‘Attempted money grab’: Ex-city landlord Springfield Gardens fights back against Fannie Mae suit
SPRINGFIELD — Embattled former city landlord Springfield Gardens is pushing back against a suit by mortgage purchaser Fannie Mae, claiming the company never gleaned more than $7 million in insurance payments after a string of fires, according to new court documents.
A federally sponsored enterprise, Fannie Mae alleged in May that Springfield Gardens violated a loan agreement between the two parties by reaping millions of dollars in insurance claims, after several fires at apartment buildings it previously owned, dating back to 2021.
A "entirely new and unrelated buyer" was responsible for the loan agreement and titles associated with the properties in question, Springfield Gardens said Wednesday in a response to a May federal complaint.
That buyer is Papyrus Equities LLC, which owns the multifamily properties involved in the lawsuit: 155 Bay St., 17 Salem St., 34-36 Belmont Ave., 659 State St. and 2477 Main St., all in Springfield.
The landlord is being represented by S. Joshua Kahane, an attorney from Memphis, Tennessee, and Elizabeth Zuckerman, a Springfield attorney. Kahane did not immediately respond to a request for comment.
The landlord alleged in its response that Fannie Mae has not proved that Springfield Gardens retained any money from the insurance losses.
"On the eve of the one-year anniversary since (the) defendants disassociated from Fannie Mae and this loan, Fannie Mae's malicious prosecution and attempted money grab is unjust and should not be tolerated," the documents state.
Fannie Mae is being represented by Boston attorney Lawrence Kulig, who did not immediately respond to a request for comment.
The Springfield Fire Department battles a fire at 2477 Main St. on Jan. 28, 2023. The building has since been torn down. (Springfield Fire Department photo)Springfield Fire Department
Springfield Gardens LP is a subsidiary of New Jersey company Schweb Partners, run by Abraham Weber and Jacques Schmidt, both of the Garden State. It bought into Springfield's housing market , mostly in the Forest Park and Metro Center neighborhoods, in 2021 and was the city's top taxpayer the following year.
Conditions deteriorated, rents rose and drug dealers set up shop in vacant units. Residents protested their living conditions , and the city stepped up code enforcement efforts .
Papyrus Equities is a company managed by Irshad Sideeka, a property owner based in Brookline, according to records with the Office of the Secretary of the Commonwealth.
Sideeka was sued for negligence over an alleged faulty building alarm system and poor living conditions that led to a fire at a Holyoke apartment building he owned in 2017. The fire claimed three lives.
Papyrus Equities also purchased some of Springfield Gardens' portfolio in the city last year for $54 million.
While Springfield Gardens admits there were several fires at the properties it previously owned, the landlord says it "fully complied with all requirements of the loan agreement relating to insurance proceeds and deny any allegations to the contrary," the response said.
The defendants are demanding Fannie Mae provide proof that it took the money for itself, the documents said.
Springfield Gardens argues, in 15 statements, that it is not liable for the damages asserted by Fannie Mae in its May complaint. Some of its defenses are that Fannie Mae failed to state a claim and committed civil wrongs, and that the mortgage holder is barred by the statute of limitations.
Springfield Gardens said in its reply to the complaint that it hopes that a judge leans in its favor.
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