YEARS LATER, HARLEM CO-OP
BORN OF COMMUNITY MANAGEMENT PROGRAM
FACES UPHILL BATTLE
by Susan Kruglinski
On July 25, 1990, the residents of a tenement in West Harlem received a letter from the Urban Homesteading Assistance Board.
"Congratulations on the purchase of your building from the City of New York!!!" it read. "As a new Coop [sic], you now have many responsibilities that you did not have before."
Twelve years later, co-op shareholder Carmen James, 76, showed off her two bedroom apartment in the 90-year-old building.
In one room, a wall undulated in waves and bumps from years of seeping water. In another, blotches of black mold covered half of a wall. In the bathroom, the remaining tiles in the shower bulged and buckled. There was a huge gap above one window, and one of her doors had a gash as if it had been bashed in. The smoke detector hung by a wire, and holes in the floor were stuffed with restaurant menus to keep the mice out.
The musty air in the apartment made breathing difficult. James, who has a heart condition, periodically gasped for air when she spoke.
"Lady, I'm sick," she said.
Carmen James's misery is not isolated.
"A lot of people in this building have lost hope," said Robert Cochran, a 54-year-old disabled veteran who has lived in the building since he was nine years old. "It's very depressing. I get very depressed."
In 1983, the residents of 501 W. 143rd St. were among the first to participate in the Department of Housing Preservation and Development's Community Management Program (CMP). They contracted with a local community agency to rehabilitate their foreclosed, city-owned building with grant money. Seven years later, they were allowed to purchase their own apartments for $250 each, deem themselves a corporation, and run the building as a cooperative.
Since then, the cooperative has filed a lawsuit against the community agency that rehabilitated it, and another against the management company hired to pick up the pieces after that lawsuit.
Also since then, the Community Management Program has been terminated due to inefficiency and, according to UHAB, malfeasance.
Currently, the beige, six-story building on the bustling corner of Amsterdam and 143rd has 19 open violations from the Department of Buildings and the Environmental Control Board, and owes almost $30,000 in real estate taxes. According to UHAB, the building owes around $120,000 on its water and sewage bill.
While the number of buildings in New York City left over from the CMP are meager -- there were only 16 buildings in the program in 1990, and the program was terminated in 1995 -- some of these survivors have never recovered from this bureaucratic experiment, and are grappling with the same problems they had before they joined the program. The buildings are still in bad condition, many tenants do not pay their maintenance (which they still often refer to as "rent"), and instead of exploitive landlords, some now deal with exploitive property management companies.
"The biggest problem was that there was no training program in place," said Oscar McDonald, a project director at UHAB, an agency contracted with the city since 1974 to support tenant controlled housing. "There never was. The residents really didn't know what they were in for."
"In the beginning we were for it," said Carrie Smith, 64, who has lived with her husband in the building since 1982. "We thought everybody would come together. We thought we'd be able to fix the building and make it nice, but it didn't turn out that way."
"This was Crack City USA," said Robert Cochran. "They gave us a proposal package, documents and instructions. It was about us. We had control. We had management through input. It sounded like a sound program."
West Harlem Group Assistance, a local non-profit organization, was contracted to assist them in their renovation project. They replaced the boiler and improved the living conditions of this long-neglected residence.
"When West Harlem came in, the building came back alive," said Cochran. "I felt proud that I had a decent home. I had a chance to raise kids in an environment that was safe."
By 1990, 150 W. 143rd was ready to become a cooperative.
According to files at the offices of UHAB, at the co-op's inception the tenants had to be prodded to comply with the various government agency deadlines for the program. But eventually they got it together, Cochran attended five management classes down on Maiden Lane, and the tenants were transformed into shareholders. West Harlem Group Assistance, in conjunction with Commonwealth Management, were to manage the cooperative.
That same year, West Harlem Group Assistance was also managing thirteen other buildings under CMP. According to a 1990 article in Newsday, many of the residents of those building complained that repairs made through West Harlem were inadequate, and that the buildings had no heat in the winter, no hot water in the summer, and vermin infestations. Tenants of one of these buildings won a lawsuit against HPD in 1988, but claimed two years later that the problems remained.
