The Kingston Housing Authority (KHA) is a not-for-profit public benefit corporation whose mission is “to provide safe, decent and affordable housing”. His partnership with a private, for-profit corporation raises eyebrows.
The city council’s finance and audit committee will meet on Wednesday to reconsider the request for tax relief (a payment in lieu of taxes, called the Pilot) to ease the economic burden of the project’s redevelopment.
The KHA issued a Request for Qualifications (RFQ) on September 6, 2019, whereby potential partners were evaluated based on what they said they could do, the experience they brought to the table and what they would do. work. The process was open to everyone. Anyone could throw their hat in the ring if they thought they qualified.
The offer was the renovation of the 140-unit Stuyvesant Charter Apartments, which sits on a nine-acre site in downtown Kingston, currently valued by the appraiser at $2,376,543.
A year and two months before the RFQ was announced to find a partner for the project, Mountco, now the current development partner, had the extraordinary foresight to form an LLC in the name of the development it intended to compete for. “They named their LLC, Stuyvesant Apartment Owners.”
The Stuyvesant Apartment Owners LLC was incorporated in Scarsdale on June 21, 2018. The address attached to the LLC, 700 White Plains Road #363, was at Vernon Hills Mall.
Mountco Construction and Development also has its offices in the Vernon Hills Mall, with a different address: 700 Post Road #363.
Two different addresses. Same mall, same suite number.
Public and private records
Beacon Communities and K&K Preservation are the other two companies that responded to the price request.
When Alderman Michael Olivieri first asked for the identity of all the companies that responded to the request for quotes, KHA Director Benjamin O’Shea initially dodged. Three days after the request, a board member reported, assessor Dan Baker responded for O’Shea, calling the names “inside and confidential” information.
The KHA finally came around 50 days later, communicating on legal letterhead, apologizing that a fire in one of his apartments had prevented him from revealing the two names earlier.
A three-alarm fire that broke out at Rondout Gardens apartments was brought under control within 30 minutes by firefighters from Kingston, Esopus and Port Ewen.
The building was sold to the current owners, Stuyvesant Charter, Inc., for $2.5 million in 1999. Stuyvesant Charter, Inc. shares the same board of directors with the KHA. Catania, Mahon and Rider, the law firm representing the KHA before the Kingston Common Council, refers to it as a “related entity”.
KHA’s alignment with the winning bidder caught the eye. The previously mentioned entity at the Vernon Hills Mall with Stuyvesant Apartment owners is Mountco Construction and Development Corp.
Mountco has a mixed record.
He made the cover of New York City’s Daily News in 2014. The headline read: “Contractor Scammed Harlem Subdivision Workers’ Wages.”
In that article, city officials alleged that the company underpaid its workers by $300,000. According to the same article, Mountco was already a household name on an “enhanced review” list for violations of previously existing wage rules, having racked up $610,000 in wages owed to workers in other jobs.
The company says all back wages owed have been paid and his name is no longer on the enhanced review list in New York. Its website states that it has “steadily built a reputation as a quality construction and development company”.
A war on the poor?
On behalf of the City of Kingston and at the request of the KHA, in partnership with Stuyvesant Apartment Owners, LLC, Assessor Baker introduced language requesting the tax relief to the January Finance Committee agenda and of verification.
Although Baker does not sit on the KHA’s board of directors and is not a commissioner, he answered questions directed to the authority. He was some sort of related entity.
In addition to questioning the KHA’s choice of development partners, some Kingston council members also alleged a lack of transparency in the bidding process used to select the developer to take on the development work. redevelopment.
First-year Alderman Michael A. Olivieri questioned the winning bidder’s price for the renovations he promised. “Again, I know I’m new, but $150,000 per unit to renovate, and that doesn’t include mold remediation or other surprises,” Olivieri said, expressing unease with the projected price. by the promoter, “that seems extremely high”.
Alderwoman Michele Hirsch questioned the whole premise of privatization. “How can you vote for the removal of the last safety net for HLM? scolded Hirsch. “HUD not funding housing authorities and allowing privatization is systemic racism and continuing the war on the poor. As a city of choice, we are perpetually in a cycle of disenfranchisement. »
Role of the Municipal Council
In the communication submitted to council by the KHA law firm revealing the names of companies that had submitted bids, solicitor John Furst said council had misunderstood its relationship with the housing authority. He highlighted KHA’s status as an independent public body. The argument that the KHA is beyond the authority of the municipal government is not entirely true. In some cases, the decisions of a public housing authority are subject to the approval of the local legislative body.
Selling or leasing property from a municipal project to a corporation, for example, would require council approval. Any plan or project that a housing authority engages in requires legislative review. Plans and plots also require council approval.
Critical condition of KHA
Last year, the staff of New York State Comptroller Tom DiNapoli conducted an audit of the KHA. One of the key findings was that the KHA board was not providing adequate oversight.
The audit also alleged that budgets were not entered into the financial system and financial transactions were not captured correctly. Adequate control of disbursements, bank transfers and bank reconciliations was not carried out. Some $6.5 million in disbursements and bank transfers were made without review or approval. Finally, access to the financial system was not properly administered.
The agency’s tax returns for the years 2020 and 2021 do not appear to have been released yet.
Alderman Rennie Scott-Childress will recuse himself from a Finance and Audit Committee vote on Wednesday to reconsider the pilot bid, as he has done previously. He is commissioner of the KHA and its treasurer.