On Tuesday, two banners arrived on the upper floors of 37 Avenue B at East Third Street... the Lower East Side People's Federal Credit Union (LESPFCU) is the retail tenant ...
The hand-painted sign on B reads "Save Our Home/Salva nuestros hogar" ...
... while the banner on East Third Street reads "LESPFCU do the right thing, save our home" ...
[Reader-submitted photo]
This is a continuation of an effort that the residents of the 37 Avenue B HDFC started last June.
HDFC board members released a statement reiterating their version of the situation.
The residents of 37 Avenue B HDFC are calling on the Lower East Side People's Federal Credit Union to pay their fair share or move out. Their building is broke because the Lower East Side Peoples Federal 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.
They saved $350,000 due under the original lease and the HDFC building is FLAT BROKE
We have 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 is no money even for basic repairs.
According to the board members, the Credit Union has refused to accept responsibility for the situation. The Credit Union pays $3,478 a month for 5,000 square feet. The HDFC says the market rate is $15,000 per month.
Credit Union officials have yet to comment on the situation at 37 Avenue B.
H/T Stacie Joy!
Previously on EV Grieve:
At 37 Avenue B, residents want their Credit Union retail tenant to pay more rent
this is a scandal.
ReplyDelete15K per month for 5,000 square feet is the going rate? They are asking 15k for the Stage space. A better location, but ten times better?
ReplyDeleteHeck, I'd stay too if I could pay $3,478 for 5000 sq ft of space. It's a lot less than 5000 sq ft of residential space would go for. Or even 1500 sq ft... heck, some 500 sq ft residential spaces are asking that much.
ReplyDelete(and yes, I know there's a difference between residential and retail space)
I guess the building can't kick them out? I imagine the lease is indefinite.
Market rate for that (and the basement, which they also use) is probably more like 25-35K. The sliver of space for the Stage is 15k!
ReplyDeleteWait, a tenant wisely negotiated a savvy long term lease and the building (the landlord) accepted. But, when it turns out that the tenant did a good job and struck a good contract, the landlord starts bitching about fair share. Their fair share is the bargain struck and not a dollar more. If the building is broke, they have nobody to blame but themselves and this fair share bullshit is pathetic.
ReplyDeleteThey did not negotiate the deal , they simply wrote there own lease because they controlled the hdfc at that time.
DeleteFor your information In the nineties the Credit Union was going bankrupt and unbeknownst to the tenants they asked for a meeting to discuss their lease. when the HDFC was formed the HDFC board made a stipulation that the CU must stay in business for at least 5 years. before the 5 year period was when they were in trouble thus they called the meeting to negotiate the rent and the tenants in good faith said yes because we did not know that they were going under. Now that the building is in trouble they will not help us. The CU has received 4.4 million in grants and not one penny went to the building.So I don't know why you say we deserve the treatment we are getting from the CU. Please before you make stupid statements get all the facts first. Thank you.
DeleteI heard about this last year; I've had an account with the credit union since I left Bank of America—around the time of Occupy—so I'm reluctant to move yet again. (Before that I left $hitibank™—where I had been a customer for over 20 years—for Fleet, which was swallowed up by Bank of America.)
ReplyDeleteI'm going to start looking around, though; if Amalgamated is a good enough bank, I'll switch in a heartbeat—and I'll tell the people at this credit union why. But this seems to show that you're damned if you do, damned if you don't.
the co-ops rule was that they could not charge more than 20% of their rent roll for commercial spaces (called the 80/20 rule).
ReplyDeletethat ban was lifted and most hdfc's raised the commercial rents (not necessarily to market rate) at the end of the commercial lease. there are not many ways an hdfc can raise funds. hdfcs were originally created as called low-income housing). since a building can't really support itself with low-income rents the city changed it to affordable (which in reality is now middle class).
different hdfcs (there are different types) have different eligibility and re-sale policies.
If they voted on their own lease, it sounds like a conflict of interest, and is probably against the bylaws. Suing them will probably be more effective than whinging on the internet.
ReplyDeleteThe purpose of this article & the previous one isn't to whine about it on the Internet. It is to bring awareness of what is going on behind closed doors. The tenants can not afford necessary building repairs I doubt they'll be able to afford an attorney
DeleteHow much time is left on the lease?
ReplyDelete@3:10 PM: I don't understand the point you are making. How do you stipulate to staying in business for five years? What does that mean? And if the tenants didn't know the CU was "going under," why did they want to help?
ReplyDeleteThese tenants have lived in this building since BEFORE the CU even existed. They were there when the commercial space was Msnufactures Hanover Trust. The CU came in & took ADVANTAGE of these working class citizens of the LES. The details of what exactly happened & how it happened are a little foggy as this all happened so long ago. The bottom line is that the CU rewrote their own lease (yes with the OK from the tenants because the tenants were NOT real estate savy) they BELIEVED in the CU. The CU sold the tenants a bunch of dreams that never came to fruition.
DeleteI must also point out that in 1996, no one could have foreseen that 20 years later this place would be priced like the Gold Coast; who could have foreseen churches and 200 year old buildings being torn down for multi-million dollar apartments to be built in their stead? Who could have possibly deduced that the East Village would be turned into a trust fund kids' playground, NYU-ville, the fro-yo/snow cream/bubble tea/nail salon/bar capital of the city, rather than the old heroin capital that is used to be? How were the tenants supposed to know that the space being occupied by the credit union would quadruple in value, and that their commercial tenant, which passes itself off as a friendly neighborhood amenity working for the little guy, would actually be a snake in the grass dedicated solely to maintaining the sweetheart deal they crafted for themselves, to the detriment of the building they prosper from being in?
ReplyDeleteScuba Diva, check out Apple Bank - used to be the Harlem Bank for Savings, and they're a pretty unassuming banking establishment. They've had my business for 30 years, I recommend them.
Anon 3:10 + 11:09:
ReplyDeleteYour group needs to CLEARLY EXPLAIN what the issue is. Pasting up posters with few details and hanging banners with slogans isn't serving you well.
HOW is your building in debt? HOW has the credit union caused this? HOW did they "take advantage" of your group? WHO is managing your building? WHERE can folks get the FULL and COMPLETE story as to what is going on?
There is obviously MORE to this story, so I'm not going to boycott the credit union on the basis of what has been said so far -- nor should anyone else....
http://thevillager.com/2016/04/14/how-a-peoples-bank-hijacked-a-whole-building/
DeleteThe building is obviously in poor condition from the outside, so i cant imagine the inside. More attention should be given to this in local media.
ReplyDeleteSounds like mediation could be useful in this situation, since both the credit union and the board seem to not be moving. As long as both parties are willing, NYC has a law that says counties should provide free or low cost mediation to anyone who wants it. In Manhattan, the New York Peace Institute does this. I highly recommend their services.
ReplyDeleteSO WELL SAID, I HAD TO COPY AND PASTE: Wait, a tenant wisely negotiated a savvy long term lease and the building (the landlord) accepted. But, when it turns out that the tenant did a good job and struck a good contract, the landlord starts bitching about fair share. Their fair share is the bargain struck and not a dollar more. If the building is broke, they have nobody to blame but themselves and this fair share bullshit is pathetic.
ReplyDelete