By 1992, the fledgling 150 W. 143rd Housing Development Funding Corporation went into foreclosure under the superintendence of their former rescuer, West Harlem Group Assistance, and Commonwealth Management.
They filed and won their own lawsuit that summer, accusing West Harlem and Commonwealth of failing to pay real estate taxes, collecting checks payable to themselves instead of the corporation, paying an outside company for repairs not performed, improperly signing corporation checks, and allowing fire, property and liability insurance policies to lapse, among other charges.
As this debacle unfolded, the shareholders sought further outside assistance. In 1991, they hired a city-referred property management company, Bostic and Small Consultants, Inc., to help straighten out their mess.
According to some of the shareholders, West Harlem Group Assistance was a mere simmering frying pan -- Bostic and Small was a blazing fire.
"The building is in horrible condition, and the oppressive management company is doing all they can to keep the residents living in squalor," said Nellie Bailey of the Harlem Tenants Council, who has been advocating for the shareholders since 1990. "Bostic and Small is profiting off the rent from the commercial spaces in the building and then keeping that money for themselves. They have neglected repairs, forced shareholders to live in third world conditions, harassed the residents, and then rigged the co-op board elections to ensure that nothing will change."
Bailey said that buildings like this one often fall victim to predatory management groups.
"They take advantage of people to earn a quick buck," she said. "These are more elderly residents that don't have much experience in running a building, so they hire a management firm to handle the day-to-day operations. But then the management people invade and exploit the people who live there. It's like one of those Wall Street hostile takeovers."
Osvaldo Puguero is one of several shareholders who claim that they are being kept from voting in shareholder elections because of unaccepted maintenance payments.
"Every month I pay rent, and every month she says I owe a $20 late payment," Peguero said, referring to Bostic and Small managing agent Yvette Hanon.
"We know they're stealing, we just can't prove it," said Carrie Smith.
These shareholders claim that they have no access to financial records, that Bostic and Small and the current board of directors regularly spend large sums of money without consulting the shareholders, that shareholders on Section 8 subsidies have had their benefits terminated through manipulation of the managing company, and that subsidies have been collected for deceased tenants.
In 2000, some shareholders requested an investigation from the Inspector General at HPD, but say they received no reply.
They claim that the current board of directors, made of up shareholders, is in cahoots with Bostic and Small, and that these board members use corporation money to pay for personal expenses and loans.
"A former board treasurer got canceled checks for housing improvements, hairdressers, and Barnes and Noble," said Cochran. "They were accidentally sent to the old board." He claimed the canceled checks were not saved as evidence.
The shareholders sought assistance from Legal Aid, who ultimately recommended a "rent" strike in 1998. Legal Aid held the maintenance checks of ten strikers in escrow, a not uncommon practice for the organization. That year, these shareholders filed a lawsuit against the corporation's board of directors, asking the court to certify an election of a new board. The court found in favor of the original board, citing that the shareholders were in arrears due to the strike, and therefore ineligible to vote new people onto the board.
With the help of the Harlem Tenants Council, the shareholders attempted a second lawsuit through the offices of Douglas Kellner, but according to Nellie Bailey of the Council, the lawsuit went nowhere because their attorney missed the filing deadline.
"You know what? They need to try it again," said Oscar McDonald of UHAB. "A lot of judges and attorneys don't know the rules of CMP and TIL." TIL stands for Tenant Interim Lease program, a similar but more successful program than CMP.
Bailey also helped the residents request an investigation from the New York attorney general's office.
"We gave them everything we had and they promised to look into the situation, but they haven't done anything," she said. "They aren't cooperating with us. I don't think they're taking the case seriously."
"I badgered the attorney general," said Peguero, referring to Joseph Wilson of the attorney general's office, who is assigned to the case. "You should see my phone bill."
"Mr. Wilson was ducking me," said Carrie Smith, who says Wilson repeatedly told her he was busy. "Originally he said this case is for HPD. HPD says the case goes to the attorney general. The attorney general said you should just have an [new board] election."
