Hedge Fund Manager Says Dakota Discriminates

Feb 4 2011 | 11:54am ET

A New York hedge fund manager has sued one of the most famous apartment buildings in the city, accusing it of racial discrimination.

Alphonse Fletcher alleges that the Dakota Apartments routinely discriminate against minorities, both among prospective and current residents. Fletcher, who has lived at the building since 1992, sued after the co-op's board rejected his bid to buy an adjacent apartment to give his family more room.

Certainly, the Dakota is as famous for who doesn't get to buy apartments as who does, with the list of the rejected including singers Billy Joel and Cher, and actors Melanie Griffith and Antonio Banderas. (The building is most famous as the home of former Beatle John Lennon, and the site of his murder.) But Fletcher, who is black and has himself served as president of the Dakota's board, alleges that racial slurs and prejudiced decision-making are common.

"Although such conduct by a co-op board on the Upper West Side of Manhattan at the beginning of the 21st century may seem surprising, this behavior was consistent with the defendants' extensive pattern of hostility toward nonwhite residents of the building," Fletcher alleged in his lawsuit, filed this week.

The Dakota dismissed Fletcher's claims, saying his application "was rejected based on financial materials he provided. Any accusations of racial discrimination are untrue and outrageous."

Fletcher said that he had contracted to buy the apartment without a mortgage for $5.7 million, and demonstrated a net worth of $80 million.

According to Fletcher, head of Fletcher Asset Management, minorities are routinely mocked by the board: One applicant was dismissed as a member of the "Jewish mafia," while another, which The New York Times reports is likely Banderas, was said to want a first-floor apartment so he could more easily access drug dealers on the street.

Even black building residents—including its only black shareholder, singer Roberta Flack—are poorly treated. Fletcher noted that Flack "endured the humiliation of applying multiple times for permission to fix or replace her bathtub," and that he overheard two board members laughing about it. He also alleged that Flack was forced to take the building's service elevator when going out to walk her dog, while white residents routinely use the main elevator. And, he added, that when he tried to buy an apartment in the building for his mother nine years ago, it was approved only with the proviso—which Fletcher called unprecedented—that no one be allowed to stay overnight in that apartment without prior board approval.

Flack, for her part, is supportive of Fletcher, known as Buddy.

"There are several of us up in arms about how Buddy is being mistreated," Flack told the Times. "I don't know if there's discrimination, but inadequacy, on the part of the people who make the decisions."

Fletcher also alleges there may be some non-racist motives at play, noting that the apartment he had agreed to buy was later packaged for sale with another apartment being sold by a board member who had recently stepped down.

Fletcher has asked a judge to approve his purchase of the adjacent apartment and for more than $15 million in damages.


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