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The residents of the 37 Avenue B HDFC are calling on the Lower East Side People's Federal Credit Union "to pay a fair rent or move out."
Board members released a statement last evening with their version of the situation.
Their building on Avenue B at East Third Street is broke because the Credit Union, which occupies the 5,000-square-foot commercial space, rewrote their own lease in 1996 to skip paying future mortgage payments and real-estate tax increases.
While they controlled the board they made themselves a "rent-stabilized" commercial tenant and have skipped paying over $350,000 due under the original lease.
Real-estate taxes have risen sharply since 1996 and over the past 19 years the building has been bled dry. In recent years the HDFC has had to borrow money to pay the real-estate taxes or lose the building.
The building needs at least $400,000 in necessary capital improvements, but there isn't any money even for basic repairs.
According to 37 Avenue B residents, Credit Union officials have "refused to accept responsibility for the situation."
According to the latest National Credit Union Administration reports, over the past five quarters the Credit Union's net income was $1.25 million
The Credit Union pays $3,478 a month for 5,000 square feet on a prime corner on Avenue B. Market rate is $15,000 per month.
The Lower East Side People's Federal Credit Union prides itself on serving the low-income community but treats these residents like they have no rights, in their own building. Now the residents say: You want to save Money. We want to save our Homes!
We'll update when/if Credit Union officials release a statement.
13 comments:
Wow. A bank, by any other name, I guess.
Hmmmmm... I don't know how boards for HDFC (Housing Development Fund Corporation) properties work, but the laws for condo, co-op, an other housing boards are pretty similar. What the credit union seems to have done looks to me like a self-dealing, and that's a major violation.
I feel for the residents; they absolutely need legal help, but are do not, by definition, have much money.
This is crappy; I made a huge effort to leave commercial banks—first $hitibank, then Bank of America, and joined this credit union a few years ago. So sorry to hear they're not much better than the commercial guys after all!
There are too few details to really pass judgement on the situation. Yes, that rent for a commercial space is really low but why complain now? The tenants had 19 years to do something.
Also buildings don't suddenly magically go bust. Did they take out a loan and are having trouble paying it back now? Did some kind of lawsuit hit the building?
Why isn't the increased costs passed onto the shareholders of the building also? I would really try to seek some professional help if I was a shareholder in this building.
Cut waste and make sure the books are honest.
Agreed Scuba Dive, I did too back during OWS and this sucks.
@4:49pm: I have no direct knowledge of this situation at all, but in terms of what *might* be going on: The building may have taken out a 20-year "balloon mortgage" where you pay interest only for 19 years - and then the entire principal amount that was borrowed becomes due in the 20th year. Having the "balloon" amount due can lead to a financial crisis situation. More often it leads to re-financing, BUT if there is a tenant so far in arrears, and if the building needs so much $$$ in repairs, banks will be far LESS likely to lend on a new mortgage.
Real estate taxes on this property should be assessed on the basis of income from the units and the ground floor commercial tenant, NOT hyper-inflated FALSE "market value" based on comparable rents and sales prices of nearby buildings bought by foreign interests desperate to put their hot money (from Russia + China, for instance) into safe NYC real estate.
Not enough is known about what is going on with that building to take a side. If they got in over their heads with a bad loan or mortgage, WHY is the Credit Union expected to pay them more rent? WHY should ANY tenant pay for an increase in debt service? If there is no loan/mortgage issue, WHY should the Credit Union pay a higher rent simply because some yuppie bar or café might pay more?
The Credit Union serves the Lower East Side in a multitude of ways, focusing on REAL residents, not monied transients who patronize the banking chains strangling our local and national economy. If they were wise enough to negotiate a long term lease with a viable rent, all the better.
There's obviously way MORE to this story than what this building's HDFC is putting out there.....
Real estate taxes arent going down. They go up and up . Gotta fund Bill Ds agenda. Who will fund that? You? Lower taxes in this town? Never. The 'rich' can always pay. Just hope they dont move away.
This is a Crédit Union for the neighborhood and has been for many years Many gave been helped Many have ooened businesses and are thriving . unlike banks which refused to even come into the area.Im surecthere is more to this story An Hdfc is regulated why now are they demanding the Credit Union pay more .19 years they waited.sorry tgere is something wrong with this story
IF you joined then you should know there has to be more tobthis story.The credit union is there to help the neighborjood and residents they are much better than the banks question is whats actuakky going on within the HDFC?
You said it perfectly
How did the credit union "control the board"?
I realize this response is a little late but I think it's still worth posting. I don't know who the current batch of residential tenants are but since I was working in the area back in the early 1980's when Manny Hanny was closing it's bank branch in the building which would have resulted in the building, along with its 6 or so residential tenants, either being abandoned or sold to some real estate speculator. The local community responded by not only organizing a the credit union but also offering the then existing tenants an opportunity to form their own housing co-op and thereby take control of their living arrangements. Unfortunately, everyone of the tenants expressed no interest in that idea as they preferred to stay on as renters. I don't know how many of the current tenants date back to that time but I suspect they not too many, if any, of them are. If it's otherwise they should be kicking themselves in the butt. There would be sitting pretty today.
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