. 

At 13 buildings and 223 apartments, Ku would average a little over three inspector verified complaints per New York apartment.
Levy says she has seen apartments with as many as 10.

As for the Pueblo de Mayagüez that Ku purchased from HUD in foreclosure, according to city documents, it currently has 171 complaints. Of those, 170 were registered after Ku became owner.

Determination

According to Minnesota HUD Director of Asset Management, Laura Simpson, a determination on whether or not to accept Ku’s $429,500 offer for the 40-unit Riverview Apartments is expected roughly thirty days from the Riverview Apartments auction date. The state office will then make a recommendation to the regional Fort Worth office, which is also expected to make a final decision within 30 days.

Simpson said that Ku also has one earlier bid on an additional Minnesota HUD property, the 122-unit Shingle Creek Towers apartment building located in Brooklyn Center.  

A determination on that property is expected anytime, according to HUD officials. But a sale could end up being stalled by a lawsuit filed by the HPP on June 22.

The complaint alleges that, HUD plans to “eliminate current rent limits and other tenants protections after the foreclosure ... runs contrary to federal statures and its own regulations.”  

Cann said that the suit was developed prior to the discovery that Ku was the project’s potential owner, and that HPP is debating whether to amend the complaint now or to wait to hear HUD’s determination.   

According to Granite Falls EDA Director Dennis Van Hoof, if HUD denies Ku the sale of the property, instead of returning to auction the next highest bidder from Riverview auction will be considered until a developer is approved.

Including Ku, there were a total of five bidders at the auction. Republic First, Inc. was the second highest bidder, followed by Montevideo real estate agency Van Binsbergen & Associates ­– who HUD has hired to manage the Riverview Apartments for the past year.

City officials have stated a preference that ownership would remain local.

Said Mayor Dave Smiglewski, “I think it’s safe to say that we’re concerned that the ownership of the building falls into the right hands, and that whoever comes to own the building looks out for the interests of the current residents, future residents and the community.

“We have codes and expectations that need to be fulfilled. It is our expectation that the new owner will do that.”

 
Copyright 2011 Granite Falls Advocate Tribune. Some rights reserved.