Hope for a Bronx Tower of Hip-Hop Lore

Sam Dolnick of the New York Times wrote about Workforce Housing Advisors purchase of 1520 Sedgwick.

Housing advocates, tenants and elected officials have declared a victory in the Bronx with the announcement of the sale of the mortgage on an apartment building that has been called the birthplace of hip-hop. The sale, which was financed with significant help from city agencies, was the first step toward bringing in new owners after what tenants called an era of neglect.

The announced sale of the mortgage for 1520 Sedgwick Avenue in the Bronx is expected to lead to repairs and the building’s sale.

The group trying to take over the building, Workforce Housing Advisors, pledged to address the many violations and improve maintenance at the building, which had been highlighted by elected officials and tenant advocates as an emblem of New York’s affordable housing crisis.

The hulking brick tower at 1520 Sedgwick Avenue has been a haven for generations of working-class families. In the early 1970s, a young resident named Clive Campbell, otherwise known as D.J. Kool Herc, held much-celebrated parties in the community room — parties that played a crucial role in the early evolution of hip-hop.

The building was sold in 2008 to a real estate group that included Mark Karasick, a prominent real estate investor, as part of a wave of deals in neighborhoods that had long been ignored. City officials initially tried to stop the sale, saying that the financing was not viable, but they were not successful.

When the real estate bubble burst, the building’s conditions deteriorated, leaving tenants to battle rats, roaches and the threats of foreclosure. Mr. Karasick’s group tried to sell the building, affordable-housing advocates said, while housing officials sought to broker a deal of their own. Mr. Karasick’s lawyer did not return a call for comment last week.

The city’s Housing Development Corporation supported WinnResidential, a real estate firm based in Boston, and Workforce Housing Advisors, Winn’s local partner, as they expressed interest in buying the Sedgwick Avenue building. Workforce Housing Advisors, a new company, is run by executives with years of experience in important roles in city housing agencies. If they complete the sale, the Sedgwick building would be the group’s first property.

The city provided a $5.6 million loan to allow Winn and Workforce Housing to buy the building’s mortgage from Sovereign Bank for $6.2 million. The money came from a new $750 million city program to rescue distressed multifamily buildings from unsupportable debt by helping buyers deemed responsible by the city take over the troubled properties.

“We’re serious about making sure that buildings don’t destabilize and then destabilize neighborhoods as well,” said Rafael E. Cestero, the commissioner of the city’s Department of Housing Preservation and Development.

He said the city would pursue similar deals to ensure that affordable housing “doesn’t fall victim to people who are there only to make a quick buck.”

Gloria Robinson, president of the Sedgwick tenants’ association, said the sale offered the prospect of much-needed relief.

“It had gotten to a point where nothing was being done properly around the building,” Ms. Robinson said. “The garbage wasn’t being picked up, the floors weren’t being cleaned. It just got really, really bad. It’s like we’re starting fresh now.”

D.J. Kool Herc called it “a great moment for 1520 Sedgwick Avenue.”

“This is a historic site,” he said. “This is where hip-hop comes from. This is it.”

Maintenance should improve quickly — the City Council speaker, Christine C. Quinn, set aside $3 million in discretionary money to make improvements there.

The new mortgage owners have filed for foreclosure, which would allow the building to be sold at a public auction, likely to be held next year. City officials said they expected Workforce Housing Advisors to prevail, though they could not guarantee that they would offer the highest bid.

Representative José E. Serrano, one of the building’s early champions, noted there were still hurdles to clear, but said, “This is a strong victory because this is such a visible building.”

The property sale will follow the model set by Omni New York, the real estate company led by the former Mets player Mo Vaughn. Last year, the city helped broker a deal for Omni to take over 14 buildings owned by the Ocelot Capital Group, an investment group that bought and then abandoned 25 Bronx buildings, which fell into disrepair.

“We’re going to bring the building back to a place where someone would be happy to live with dignity,” said Kevin Gallagher, a director of Workforce Housing Advisors.

Senator Charles E. Schumer called the building “the birthplace of predatory equity.”

“This triumph stands as a message to others: beware,” he said. “It’s a message to those owners or lenders who want to buy these buildings at exorbitant rates with the only purpose of kicking the tenants out and raising the rents.”