Courtesy / LIHC Investment Group
Charlie Gendron, right, and son Andrew are principals of LIHC Investment Group, based in Portland.
Updated: January 20, 2022
Portland housing investor faces $3.5B in lawsuits, criticism over deadly NYC fire
Courtesy / FDNY, Gambian Youth Organization
A 19-story New York apartment building co-owned by a Portland firm was the site of a deadly fire on Jan. 9.
By William Hall
A fire that killed 17 residents of a New York City high-rise last week has led to lawsuits seeking at least $3.5 billion from defendants including a Maine company.
And the aftermath of the Jan. 9 blaze, New York’s deadliest in three decades and one of the worst in recent U.S. history, is growing.
Eight children number among the dead, and another 44 people were injured. City investigators have said the fire stemmed from a second-floor resident’s space heater, which ignited a mattress and then spread heavy, toxic smoke throughout the building at 333 East 181st St. in the Bronx.
Aided by two self-closing doors that remained open and a stairwell that acted as a flue, the smoke raced up the 19-story tower, known as Twin Parks North West. Smoke caused all 17 deaths and many of the injuries, according to officials.
"This is going to be one of the worst fires that we have witnessed during modern times here in the city of New York," Mayor Eric Adams said in a news report from the scene, where 200 firefighters responded.
LIHC Investment Group, headquartered in Portland, has a 40% stake in the joint venture that owns the affordable-housing complex, spokeswoman Kelly Magee told Mainebiz. LIHC and its two partners purchased the 50-year-old building in December 2019 as part of a $166 million, eight-property portfolio.
The other members of the joint venture are San Francisco-based Belveron Partners, which also owns 40%, and a minority holder, Camber Property Group of New York.
Tenants Rosa Reyes and Felix Martinez on Jan. 11 filed a class-action suit in a New York court claiming LIHC and other defendants were negligent in their ownership and management of the building. Among other allegations, the 23-page complaint says the defendants failed to maintain the spring-loaded, automatic doors as required by local fire codes.
The plaintiffs seek $1 billion in compensation and another $2 billion in punitive damages. The suit was followed the next day by another, from resident Hullamtou Ceesay, also alleging negligence by the owners and others and demanding damages of $500 million.
Nearly two dozen tenants joined the class-action suit last week, attorney Robert Wilensky said. More plaintiffs could join or file suits of their own; Twin Parks was home for 120 households. Many are of descent from the West African country of Gambia.
Investigation into the fire continues, and now includes the involvement of New York State Attorney General Letitia James. At a funeral Sunday for 15 of the victims — including Ousmane Konteh, the youngest, age 2 — James spoke out forcefully, as reported by the New York Times.
“No individuals should have to have space heaters, no individuals should have doors that don’t close. There were conditions in that building that should’ve been corrected,” she said, and vowed that those responsible “must be held accountable.”
Bronx Park Phase III Preservation LLC, the joint venture that owns the building, sent Mainebiz a statement on the tragedy.
“We are devastated by the unimaginable loss of life caused by this profound tragedy. We are cooperating fully with the Fire Department and other city agencies as they investigate its cause, and we are doing all we can to assist our residents. Our thoughts are with the families and friends of those who lost their lives or were injured, and we are here to support them as we recover from this horrific fire.”
Blame game
Over the past 11 days, the tragedy has spurred an ongoing outpouring of media coverage by local, national and international outlets.
Some reports have hinted that blame for the fire lies with tenants who used space heaters; other reporting has sharply criticized LIHC and its co-defendants.
A story in the Washington Post said the fire “illuminated a striking contrast — between a group of investor landlords, whose portfolios have flourished with deals based on government incentives, and the residents of a building that, ensuing scrutiny showed, has a record of building code violations for mice, roaches, lead paint and faulty safety doors.”
An investigative news publication, the Intercept, wrote: “The Bronx fire was not only a tragedy, but also an injustice, suffered by predominantly poor, working-class, African immigrant families living on Section 8 vouchers, a form of government rental assistance for low-income people.”
In contrast was the perspective of online newspaper Curbed, a former real estate publication affiliated with New York magazine.
After the fire, “people started sifting through the details, looking for the patterns of absentee ownership and neglect that usually emerge in the wake of such tragedies,” the Curbed report said.
“But one big piece didn’t fit the narrative: The three property owners — LIHC Investment Group, Belveron Partners, and Camber Property Group — who’d purchased the building almost exactly two years earlier, weren’t exactly slumlords. They were well-regarded affordable housing developers.”
Camber’s co-founder, Rick Gropper, is also a member of Adams’ administration for housing issues.
The venture purchased the property from Cammeby’s International Group, a real estate firm whose holdings include apartments built by former President Donald Trump’s father, Fred. Cammeby’s is also named as a defendant in both lawsuits.
When LIHC and its partners acquired the building, they pledged publicly to keep rents affordable and to make needed renovations.
“Since the moment we took over the property, we have worked tirelessly to improve conditions for our residents,” Magee said.
The Maine connection
LIHC, which is led by principals Charlie Gendron and his son, Andrew Gendron, has also been busy with other affordable property investments.
In fact, two days before the fire, the firm announced that it had teamed again with Camber to buy a portfolio of nine low-income buildings in New York’s Harlem neighborhood for $85 million. LIHC has also partnered with Belveron on similar deals.
Nationwide, LIHC owns 69 affordable-housing projects with a total of 15,800 units, ranking it the 16th-largest such owner in the U.S., according to an industry publication, Affordable Housing Finance. The firm says its holdings are valued at over $5.5 billion.
Although LIHC — formerly Low Income Housing Corp. — was founded more than 25 years ago, it keeps a relatively modest profile in its home state.
Charlie Gendron, who grew up in the Portland area, has been active in affordable housing since 1986, and in his career has conducted thousands of transactions to acquire over 37,000 affordable units in multifamily buildings, according to the LIHC website. Andrew Gendron became a principal in 2014, focusing on pricing analytics, portfolio optimization and managing LIHC’s day-to-day operations.
In Maine, LIHC owns two properties, both in Portland and not far from the firm’s offices at One Portland Square.
LIHC acquired Munjoy South, an affordable-housing development at the foot of Munjoy Hill, for $13 million in 2018 from a company affiliated with developer Michael Liberty. The 140 units are spread among 29 townhomes, built in 1967, a few years before the Bronx building went up.
FILE / Apartments.com
Some of the 29 townhouses that make up the Munjoy South affordable-housing complex in Portland.
As at that project, LIHC has made improvements to the Portland property. They include over $1 million on new roofs, windows, doors and the like, according to Magee.
Last year, LIHC purchased a 43,000-square-foot office/industrial building at 144-152 Fore St., just across the street from the apartments, for $8.3 million. Magee said LIHC has no immediate plans for the Fore Street building.
The Gendrons have declined to speak publicly with news media since the fire, instead referring all inquiries to Magee.
As of Thursday morning, no attorney for LIHC had filed an appearance or otherwise responded in either lawsuit. Lawyers for Cammeby's International had requested a removal of cases against that defendant to federal court for the Southern District of New York.
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