The Kingston Housing Authority (KHA) is a public-benefit non-profit corporation whose mission is “to ensure safe, decent and affordable housing.” Its partnership with a private for-profit company is raising eyebrows.
The Finance and Audit Committee of the city’s Common Council will meet on Wednesday to reconsider the application for a tax break (a payment in lieu of taxes, called Pilot) to ease the economic burden of the redevelopment for the project.
The KHA issued a Request for Qualifications (RFQ) on September 6, 2019, through which potential partners were sized up for suitability based on what they said they could do, how much experience they brought to the table, and what they’d bid for the job. The process was open to all. Anyone could throw their hat in the ring if they thought they were qualified.
On offer was the renovation the 140-unit apartment complex Stuyvesant Charter Apartments, which is on a nine-acre site in midtown Kingston currently valued by the assessor at $2,376,543.
A year and two months before the RFQ to find a partner for the project had been announced, Mountco, now the current development partner, had the extraordinary foresight to establish an LLC in the name of the development which 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 the Vernon Hills Shopping Center.
Mountco Construction and Development also has its offices in the Vernon Hills Shopping Center, with a different address: 700 Post Road #363.
Two different street addresses. Same mall, same suite number.
Records public and private
Beacon Communities and K & K Preservation were the other two companies which responded to the RFQ.
When alderman Michael Olivieri had first asked for the identities of all companies which responded to the RFQ, KHA director Benjamin O’Shea initially stonewalled. Three days after the request, a councilmember reported, assessor Dan Baker responded for O’Shea, referring to the names as “privileged and confidential“ information.
The KHA finally came around 50 days later, communicating on legal stationery, apologizing that a fire in one of its apartments had prevented it from revealing the two names sooner.
A three-alarm fire which broke out at the Rondout Gardens Apartments had been tamped down in less than 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 membership 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 has drawn scrutiny. The previously referred to entity at the Vernon Hills shopping center along with the Stuyvesant Apartment Owners is Mountco Construction and Development Corp.
Mountco has a mixed track record.
It made the front page of New York City’s Daily News back in 2014. The headline read: “Contractor cheated workers out of wages at Harlem housing development.”
In that article, city officials alleged that the company had underpaid its workers $300,000. According to the same article, Mountco was already a familiar name on an “enhanced review” list for previously prevailing-wage rules violations, having run up $610,000 in wages owed to workers on other jobs.
The company claims all back wages owed have been paid and that its name is no longer on the enhanced review list in New York City. Its website says it has “steadily built a reputation as a quality construction and development firm.”
A war on the poor?
On behalf of the City of Kingston and at the KHA’s bequest, in partnership with Stuyvesant Apartment Owners, LLC, assessor Baker introduced language requesting the tax break into the January agenda of the Finance and Audit Committee.
Though Baker does not sit on the KHA board there and is not a commissioner, he answered questions directed at the authority. He was a sort of related entity.
Besides 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 which developer would handle the redevelopment job.
Freshman alderman Michael A. Olivieri questioned the winning bidder’s pricing of the renovations it has promised. “Again, I know I am new, but $150k per unit to renovate, and that does not include any mold removal or other surprises,” said Olivieri, expressing his unease at the developer’s projected price tag, “that seems extremely high.”
Alderwoman Michele Hirsch questioned the whole premise of privatization. “How can you vote for taking away the last safety net for low-income housing?” scolded Hirsch. “By HUD not funding housing authorities and allowing privatization, it’s systemic racism, and the further war on the poor. As a city making its choice, we’re perpetually in a cycle of disenfranchisement.”
Common Council’s role
In the communication submitted to the council from the KHA’s law firm revealing the names of the companies which had submitted bids, lawyer John Furst said the council had misunderstood its relationship to the housing authority. He emphasized KHA’s status as an independent public body. The argument that the KHA is beyond the authority of the municipal government isn’t entirely true. There are occasions when the decisions of a public housing authority are subject to the approval of the local legislative body.
Selling or leasing the real property of a municipal project to a corporation, for instance, would require the approval of the council. Any and every plan or project which a housing authority enters into requires legislative review. Plans and plots also require the approval of the council.
State critical of KHA
Last year New York State comptroller Tom DiNapoli’s staff completed an audit of the KHA. A key finding was that the KHA board did not provide adequate oversight.
The audit also alleged that budgets were not entered into the financial system, and that financial transactions were not properly captured. Adequate oversight of disbursements, bank transfers and bank reconciliations were not achieved. Some $6.5 million in disbursements and bank transfers were made without review or approval. Finally, financial system access was not properly administered.
The agency’s tax filings for the years 2020 and 2021 appear not yet to have been released.
Alderman Rennie Scott-Childress will recuse himself from a Finance and Audit Committee vote this Wednesday to reconsider the application for the Pilot, as he has done previously. He is a commissioner for the KHA, and its treasurer.