New York City investigators last week raided an office of the Atlantic Development Group LLC, a major real estate developer that has financed thousands of affordable apartments in the city using tax-exempt bonds.
Boxes of documents were seized by City Department of Investigation agents during the raid, which was first reported by the Village Voice online as it was in progress on Thursday afternoon.
The firm's principals, Peter Fine and Marc Altheim, are well known as major campaign contributors in the city and state. News reports have linked the raid to an investigation into whether former Bronx Borough President Adolfo Carrión improperly accepted renovation work on his home from an architect in return for favors. Carrión is now an aide to President Obama.
That architect, Hugo Subotovsky, worked the on the Boricua Village project, a 689 unit mixed-use affordable housing development in the Bronx that was partially financed with $90 million of tax-exempt bonds issued by the New York City Housing Development Corp. The project also received city and state subsidies.
"Atlantic Development Group is cooperating fully with an ongoing investigation," the firm said in a statement on Friday. "We are confident that the investigation will show no wrongdoing on our part."
In an application to the National Council of State Housing Agencies for its 2008 HFA awards, the city HDC described Atlantic Development as one their most active borrowers and said that they had financed 34 of the developer's projects with approximately 3,900 units.
In 2007, city Comptroller William Thompson Jr. announced that his office had bought $28.3 million of taxable fixed-rate HDC bonds that partially financed the Atlantic Development project on behalf of the Teachers' Retirement System, of which Thompson is a trustee. The investment was part of an agreement under which teachers, teachers aides, and educational administrators would get preference in renting units in two of the development's buildings.
The New York State Housing Finance Agency has 13 outstanding bond deals with Atlantic Development that closed between 2000 and 2006 under a previous administration, HFA spokesman Philip Lentz said. Those bonds financed $215.9 million of mortages for multifamily housing.
Asked about the raid, Manhattan district attorney spokeswoman Alicia Maxey Greene said, "We do not comment on open investigations."