Housing

Hunts Point coop could face city takeover

Teodora Altomare

1025-1027 Leggett Ave. has been part of a city program to subsidize formerly distressed buildings for over 30 years.

Foreclosure looms as taxes and fines mount

In 1982, the City of New York granted the tenants of 1025-1027 Leggett Ave. ownership of their building, creating a low-income coop out of a rundown rental. Now, more than 30 years later, the city might be forced to take the building back, making the 47 owners – many of whom have been there these three decades — tenants once more.

With a debt to the city of over $1.3 million in real estate taxes, fines and water bills, residents of the five-story building are in danger of foreclosure if they can’t find financial solutions.

“We know we made some mistakes,” said Herwig Pirker, the current coop board president and a resident since 2008. “But now we are really trying to save the building.”

The Leggett Avenue property is one of thousands that were seized by the city during the fiscal crisis of the ‘70s and turned into low-income co-ops in the ‘80s, a model where tenants share maintenance costs and manage the building themselves as owners.

While heavily subsidized by the city, these buildings – part of a program called the Housing Development Fund Corporation — remained privately managed, leaving their residents exposed to all the risks of homeownership.

Shareholders at 1025-1027 Leggett say they were not prepared for many of the challenges they faced as owners.

“In 1982 they came here, they gave us the titles. They said, ‘It’s your building, you’ll take care of it.’ That’s it,” said Ruth Perdomo, 69, who has lived in the building since 1978. “What did we know about buildings? Nothing.”

For the first 20 years things were going well at 1025-1027 Leggett Ave., despite a relaxed approach to building management. However, by the mid-1990s the building went into tax arrears, since the coop board refused to raise the maintenance fee over the decades, despite yearly increases in city property taxes and oil prices.

Finally in 2013, residents sought the help of the Urban Homesteading Assistance Board, a non-profit organization that helps distressed Housing Development Fund coops. Caseworkers called a special meeting of shareholders, had them elect a new board and removed the building managers in place at the time, whom shareholders claim pushed the building into even higher debt.

The new board also considered taking legal action against the previous management agents, but the assistance board warned them it would be a long and expensive process.

“I told them to just move forward, because if they focused on the past, and took legal action against those managers, they would in turn take legal action against the previous manager, and there was no point in going back and forth,” said Yolanda Rivera, a project associate at the assistance board.

Pirker, 41, has been working with the assistance board since his election, trying to come up with a financial plan that could save the building.  In order to pay off water and oil bills, last year shareholders agreed to almost double their monthly maintenance, but the $1 million in property tax debt remains. Pinker is trying to get the building into the city’s Housing Preservation Department tax relief program, which suspends or forgives tax debt accumulated by low-income coops before 2001. But a huge balance would still remain.

“The building will not be saved with some type of tax forgiveness from the city,” said Oscar McDonald, senior project director at the Urban Housing Assistance Board. “They have to get a loan, that’s the conversation that so far has not happened in the building.”

The housing board is putting a loan package together for the building, consisting in a combination of two loans, one to address major system repairs, the other to pay off the remaining tax and water debts. However, a loan of that size, without having interests and penalties waived, would result in maintenance fees being too high for many of the low-income people living in the building.

The senior citizens in the building have already applied to Senior Citizen Rent Increase Exemption known as S.C.R.I.E., a program that would allow seniors to freeze their maintenance fees at the current rates. However, that leaves the majority of tenants without a solution should maintenance fees increase.

“The rent is going to be high, and people will have to move,” said Pirker. “Most of them are shareholders from the beginning. Yolanda lives with her son, her two sisters live in the building, her grandkids live here. It’s basically a family.”

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