Paul Larrabe, a spokesman for the New York attorney general's office, declined comment, saying that the situation is still under investigation.
"To have a managing company for that length of time, obviously these problems come from the managing company," said McDonald. "These people are at a point of last resort. When a board is in cahoots with the managers, you feel powerless."
McDonald added that he had "not heard good things" about Bostic and Small, and although he could not name specific complaints against them, he said that UHAB had removed Bostic and Small from their list of companies referred to shareholders.
According to UHAB, Bostic and Small manages at least six other buildings in New York City. Only one other lawsuit has been filed against the company. In 1999, Valerie Phillip of 1212 Ocean Ave., which is also a co-op, won a lawsuit against the company for its uncorrected housing code violations. Phillip, who had her court fees waived because of her low income, claimed her ceilings were collapsing in three rooms, and at the time claimed "powdery stuff keeps coming down" in her living room. Lead paint and a faulty fire door were documented. According to records, Bostic and Small did not comply with court orders to make the repairs, and did not show up for a second hearing.
Phillip no longer resides in the building.
A resident of that building who asked not to be named said of the management company, "I've had a lot of problems with them. I think almost everybody has."
The resident claimed to be charged for "back rent" that is not actually owed, and that Bostic and Small are using that as an excuse not to fix a hole in the floor. The resident is considering a lawsuit.
"I keep my receipts," said the resident. "I'm not stupid."
Bostic & Small refused comment.
The staff at UHAB, who have followed hundreds of such cases, said that the issues are not always cut and dried. Shareholders neglect their own living quarters, and do not always appreciate the responsibilities of cooperative management.
"These people [in the Community Management Program] did not understand what a housing corporation was," said McDonald. "They did not understand the concept of self help. They did not understand that this was a valuable piece of property."
Ann Henderson, Senior Project Director at UHAB, agreed with this assessment.
"My sense is that they have a very strong sense of ownership, but it's not the traditional concept of ownership," she said. "It's very hard to get people to see in the long term -- to take a 2 or 5 percent raise in maintenance. We spend half our time trying to convince buildings to take loans."
And indeed, according to UHAB's records, the shareholders of 150 W. 143rd did not participate in free management classes offered to them by the organization, and in 1996 lost contact with UHAB altogether.
After a visit to the building in 1994, one UHAB employee noted, "The Board of Directors tried many tactics to obtain shareholder participation...However, nothing seems to work. The shareholders refuse to become involved."
"We try to get people out of the landlord/tenant mentality," said McDonald. "They are always waiting for people to fix a leak, fix a floor."
But both McDonald and Henderson agree that the remaining CMP alumni, apathetic or not, have faced a tougher battle than buildings that transitioned through better programs, such as TIL, and that the HPD system has improved over the years.
"These days, you get major rehab," said Henderson. "Back then, you'd get two or three systems, such as electricity or the roof, and then you were out the door."
While Henderson estimates that 75 to 85 percent of government-assisted cooperatives are doing just fine, she agrees that it is easier for these buildings to fall prey to the lower echelon of management companies, who may have nefarious intentions.
She cited a former CMP building in Brooklyn whose non-profit community management agency employees became shareholders and board members. When the ties were finally severed, the remaining shareholders found that they owed about $250,000 in taxes. The subsequently hired management company also exploited the corporation. The shareholders are currently managing themselves.
"These buildings aren't very attractive to professional management companies," she said. "The rents are too damn low. The big management companies aren't going to look at you."
Of 150 W. 143rd St., McDonald said, "They are at the extreme spectrum when it comes to disorganized buildings."
Some shareholders of that corporation emphatically agree.
"I don't feel at this time that we are capable of managing the building ourselves," said Robert Cochran. "We need help."
But even with a network of assistance in place -- including an organization whose very mission is to aid government-converted cooperatives -- help seems as elusive as a safe, clean, low-rent apartment in New York City.
Said Oscar McDonald, "For us to give technical assistance to a building already half way down the hill, it's very hard."