Knickerbocker Village Ordered to Stop Co-op/Condo Conversion Talks (Updated)
State regulators have slammed the owners of Knickerbocker Village for improperly holding meetings about a potential co-op or condo conversion of the historic Lower East Side affordable housing complex.
A letter dated Dec. 21 from New York State Homes & Community Renewal (DHCR) orders Knickerbocker Village, Inc. to, “cease and desist” from holding any future meetings. The letter was distributed to tenants this week by the Knickerbocker Village Tenants’ Association, which filed a complaint with DHCR about “meet and greet” sessions that have been held during the past few months.
While state officials were informed that the meetings would be taking place, Deputy DHCR Commissioner Mark Colon wrote, “certain aspects of where and how the meetings were organized, as well as the types of representations that may have been made, concern us.” According to the letter, some of the meetings took place in “off-site restaurants” and some of them, “occurred exclusively with tenants of Asian descent.” Colon also noted that the tenant association wasn’t notified about later meetings at Knickerbocker Village. He added, “We understand that tenants were told that the conversion process to cooperative or condominium ownership was imminent, and they were asked if they were interested in ownership.”
Colon stated, “We have previously informed you that, in view of prior litigation and DHCR’s mission to promote affordable housing, DHCR is unwilling to consider a conversion of more than 1,000 units of affordable rental housing in lower Manhattan to cooperative ownership.” He referred to past meetings with Knickerbocker Village ownership to, “discuss affordable rental preservation options which might be acceptable to all stakeholders.” Colon said the agency had consulted with the attorney general’s office about potential legal violations by the property owner.
Knickerbocker Village, completed in 1934, includes 1590 rental apartments. The 12-building complex is covered under a low-income housing program known as Article IV, which preceded the Mitchell-Lama program. In 2007, the tenant association successfully sued the state, which had approved ownership’s plan to exit the affordable housing program.
We have contacted Global Strategy Group, Knickerbocker Village’s communications firm, as well as DHCR and the tenant association. This story will be updated if we receive replies.
UPDATE 1:20 p.m. Here’s a statement from Knickerbocker Village, Inc. in response to DHCR’s letter. At the end of this post you can also read the full response to DHCR from Daniel Robinson of Cherry Green Property Corp. (KV’s owner).
We engage extensively with the Knickerbocker Village community to learn about residents’ concerns and address any issues they have. That includes regularly meeting with the KVTA. The opportunity to choose between home ownership or remaining a renter has long been an issue discussed at KV, but there is no current plan to move forward. We have responded in full to DHCR’s questions and will work to resolve any outstanding issues it may have.
UPDATE 2/8 Here’s a statement from the Knickerbocker Village Tenant’s Association (KVTA):
The KVTA is grateful for DHCR’s strong validation and support of the rights of a validly elected Tenant Association to represent the tenants. The KVTA has been working to find the co-op conversion plan for Knickerbocker Village since our election in 2015. We believe strongly that as tenants are the main stakeholders, their voices must be included in any possible co-op conversion discussion. In this effort, we have recently met with all parties involved in ownership’s proposal to privatize KV, including our elected officials, administrators from HCR, representatives of ownership, as well as their paid lobbyists. KVTA’s priorities continue to be providing protections for tenants that want to remain as renters under Article IV, for seniors, and for SCRIE/DRIE beneficiaries. The big picture here is that without the input of KV tenants, the fear that privatization at KV would ultimately lead to the displacement of several hundreds of families and a significant loss of affordable housing in Chinatown/Lower East Side, two Lower Manhattan neighborhoods that are currently experiencing rapid gentrification, displacement, and rising rents. HCR has determined that it’s not in the best interest of KV, or the neighborhood, to allow the privatization of the complex. We are committed to maintaining the long-term affordability of our homes. We have not, as of yet, received anything in writing from ownership detailing their plans for privatization. In good faith, the KVTA, along with our legal counsel at the Urban Justice Center, continues to meet with ownership and their consultants to discuss their plans in a transparent and honest manner.
January 24, 2018
Mr. Mark Colón
President, Office of Housing Preservation
New York State Homes & Community Renewal 641 Lexington Ave
New York, New York 10022
Dear Mr. Colón,
RE: Knickerbocker Village
I am writing in response to your letter dated December 21, 2017, which brought to my attention complaints that you received from unspecified individuals regarding KV ownership’s ongoing engagement with the KV resident community.
