Co-op City’s official newspaper serving the world’s largest cooperative community. © Copyright 2012 Co-op City Times
Vol. 47 No. 4
Saturday, January 28, 2012
Wells Fargo explains loan guarantee process BY ROZAAN BOONE On the heels of the US Department of Urban Development (HUD) requesting a larger guarantee from New York City and State in order to proceed with the transaction of providing its own guarantee for a refinancing loan for Co-op City, and Coop City shareholders asking for clarification on the loan process, Wells Fargo has issued an explanation. According to Wells Fargo, they would be the lender/underwriting mortgagee of the $600M refinancing loan that Co-op City is currently pursuing. As an approved Ginnie Mae issuer, just prior to closing, Wells Fargo will sell Ginnie Mae securities to fund the refinancing loan to Co-op City. In addition to other requirements, mortgages eligible to be insured through Ginnie Mae must be, and must remain, insured or guaranteed by the FHA and they must also be issued by the same issuer, in this case, Wells Fargo. “There is an active market for those securities, and we are one of the largest issuers and servicers in the country,” Wells Fargo wrote in their explanation to Riverbay management. Ginnie Mae securities are the only US
government backed securities offered through HUD, specifically on loans insured by the Federal Housing Administration (FHA), which HUD’s 223f program allows for. However, up until August of last year, the 223f program was only open to rentals, not condos and cooperatives such as Co-op City. Riverbay’s management, working with Wells Fargo, petitioned HUD over an 18month period to open up the program to include condos and co-ops so that Co-op City can attempt to secure a refinancing mortgage insured by the FHA. In August, 2011, there was a measure of success when this was accomplished, however, when Riverbay attempted to file its application, it was unsuccessful apparently because there was no interest at HUD given the size of Co-op City, and uncertainty about the effectiveness of the state’s supervisory and financial oversight of the development. In a report to the community earlier this year, management wrote: “Many of the issues also involved HUD getting familiar with and comfortable with the Mitchell-Lama program itself. The New
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Working together for our common benefit expected. We are I want to President’s Report in a troubled begin by thanking economy, as most Peter Merola, of us well know, our Director of so we must conFinance, for givtinue to exercise ing the Board an austerity in operations at Riverbay, excellent and professional presentation eliminating waste wherever possible about how Riverbay Corporation and cutting unnecessary costs, but stands in relation to its current twooverall, it looks like we are doing okay year operating budget. First, it's imporin very uncertain economic times. I tant to remember that Co-op City is a would also like to thank Director Bill city within a city, with many related Gordon for all the work he put in as costs to keep going and providing Chairman of the Budget Committee. cooperators with essential services. It's Though some complain and comimpossible and foolish for anyone to plain about this and that, and almost think you can just arbitrarily cut and everything under the sun, without slash the budget without regard for doubt, Co-op City still remains the best unintended consequences or detrimenhousing buy in the New York City mettal trickle down effects. That's why I'm ropolitan area. This was brought home grateful we have professionals like Mr. to me again the other week when I read Merola to thoroughly explain financial in the daily newspapers that rents in issues and possible consequences to us. Manhattan had increased some 9% in I'm happy that, according to Mr. the past year. I was surprised when I Merola, the forecasts for both Fiscal read the average cost people pay for Year 11/12 and Fiscal Year 12/13 remain favorable. This means projected income is greater than initially (Continued on page 2)
Helen Atkins
(Continued on page 4)
Hot water shutdown, Tues., Jan. 31
Riverbay General Counsel releases report on Director’s primary residence investigation A report by Riverbay General Counsel after an investigation requested by Board President Helen Atkins was released concerning Board Director Bernard Cylich's primary residence in light of his owning a home in upstate New York, as well as another in North Carolina. The report concluded, based on the totality of the evidence, that Mr. Cylich's primary residence is in Co-op City, and his seat on the Board should not be deemed vacant due to him not having Co-op City as his primary residence. Questions, however, were raised
about whether Mr. Cylich knowingly claimed both Co-op City and his update New York house simultaneously as primary residences for the purpose of receiving a tax benefit. The report prepared by General Counsel Jeffrey Buss of Smith, Buss & Jacobs, and presented to the Riverbay Board at the direction of President Atkins is printed on pages 7-8 of this issue of the Co-op City Times, though the specific addresses of Mr. Cylich’s residences were redacted to protect his privacy.
Win dow Gu a r d for ms mu st be r etu r n ed by Febr u a r y 15 The Window Guard forms that were mailed by Riverbay to shareholders must be filled out as completely and fully as possible and returned to the Window Guard office in Room S in the Bartow Community Center at 2049 Bartow Avenue by Wednesday, February 15. The Window Guard forms can be returned by mail in the bar-coded return envelope that were provided or hand delivered to Rm. S. Please use only the 2012 Window Guard form that was mailed recently.
The city’s Window Guard law was enacted to help prevent incidences of younger children being injured or killed in falls from unguarded windows. It requires owners of multiple dwellings (buildings with 3 or more apartments) to provide and properly install approved window guards on all windows in apartments where a child(ren) 10 years or younger reside or visit, although anyone, for whatever reason, may request window guards, even if you do not have children 10 or younger in the apartment. (See more information on page 2).
The hot water shutdown that was scheduled to take place on Wednesday, January 26, has been rescheduled to Tuesday, January 31, beginning at 10 a.m. and ending at approximately 6 a.m. on Wednesday, February 1, when the work is expected to be completed, weather permitting. T h e a ffect ed b u ild in gs a r e: Buildings 1 thru 7 Buildings 15 thru 20 Townhouses Adler East, Adler West, Alcott, and Defoe
(Shopping Centers 1 and 2) (MS 153 and PS 180) Cold water will remain available throughout the shutdown. To avoid the possibility of flooding in your apartment, please ensure that your hot water faucet in kept in the closed position and that all drains are cleared of any objects. We sincerely apologize for the inconvenience and appreciate your patience as we work to restore your service as soon as possible. —R iver b a y P ower P la n t
Co-op City man shot three times outside Building 33 BY BILL STUTTIG
A 22 year-old Co-op City man was shot three times by an unknown assailant just as he prepared to enter Building 33 at 9:35 last Saturday night. According to Public Safety, the man, a resident of Building 27, was preparing to visit a friend in Building 33 and approaching the front door when he was fired upon three times, the bullets striking the young man in the left shoulder, the right kidney and the center of the back. A Public Safety Emergency
Service Unit responded to the scene to render medical assistance to the victim and stabilize him until a New York City Emergency Medical Service ambulance arrived and transported him to an area hospital. According to Public Safety, the victim is expected to survive. The NYPD is offering a $2,000 reward for information leading to the arrest of the assailant and any possible accomplices. Anyone with information can call the 45th Precinct Detective Squad at (718) 822-5414 or call Crime Stoppers at 1-800-577-TIPS.