After Hiring Frank Carone, a Reviled Brooklyn Landlord Won a Multimillion-Dollar Windfall from the City
Yosef Zvieli faced foreclosure after running a residence for Brooklyn College students into the ground. Then he retained the political kingpin who has since become New York’s power broker of the moment.
Before he launched his global consulting firm, before he began mingling with the glitterati as a trustee of the Museum of Modern Art, and before he was chief of staff and the go-to guy for Mayor Eric Adams, Frank Carone was a Brooklyn lawyer representing a little-known developer with a big problem.
The client’s name was Yosef Sefi Zvieli. He had a large but empty residential building, a lender threatening foreclosure, and an abysmal reputation as a landlord.
The building was an eight-story tower in the South Midwood section of Brooklyn at the corner of Kenilworth Place and Farragut Road. Zvieli, who also owned hotels in Israel, built the dorm-style structure to house out-of-town students from nearby Brooklyn College. When it opened in 2010, he hoisted a large sign above the glass-paneled entrance proclaiming the building as “Residence Hall @ Brooklyn College.”
As president of his company, New Brooklyn Development LLC, Zvieli signed a contract with the school and its academic parent, the City University of New York, a copy of which was obtained by THE CITY. It promised to offer well-maintained student residences and in exchange, the college pledged to help steer students to the facility, advertising the rooms on campus and on its website.
But less than ten years later, the college canceled the agreement with the landlord amid student protests that the building was filthy, fetid and dangerous. Residents reported living with mold, disrepair and floods from overflowing sewage. One woman, who spoke to The CITY, told of being repeatedly sexually harassed by a maintenance worker, a complaint she raised to police and aired publicly at the time. The student newspaper, The Kingsman, ran a front page story in March 2019 with the headline, “Residence Hell.”
“It was an absolute hot mess to live there,” Corrinne Greene, a former student who lived at the residence for a year in 2018, told THE CITY. “Our sink broke, there was flooding in the bathrooms. Elevators were out of order. Strangers from off the street would wander in.”
Chris Omar, a Brooklyn College film student who made a video about problems at the building that he circulated on campus, said he rented a room there after seeing a banner on campus with the slogan “You’ve found a home.” “I ended up bailing after the second semester. The common areas were just disgusting,” Omar told THE CITY.
A Meeting of Neighbors
After his student renters fled, the landlord’s troubles deepened. On April 1, 2020, his $30 million mortgage went into default as he stopped making payments. Mortgage records reviewed by THE CITY show that Zvieli had steadily increased the debt on the property, at one point pledging as collateral his $1.95 million waterfront home in the upscale enclave of Mill Basin in southeast Brooklyn.
But hopes for a possible answer to his problems arrived after Zvieli approached one of his Mill Basin neighbors. Carone, who lived nearby in his own modestly palatial waterside home, was a rising star in the Brooklyn legal firmament, a partner in the swiftly expanding law firm of Abrams Fensterman. He also served as law chairman to the Brooklyn Democratic Party, a post that gave him access to political leaders like then-Mayor Bill de Blasio, for whom Carone had become an advisor, and Adams, then the Brooklyn borough president and actively planning his run for mayor.
Carone agreed to look into the problem for his neighbor. He soon found a solution: A city-financed shelter for the homeless that would pay millions of dollars in rent.
Today, the rooms that once housed students from distant homes hold some 200 single women who have nowhere else to live. They reside there under a lease that pays Zvieli $3.5 million a year. The December 2021 lease, obtained by THE CITY through a Freedom of Information request, lists Carone and his law firm, Abrams Fensterman, as Zvieli’s attorneys. Its terms call for a $100,000 rent increase after the first three years, and it contains renewal options with attendant rent hikes over the next 30 years. The initial rent payments are covered by a four-and-a-half-year, $56 million city contract with the shelter’s nonprofit operator, a Bronx-based group called Children’s Rescue Fund.
Carone said his role was basic lawyering: Helping Zvieli find a new tenant, and negotiating the terms of a lease. But it was also a classic example of how, at the neighborhood level, well-connected lawyers and politicians often shape the fate of many projects in ways that reward even the most questionable businesses. In this case, a prominent neighborhood group that had hoped to buy the building and run a homeless shelter for families got pushed aside, making way eventually for a lucrative lease that rescued Carone’s client from his financial woes.