Over the past year KV ownership has put forth substantial efforts to better understand the needs, priorities and concerns of KV families. One of our goals has been to break down barriers to trust that have historically existed between KV ownership and KV residents. We believe that KV residents have overwhelmingly valued and appreciated these efforts. Furthermore, our engagement has been consistent with our obligations pursuant to NYCRR 1725-2.3(b).
It should be noted that the input received from the KV resident community has led to constructive plans for the future, including but not limited to planned initiatives to address quality of life concerns expressed to us by residents, initiatives to expand and improve mental health and other supportive services to better meet the needs of residents, and ideas for improvements to KV’s underutilized common spaces to better serve the needs of KV families.
I regret that our efforts to build trust within the tenant community were evidently perceived as a threat by some. Furthermore, I wish to reassure you that the allegations conveyed in your letter are either factually incorrect, or are otherwise gross distortions of our ongoing dialogue with the KV community.
I am appreciative of your words of warning regarding the Martin Act. I am reassured by legal counsel, unconditionally and unequivocally, that I have not engaged in the marketing of real estate securities nor done anything that in any way approaches even a potential violation of the act.
In response to your requested clarifications I submit to you the following:
First, as a point of explanation, I held 12 ‘meet and greets’, one in each KV building entrance. Each event lasted approximately two hours. These were casual events where we took the opportunity to speak with individual residents, or depending on traffic, groups of residents. A notice for each meet and greet was posted in the lobby of each building prior to the event. As such, each KVTA building representative was invited to attend the meet and greet of his/her building. All other ‘meetings’ that you reference, including a gathering the fall of 2016 that I attended off-site at the request of a group of residents, was a component of our tenant engagement efforts. Note that I have also offered to engage residents jointly with the KVTA, through attendance of KVTA general tenant meetings, however the KVTA has thus far declined my offers.
Clarification #1: Contrary to what has been reported to you, I have not scheduled, nor has management scheduled, any meetings with groups of tenants regarding possible cooperative or condominium conversion, with the exception of meetings held on 11/21/17 and 12/11/17 with the KVTA and its legal counsel. We have no plans to schedule meetings on this subject, with the exception of continued discussions requested by KVTA.
Clarification #2: Not applicable. See above response.
Clarification #3: As mentioned above we have not been scheduling meetings with groups of tenants regarding possible cooperative or condominium conversion. Notwithstanding, many tenants have utilized our lobby meet and greets and various other points of interaction as an opportunity to raise the subject of possible future cooperative conversion. My standard response, when asked about this topic, is that any plan that includes affordable homeownership would require the broad support of KV’s resident community and of the State of New York, and would have to be a comprehensive plan that benefits not only tenants who have the desire and wherewithal to become homeowners, but also tenants who wish to remain renters.
Clarification #4A: I have not made a representation that the conversion process is imminent and I cannot fathom that anyone from management would have represented that the conversion process is imminent. I fully agree that any statements that the conversion process is imminent would constitute a misrepresentation of our ongoing discussions with DHCR.
Clarification #4B: I have not solicited interest in a possible cooperative conversion. As mentioned above many residents have broached the topic of a possible cooperative conversion in the course of our discussions. As you are aware, cooperative conversion has been of ongoing interest to KV residents, and a topic of conversation, for a number of years.
Clarification #5: We are compliant with the requirement of NYCRR 1727 – 6.3. KV management has met regularly with the KVTA to discuss housing company matters, and our property manager, Mr. Callagy, has previously communicated his ongoing availability to meet with KVTA. Furthermore, I met with the KVTA in July of this year to brief them on the feedback that I received from the lobby meet and greets. I thereafter attempted via email and letter to schedule additional meetings with the KVTA. Most recently, we met with the KVTA on two occasions at the office of their legal counsel. At no point have I declined a request from the KVTA to meet.
Supplemental clarification #1: We have never asked residents to sign a form indicating if they were interested in a cooperative conversion. We did maintain sign in sheets at our lobby meet and greets and requested that all attendees provide their name, apartment number, telephone an email address.
Supplemental clarification #2: We emphatically deny that we organized or participated in any discussions regarding the dissolution of the KVTA. We are aware that certain residents have raised the prospect of seeking the dissolution of the KVTA. When contacted by one of these residents, we replied that the KVTA is a tenant group and that matters pertaining to the KVTA bylaws are not under ownership’s purview.
We hope that this letter helps to clear the air so that we may continue the important discussions that we have been having with your agency and work toward a positive outcome for all parties. We are encouraged by your expressed desire to achieve the same, as well as your previously stated recognition of ownership’s financial interests.
Cherry Green Property Corp.