Shadow #9
February, 1990

Double Cross Subsidy
Double Crosses Lower East Side

By Nashua

Since 1987, the Joint Planning Council (JPC), an umbrella organization of local housing groups, and Community Board 3 (CB3), trying to confront growing anger homeless people forced to live in parks and slumlord harassment, are promoting an idea for the use of abandoned city-owned buildings and vacant lots, called the "Cross-Subsidy Plan." Better known as the "Double-Cross-Subsidy", the plan would theoretically pay for the construction of 1,000 units of low-income housing, funded by the sale of city-owned property to luxury real estate developers.

This so-called"50-50 Plan" is opposed by neighborhood activists and squatters who call for a"100% Plan" to provide housing through the squatting and homesteading of abandoned buildings without substantial government subsidies. The "50-50 Plan" supporters call the squatters’ demand for autonomy and self-reliance unrealistic because the cost of developing units is often quoted at about $70,000-$90,000 each. However, the squatters ridicule these estimates, maintaining that adequate rehabs can be done for only hundreds of dollars per unit. Meanwhile, the City has been stonewalling the plan since HPD (Dept. of Housing, Preservation and Development) Commissioner Paul Crotty was replaced first by Anthony Gleidman, who resigned to work for Donald Trump’s organization, and then Abraham Biderman. The City has repeatedly transferred properties to luxury developers while thumbing it s nose at JPC as speculators laugh all the way to the bank over City Councilwoman Miriam Friedlander’s latest assurance that the "5050 Plan" is still on track. The number of double-crosses associated with the "Cross-Subsidy" is growing as investigators take a closer look at what has been going on in the Lower East Side over the past decade The following is a list of only some of the failures so far uncovered:

HOW THE 50-50-PLAN HAS FAILED

1. Last fall, the 12th Street Block Association thought they had finally convinced the City to reinforce and secure a building at 194 Avenue B, next to Sauer Park. The building was slated for rehabilitation in "Phase One" of the "50-50 Plan", but for years the City allowed to deteriorate finally sent a building, but the moments after the building collapsed.

As neighborhood residents gathered around the building, waiting for the City to tear it down, Deputy Inspector Michael Julian of the ninth precinct said that the situation was out of his control, as he nervously anticipated another mass protest. But Liberals from the 12th Street Block Association and JPC didn’t have it together. Friedlander arrived at the site, and shedding crocodile tears told the community "nothing can be done". That night, the building fell.

2. Luxury developers giving 50% of the Lower East Side to low income people? What a joke. In one building alone, at 72-74 East 3rd Street, a 20 unit condominium was developed out of three properties sold to developer and right-wing pro-death (Right to Life) candidate for mayor Henry Hewes for a total of $10.00–(yes, TEN DOLLARS!!) In return, Hewes and company agreed to rehab 20 one bedroom apartments and sell them for $50,000 and $60,000 a piece-an absolute steal in this neighborhood. Within two years, most of the original tenants, many who seemed to have gotten in on the deal through relations with the project manager Donald Capoccia, had sold their apartments for an average mark-up of $90,000 before moving on to other cribs. One of the insiders who profited from the 72-74 East 3rd Street deal is well known to activists fighting to defend the rights of homeless people to live in and have fire and shelter in Tompkins Square Park. His name is Samuel Turvey, and he presently lives in a co-op apartment at 131 Avenue B, which was once a low-income apartment house. Turvey is a member and co-spokesperson, along with rightwing CB3 member and D’Amato/HUD Scandal flunkie Antonio Pagan (see SHADOW #8) of the so-called "Tompkins Square Neighborhood Coalition", which seeks to remove ail homeless people from the Lower East Side, especially in the park.

According to people who know him, Turvey took the approximately $100,000 he made from selling his apartment at 72-74 East 3rd Street and soon bought into the 131 Avenue B co-op. When asked about his role in this, Turvey said he sold the 3rd Street condo because he got married and needed more room. Turvey says it was people "who knew Don (Capoccia)" that got the condos.

Henry Hewes, who says, "my role is small… I conceive projects and make the city applications and arrange bank loans", has yet another project in the works on East 2nd Street. He says that the lack of restrictions on the purchase and sale of condos in the 72-74 East 3rd Street deal was a result of the city not realizing the "implications" of the so-called "Dollar-A-Building" program.

3. 131 Avenue B, I the co-op that Sam Turvey bought into after milking the 72-74 East 3rd Street condo scam itself is an example of the wholesale rape of the Lower East Side by real estate interests. In 1981, Wayne Barret in the Village Voice wrote a scathing expose on the former low-income adult home opposite Tompkins Square Park. The Community Service Society (CSS), a wealthy private social service agency, owned the building for years until it fell vacant. In 1977, it was sold in a "straight business transaction" to a supposed non-profit group "Everything For Everybody", run by John ("Jack") Scully, the publisher of the now defunct "East Villager" newspaper, who promised to use the building to house the homeless and low-income people. CSS got no commitment from Scully, who paid only $50,000 for the building, which at the time housed 30 families. For two and a half years, Scully ran the building as an SRO (Single Room Occupancy) that was supposed to be operated by the tenants collectively. In actuality, it was run as a dictatorship with militant enforcers of Scully’s rules who terrorized residents as the building’s condition deteriorated, while Scully continued to raise rents. When the residents finally organized against Scully and his henchmen, Scully quickly sold the building to a group of real estate speculators led by vicious slumlord Howard Buck for $150,000, realizing a cool $100,000 profit.

Remaining tenants fought the new owners in court eventually, a Civil Court judge ruled that the tenants, including some who had lived there for several years, had "no statutory or contractual right to occupancy". That decision legalized a wholesale and violent attack by the new owners against the tenants. Vital services were cut off and the owners said the tenants deserved it because they were "squatters", as if that made them fair game. Former tenants say goons hired by Buck assaulted them in an effort to empty the building. Finally, after a winter with sudden fires, no electricity, no hot or cold water, shattered windows, and vacant apartments, the building was emptied, (further increasing the number of homeless people on the streets.) The owners then brought in well-heeled yuppie-types who run the building today. Sam Turvey, who is a leading member of a -front group for developers and their lackeys called the \"Tompkins Square Neighborhood Coalition", has been called an 11 asshole" by his associates speaking with the SHADOW. They say Turvey is "the kind of person who would want to throw the homeless out of Tompkins Square Park".

4. An example of how the City acts like a pit bull trained by the speculators and banks is the Joint Planning Council’s rehabilitation of the "Cube Building" at the corner of 2nd Avenue and East lst Street. The building houses 22 people and was developed over three years with Federal and State subsidies. JPC was able to get control of the formerly vacant shell just as the City was about to give it to luxury real estate developers for $1.00. (That price was for supposedly 11 unsubsidized" construction, but the City doesn’t count the free land and forgiven back taxes as a subsidy.) Because their proposal relied on subsidies, JPC had to pay $11,000 to the City for the deed. The City itself never contributed a penny to the project. While JPC’s effort is worthy of praise for it’s success in providing some housing, the group’s reliance on the government ties it’s hands and makes it subject to intimidation by the authorities.

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