“After the Brooklyn College dorm was left vacant,” Carone said in a statement, “I represented the building’s owner, Mr. Zvieli, in meeting with real estate brokers and non-profit organizations, and ultimately arranging a lease with the Children’s Rescue Fund, an excellent social service organization, to take over the property.” As part of that process, Carone said he was “in contact with the general counsel’s office at the city’s Department of Social Services to understand the capital improvements required” for the building to meet city and state standards for a shelter.
Carone’s representation of Zvieli wasn’t the first time he had gone to bat as a private attorney for a player in the business of providing shelter to the city’s most destitute residents. In 2022, the Daily News reported that Carone had represented CORE Services Group, a Brooklyn shelter provider that had come under city and federal investigation, before the city’s social services department. The News noted that Carone had failed to disclose his dealings with the department on his required financial disclosure statement with the city’s Conflicts of Interest Board when he joined the administration. Carone said the instructions on the board’s COIB disclosure form were poorly worded, but agreed to amend his filing.
For Zvieli, the shelter lease was a timely lifeline. Foreclosure proceedings against him by the Federal National Mortgage Association (known as Fannie Mae), which had guaranteed his loan, were dropped. Three months after the lease was signed, Zvieli obtained $35 million in new financing from a company called One Ken Funding LLC, registered at a law firm in Williamsburg.
Zvieli and representatives of his firm did not respond to messages and emails seeking comment.
A Plan Abandoned
Carone, who was named chief of staff in January 2022 when Adams took office as mayor, left city government at the end of last year to start a consulting firm called Oaktree Solutions. He quickly attracted top city real estate titans as clients. He is reportedly wooing the Saudi owners of an international golf tournament, and is slated to move into prime office space on Fifth Avenue. But before that swift rise, his practice focused on local targets, including those seeking municipal help.
The city’s original plan for the Kenilworth Place site, according to leaders of the local community board who were monitoring the situation, was to have a local nonprofit, CAMBA, purchase the building from Zvieli and operate it as a shelter for homeless families.
In addition to providing housing for the homeless, the group, formerly known as the Church Avenue Merchants Block Association, operates an array of services including legal assistance and job training. The move to buy the property was in keeping with a strategy devised by the de Blasio administration that called for the city to shift from privately-owned buildings — many of which have been cited over the years for their high cost and often deplorable conditions — and help nonprofit groups take ownership.
But that plan was abandoned after local political leaders objected, pointing to violations at two of eleven shelters operated by CAMBA. Assemblymember Rodneyse Bichotte Hermelyn, who lives around the corner from the Kenilworth building, and City Councilmember Farah Louis, who represents Flatbush, issued a joint statement asserting that CAMBA was “ill-equipped to manage any proposed shelter based on its poor track record.” The statement did not address Zvieli’s continued ownership of the property. CAMBA did not respond to numerous inquiries by THE CITY about the selection process or the allegations against it.
In addition to her elected position, Bichotte Hermelyn holds political sway in the borough as chair of the Brooklyn Democratic Party. Among her key supporters has been Carone, who, along with his wife, has donated $15,400 to her campaign. Howard Fensterman, who was Carone’s law partner at the time, has donated $18,800 to the Assembly member. Carone said he did not recall discussing the shelter with Bichotte Hermelyn. Bichotte Hermelyn did not respond to requests for comment from THE CITY.
The opposition to an established local group puzzled Jo Ann Brown, chairperson of Community Board 14, which includes the neighborhoods of Flatbush, Midwood and parts of Kensington. “I don’t have a clear understanding why they had a problem with CAMBA,” Brown said.
By the time Zvieli approached him, Carone said the plan to sell the property to CAMBA had already stalled. In a bid to find another shelter provider, he said he reached out to several other nonprofit groups, eventually settling on the Children’s Rescue Fund.
A New Operator
In October 2021, the city’s Department of Social Services informed CB14 that the city had designated a new group to operate the shelter at Kenilworth Place. Instead of families, the shelter would serve single women. And instead of a local group with ties to health and social services providers in the area, the new operator was Children’s Rescue Fund, a group that operates more than a dozen shelters for homeless New Yorkers, several of them in hotels, in the Bronx, Manhattan and Queens.
Brown said her board was concerned that the shelter would be owned by the very landlord whose management problems at the residence hall had sparked the uproar among Brooklyn College students. When the board reached out to Children’s Rescue Fund about the ownership, Brown said, “we were told to talk to the landlord’s attorney, Frank Carone.”
