PRESIDENT'S REPORT
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By Peter Grad A legislative committee yesterday heard stinging criticisms of the Divisionof Housing fot its failure to prevent what one public official termed "flagrant examples of over charges and mismanagement'' by the contractors who built Co-op City. The Assembly Mitchell-Lama sub-committee hearing, cochaired by Housing Committee Chairman Ed Lehner and subcommittee head George Friedman, was called upon the request of Bronx Borough President Stanley Simon who demanded answers from the Division of Housing to an array of allegations concerning its failure to check construction improprie-
ties.
(A full report on the day-long heating, which was held as we went to press, will appear in next week's issue of the Co-op City Tirnes.)
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One of the first witnesses to appear before the sub-committee was Riverbay Attorney Matthew Lifflander who issued a summary of Co-op City's financial problems and answered questions by committee members for nearly two hows. Charging that the selection of filled-in marsh land "for the largest housing project in the world" would probably rank as "the worst single decision in the history of the American construction industry," Lifflandet declared "that decision led to a complexity of design and construction problems which have plagued the residents of Co-op City for a decade." He recited the litany of structural problems which have affected the community in recent years including such defect areas as rooftops, incinerators, brickwork, boiler piers and the underground water
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pipes system. Photographs of selected defect ateas were eírculated among assembly members as Lifflander spoke. "We believed the State, the· Governor and his executive agencies when they said we wouldnot have to pay twice fm the construction of Co-op City," Lifflander said. "Although those promises were made several times over the last two years, we have yet to see a single nickel, and our bricks are still falling." OOCR, HFA officiais attend Also appearing befor e the commíttëe . . were Acting Division of HousingCommissioner Goldman, Housing Finance Agency Executive Director Robert Steves, Councilman Stephen Kaufman and Borough President· Stanley Simon. In remarks before the hearing, AssemblymanEliot Engel, one of (O»ntmued on page 4)
uests information hearing in first move toward rent Increase By Peter Grad The Housing Finance Agency this week formally requested the State to make the
first towards implementation a rentâncrease since the Agencyarid Rivèrbay have up to now beerî" unable 'to come to terms over a viable solution to Co-op City's fiscal problems. HFA Executive Director Robert Steves toldthe Co-op City 'limes last Thursday that the move was "a first stop" and that negotiations with Riverbay wouldstill continue. that talks "had not gotten to point where we thought should be," Steves said he to begin to analyze alterna-
meets
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Boo.rd of Directors meeting scheduled for tms Wednesday, Febmary 6, wíll begin at 8 p.m, instead of 7 p.m., as oñginaßy annmmœd, to allow the Board ro meet in The
executive session before the g-eooraJ meeting.
tive steps." The HFA move this week means that the Division of Housing must conduct a public informational meeting to hear cooperator views on the HFA rent increase request. The HousCommíssíoner would then a . final decision on acting upon the HFA hike proposal. - In its proposal released last November, the requested that an immediate increase of at least 25 percent be imposed on Co-op City residents and that two additionalincreases of 16 percent each be imposed over the next four years. Riverbay President Charles Parness at that time rejected the proposal, accusing the agency of presenting "phony numbers" to make its case. Parness said that costs excluded from rent hike calculations, such as for construction defect repairs, taxes and fuel increases, would result in actual increases of up to 80 percent over a five year period. Co-op City is ClJ!Tently deducting costs fm const~ction defect repairs from"''its monthly payments tç the HFA.
Accmding to Steves, the HFA is bound by a resolution to show definitive steps to secme mortgage payments.'' "We face a deadline by the
frustees," Steves explained. "While we aie obligated undex bylaws to 'diligently enforce mortgage payments,' and may proceed with foreclosure if we choose to, we-have p1eferred to 'avoid fmeclosme." He said that withoutlegislative authorization, the HFA" has no flexibility and
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By Charles K. Parness At meetings with top State officials representing the Governor, the Housing and Finance Agency (HFA), and the Division of Housing and Community Renewal ( DHCR), attended by General Counsel and myself during the last two weeks, we were informed in no unce1tain terms that the State administration will not accept a 12 percent rent increase. The State officials believe our. cm-rent canying cha1·ges are far below mai·ket value, and they tell us that the State has neither the capacity nm the desire to continue to fund om· growing deficits without a substantial rent innease to the residents. We told these State officials that the Co-op. City community has been misled and betrayed by the State. We also told them that in these times of growing economic han:lship there we1-e severe limitations on the amount of additional carrying charges that Co-op City 1-esidents are willing or able to bear. · The Board of Dh-ectors recognizes, however, that as the management of a cooperative housing company, we have a .1-esponsibility to the cooperators to take appropriate action to protect our homes, om· way of life and our community. We have to negotiatè with the State agencies because we do not have an approved Mitchell-Lama biU providing a liveable ceiling on rent increases, and funding our construction defect i-epairs. Although the unresolved financial stàfüs is difficult fm us to live under, it is ci-eating even g1eate1 difficulty fo1 the HF A. The HF A has informed us that in orde1 to meet its responsibility to the. trustee foi the bondholdels, it is compelled to request that the Commissione1 of the DHCR take whatevei action is app1opriate under the existing law to commence rent ·innease proceedings which the Commissionet has the power to do. Unless we can negotiate a mutually agreeable settlement of om overall fiscal . lems, construction defect problems, and rent increases acceptable to Co-op City, the Commissioner wm without our consent. This action includes mailing to all cooperntors a notice of an info1mational hearing on a rent increase, and the .posting in om lobbies of such a notice. I am everyone of this action, so you wm know in advance its purpose. We understand that such a notice will not contain any specific amount of a rent increase, and
(Coo.tmœd on page 4)
(Cc1ntim.n£~d on page 2)
Inside this week MABSTOA promises Kaufman split service on Co-op bus routes Letters to the F.diror .... O»nswners Comer •..•.•. FooS •.••.•••••.••..•••.•.• Ed Pari!; News •••••••••••• Metrovievm ••••••••.•••••• Senior Topics
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6, Billletin Boo.rd•••••••••••• page 8 ~Dings ••••••.•••••••• page 16 'This Week •· page 16 ReligioS Nevm ••.. , •..••• page 17 . Spørils pag-e page 28 Oassifieds •••••.••••. ~ •••.• page
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Co-op City officers marked the 50th c:mniversory meeting of Mid-Eastern Cooperatives at o coke cutting ceremony in Dreiser Center last Sahm:lay: From left to right are Joe Milier, Evo Pellman,
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Boyehester President Arthur Plutz:er, Terri Gabrielli, Mid-Eastern President William Shedd, Riverbay President Charles Parness, Gerry friedlTIClln, Joel Dannenberg ond Harry Bell. Photo by Grad