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Board of Affordable Housing Co-Op Accused of Using Building as Piggy Bank

By Amy Zimmer | July 27, 2015 7:42am
 The board of this HDFC co-op on West 106th Street, known as 13-19 Duke Ellington Boulevard Housing Development Fund Corporation, is facing allegations of mismanagement.
The board of this HDFC co-op on West 106th Street, known as 13-19 Duke Ellington Boulevard Housing Development Fund Corporation, is facing allegations of mismanagement.
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DNAInfo/Amy Zimmer

UPPER WEST SIDE — A co-op on West 106th Street that was nursed back to life by tenants who took it over from a deadbeat landlord decades ago has slipped back into disrepair after board members began using it as their own personal piggy bank, according to a lawsuit filed by tenants.

The 54-unit four-building complex at 13-19 W. 106th St. — formally known as 13-19 Duke Ellington Boulevard Housing Development Fund Corporation (HDFC) — became part of a city program designed to give low-income tenants an opportunity for home ownership in derelict rental buildings in 1994 in exchange for tenants running it themselves.

But tenants Glen Grant and Pascally Toussaint said the board has slowly been running it into the ground,  racking up more than $143,000 in back taxes and nearly $70,000 in water and sewer charges, according to public finance records.

"I didn't even know we were in such debt until I hired the lawyer," said Grant, 52, a supervisor at a hospital.

Building doors have been broken for a decade. Smoke detectors have dead batteries. The boiler rarely works. There was a recent rat infestation and bed bug problem, and when Grant sits at his computer desk, mice run over his feet.

While the building piles on debt, the president, vice president and secretary/treasure have been collecting monthly salaries of $1,600, $1,000 and $650 respectively since 2006, court papers say.

The lawsuit claims the board members improperly "stacked the corporation with shareholders who are related or associated with them," used co-op fund to renovate apartments of family and friends, and failed to maintain proper finance records, among other claims.

None of the board members returned calls for comment.

Board members are in the process of trying to get a loan, sell a co-op-owned apartment and raise maintenance prices, residents and city officials said. They recently held elections for the first time in more than eight years, and in a letter this week announced another meeting for shareholders will be held in August.

If the building can't pay down its arrears, the city would transfer ownership to an affordable housing developer who would turn it back into rentals. Current shareholders could remain as renters but would lose all their equity, city officials said.

"We need to save our building," said Grant, who said he suspected things weren't being run above board when, for instance, he'd see an "old timer" die and then a family member of someone on the board suddenly move in.

Toussaint, an actress/singer/fashion designer who moved to the building in 1995 when she was in her 20s, said "this is a mess. The greed has gotten so bad that now we are falling behind in our taxes, can’t maintain heat in the winter and haven’t made any major repairs in a decade."

Meanwhile, a newly renovated 3-bedroom is on the market for $3,750 a month on a rental website that says the estimated tenant income requirement would be $150,000 a year. The building is supposed to be reserved for low-income New Yorkers who earn no more than $49,000 a year.

In the past several years, several HDFCs around the city have been forced out of the program because of mismanagement and unpaid property taxes, whose interest quickly piles up.

About 60 percent — 200 of 329 HDFCs on the Upper West Side, Harlem and East Harlem — owe the city money, according to records from the city's Department of Housing Preservation and Development, DNAinfo previously reported. Of these, roughly 50 owed more than $100,000 (including the HDFC at 501 West 143rd St., which carried more than $3 million in debt.)

When the complex became an HDFC co-op in 1994, the city did not require regulatory agreements that would give the Department of Housing Preservation and Development more ability to intervene in its matters that the board and its shareholders are responsible for. In the early 2000s, however, HPD began requiring such agreements for new buildings entering the program.

“While the majority of HDFC cooperatives are well managed, some have had difficulties, and resolving operational issues at properties that are experiencing organizational, physical and/or financial distress is a priority," HPD spokesman Eric Biederman said. "We do our best to work with the co-op to try and understand what circumstances got them to that point, and to help them understand how they might resolve their issues."