Carone said he had had no prior dealings with the nonprofit, although last year the group began operating three Manhattan shelters in buildings owned by another landlord with a troubled reputation who has also been a Carone client in the past. In a controversial 2019 deal with the city, Carone represented Jay and Stuart Podolsky, brothers whose real estate clan earned decades-long notoriety for tenant harassment and poor housing conditions, while at the same time earning millions in city payments for housing the homeless.
As part of its effort to shed problem landlords, the de Blasio administration agreed to pay the Podolskys $173 million for 17 of their properties that were being used for so-called “cluster housing” for the homeless, and transfer them to nonprofit ownership as affordable housing. The deal was criticized as overpriced and tainted by Carone’s ties to de Blasio — for whom he had become a major contributor and advisor — but the city said it would’ve been costlier to seize the properties by eminent domain.
At the end of 2021, the city also stopped placing homeless families in two hotels owned by the Podolskys, the Ellington Hotel on West 111th Street, and the Apollo Hotel on Seventh Avenue in Harlem. They were also slated to remove single adults from a Podolsky-owned property on Central Park West. But last year, as the numbers of homeless grew, the Adams administration reopened those sites, and the Children’s Rescue Fund was brought in to operate them. Carone said that he was unaware that the group had any dealings with the Podolskys.
Orlando Ivey, president and chief executive officer of Children’s Rescue Fund, told THE CITY that his group’s involvement in the Kenilworth shelter began in the fall of 2021 when a representative of the owner — he couldn’t recall if it was Carone — “reached out to my organization to see if we would be interested in renting the building as it was no longer being utilized as housing for college students.”
Ivey said that his group, along with city and state officials, inspected the building. “They gave the owner a list of things that had to be upgraded or repaired. It has pretty much been scrubbed,” he said. “I don’t know about the past.”
Although the shelter has been operating for over nine months, Ivey said his group is still in the process of establishing a community advisory board, a panel of local residents and social service providers that is required under the contract with the city. “We are reaching out to the local politicians to see who they would recommend to be on this board,” he said.
Council member Louis told THE CITY that her office has been working with residents of the shelter since it opened. Louis said her office has hosted a luncheon for women at the shelter, and has brought them to fitness classes at a nearby church. “We want them to feel like part of the community as they transition out to lead full lives,” she said.
Louis said she had never opposed a shelter at the site, but had initially asked the de Blasio administration to instead create affordable housing for local seniors, or a city-owned residence for CUNY students there. She said she was unaware that the shelter was still owned by the same landlord whose poor management of the residence hall had been protested by student residents a few years earlier.
Her hesitations about CAMBA, she said, stemmed from their handling of an after-school program. “I didn’t think they were operating it properly. That’s what I heard from parents,” she said. Since then, she’s changed her mind about the group. “They are doing a way better job now,” she said.
Officials at the city’s Department of Social Services declined to discuss the evolution of the shelter at Kenilworth Place or whether it had questioned Zvieli’s continued ownership of the building. “When opening any new facility in partnership with non-profit social service providers,” an agency spokesperson said in a statement, “we ensure that the site complies with all city and state oversight regulations, undergoes thorough inspections, and is equipped to provide quality care and supports vulnerable New Yorkers.”
Last month, Mayor Adams announced a new shelter acquisition fund that offers $15 million in a revolving fund to help nonprofit providers “own and build shelters” — a goal under de Blasio as well. That goal eludes the Kenilworth shelter, however, since there’s no option in the contract for the rescue fund to buy the property.
In conversations outside the shelter on Kenilworth Place, women residing there offered mixed reviews of the facility. “This is hard,” said Sheila, who has lived at the shelter for six months and, like others who spoke to a visitor, declined to give her last name. “We’ve had problems with the elevators, and some with heat and hot water,” she said. Residents reported seven separate complaints about heat and hot water at the building over the winter, although inspections by the housing department revealed no violations. Ivey said that there had been an issue with the boiler but that the landlord had addressed it.
Tyanna, who said she had been at the shelter for four months, said some residents complained unreasonably. “There are some problems, things that could be fixed, but I don’t expect it to be perfect. It’s a shelter and the hope is to move on as soon as we can.”
The news that the same landlord that she and other students had protested against is now profiting from a homeless shelter at the building was disappointing to Corrinne Green, the former Brooklyn College student. “Our hope was that the city would purchase it or take over the management,” she said. “Certainly not the same guy.”