The Shadow #10
March-April 1990

More of the Sleaze Factor:
The Theft of the Lower East Side by Real Estate Interests
By Paul DeRienzo


After Public School 105 at 269-271 East Fourth Street (which was to become the ABC community Center) was abandoned by the city, various proposals for use of the building by local groups were turned down by the city. This included the Board of Estimate’s denial to "The Displacement Center For Families", and Community Board 3 (CB3)’s denial of support to "Harry Dance in Musical Theatre", to buy the building.

According to a chronology released by CB3, the City Department of General Services (DGS), which had proposed auctioning the building in 1983, decided to hold the property in 1986 until the completion of the Cross Subsidy Plan. However, in 1987, when yet another group, the "Lower East Side Community School", requested the property, the DGS postponed the auction.


According to documents acquired through the Freedom Of Information Act (FOIA), by 1987 the New York Foundation For Senior Citizens (NYFSC) was running into stiff resistance from Community Board 11 in East Harlem for a planned senior citizen project sponsored by NYFSC and funded by the Federal Department of Housing and urban Development (HUD) is Section 202 Program for Senior Housing. David Burns, a HUD economist based in New York City, told the New York Times that NYFSC obtained the Section 202 money after he was pressured by friends and cronies of NY Senator Alphonse D’Amato into approving the project and the site.

CB11 Chairwoman Betsy Colon says that NYFSC was unwilling to compromise and consider allowing a local group to run the proposed senior housing project. In October 1988, only days after-NYFSC was turned down by CB11 in a unanimous vote (with only two abstentions), George Dalley, staff director for Congressman Charles Rangel, received a letter from NYFSC director Linda Hoffman. Hoffman’s letter answered a request by CB11 for more information on whether or not the Section 202 project was "site specific". ("Site specific" means that the HUD money can only be used for a particular location that is not transferable). In her letter, Hoffman said "I have spoken to Martin Sckalor, Director of HUD’s office of housing, who has confirmed that if the sponsor changes the site, the money goes with the sponsor to the new site." However, a spokeswoman for the city’s Department of Housing, Preservation and Development (HPD), Catie Marshall, says that none of the Section 202 HUD money from the proposed East Harlem NYFSC project is being used to renovate the abandoned school building on East Fourth Street. A January 31, 1990 statement from HUD (also acquired through the FOIA) says, "approval has not been granted for an alternative site" to NYFSC. The HUD statement specifically points out that neither the Fourth Street school or a site at 78-92 Ridge Street (both within CB3 and both NYFSC projects) have gotten any HUD money.

According to HPD’s Marshall, the NYFSC project slated for the sit6-lof the ABC Community Center will be funded from the city’s own Capital Budget. The Capital Budget: ‘ is the fund that is supposed to pay for improvements and upkeep, of the city’s roads, bridges, sidewalks, and other infrastructures. The bones and arteries that hold the city together have suffered because the Capital Budget was seriously neglected during and after the near bankruptcy of New York City in the mid-1970’s. As a result, structures like the Williamsburg Bridge have been 7closed and steam and water pipes have been bursting with alarming frequency. The Capital Budget is currently facing a deficit of more than a billion dollars.

Former HPD Commissioner Abraham Biderman has said the city’s so-called "Capital Budget Homeless Housing puts Not-For-Profit service providers into the transitional and permanent housing business". He was quoted in a slick public relations pamphlet distributed by HPD called "The Ten Year Plan". The pamphlet makes the case for a Koch Administration program to supposedly spend $5.1 billion on low income housing construction. In 1986, Koch announced that "by 1993, every single vacant city-owned building that can be rehabilitated will be rehabilitated…"

In an exclusive interview with the SHADOW, former Right to Life mayoral candidate and real estate developer Henry Hewes confirmed that the thrust of construction on the Lower East Side will be shifting from luxury condominiums and co-ops to government-subsidized housing because of the city deficit and stock market collapse. Hewes also lays the blame for the shift on the neighborhood people themselves. He said "It’s terribly difficult to work on the Lower East Side because any effort to provide for a mixed range (luxury) development is rejected (by the community)… the opportunity to rebuild the Lower East Side has been lost to the downturn in real estate… there will be more subsidy housing on the Lower East Side." The plan sponsored by NYFSC would be to create a facility containing more than 80 units of temporary housing for the elderly. NYFSC would operate the facility as a social service agency, but it would not provide permanent housing. However, the NYFSC plan is just a drop in the bucket. The city shelter system is already facing growing numbers of people suffering from the AIDS virus.


One HYFSC board member is Congressman James H. Scheuer, who founded the group in 1968 as the "Bronx Foundation For Senior Citizens". Other members include Ann D’Amato (mother of the Senator), Alma Rangel (wife of Harlem Congressman Charles Rangel), Richard A. Brown (Rangel's campaign treasurer and congressional consultant), Joan Finkelstein (sister-in-law of City council President Andrew Stein), Deborah Smith Bernstein (a former aide to Sen. D’Amato), and Anthony Gleidman (former head of HPD, now working for real estate developer Donald Trump).

While two-thirds of all Section 202 Housing loans approved in New York State had a contribution to Sen. D’Amato involved in the deal, the NYFSC has itself received more than $20 million in Section 202 Housing funds from HUD since 1981.

Another benefactor of the HUD/D’Amato connection has been JOBCO, a Great Neck, Long Island construction company that has donated tens of thousands of dollars to Sen. D’Amato’s campaign. JOBCO has managed to land $20 million in HUD work even though the company’s work has been considered "incompetent". (JOBCO recently pulled out of another Section 202 project scheduled for the site of a community garden and children’s playground known as "La Plaza Cultural". They were chosen by a development group "Casa Victoria", now headed by right-wing CB3 member Antonio Pagan, who has been working to get homeless people removed from the neighborhood).


In 1987, the city’s Department of General Services authorized a sealed bid for a lease on the P.S.105 (ABC) building, effectively avoiding the Community Board’s requirement for an RFP.

The CB3 Chairman at the time was Luis Nieves, who is now under investigation by the FBI for his role in the HUD/D’Amato scandal which came to light last October. Nieves received a letter in May of 1988 from the city informing CB3 that NYFSC was the successful bidder. The lease term is 25 years, with an option for a 10-year extension. But an option that allows NYFSC to buy the building after 5 years at "current fair market value" circumvents the established political process.

Without a "Request For Proposal", the sale of the ABC building could be closed without going through the public scrutiny of the ULURP process for sale of city-owned land, a process that begins with hearings before the Community Board in the area where the project is being proposed.

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