Assemblyman Jeffrey Dinowitz has asked NYC Comptroller Scott Stringer to review and reject the contract between Department of Homeless Services (DHS) and Praxis Housing Initiatives Inc., the operators of a transitional housing shelter located at 5731 Broadway in Kingsbridge.
The city comptroller is able to object to a city contract’s registration within 30 days of it being filed with the comptroller’s office under certain grounds.
DHS informed Community Board 8 and elected officials that the facility at 5731 Broadway would be made into a homeless shelter less than 30 days before it was scheduled to begin operating by Praxis, whose CEO, Sven Jorgensen, admitted during a CB8 Land Use Committee Meeting that they had been in negotiations for some time to make the facility a shelter and had, in fact, been approached by Adolfo Carrion and Stagg Group, the building developers, months before DHS alerted the community. This allegedly occurred even as representatives of the Stagg group held meetings with CB8 and community committing that the facility would not become a shelter.
Dinowitz asked Comptroller Stringer to reject this contract given business practices by Stagg Group that some believe to be dishonest and questionable. The Stagg Group billed and marketed the building to elected officials and Community Board 8 as market rate housing with affordable housing units even as they allegedly made simultaneous efforts to sell it as a homeless shelter to Praxis and DHS. They applied for a 421-a tax abatement on the premise it was to be market rate housing and operated a website where people could apply to live at the building listed as market rate housing.
The building has instead been designated a transitional housing facility for homeless families. Praxis successfully secured a contract from DHS, with exorbitant prices set by Stagg per room and per apartment. According to the Assemblyman’s letter “Praxis will be paid over $300,000 per apartment by DHS for services to the families, exclusive of rent. DHS will pay much higher rents for each and every apartment compared to what Stagg would have charged, and the taxpayers will be footing the extra bill, plus Stagg will avoid real estate taxes for years. Why is the City getting such a bad deal? Stagg will not only receive a huge windfall, but they will not have to market the building, be concerned with empty apartments or pay to manage the building. They will receive these great benefits in addition to the huge 421-a tax subsidy.”
In Stagg’s most recent 421-a tax exemption application, belatedly amended as of August 14th, they increased the land costs of claimed 2014 land acquisition by at least a third from the previous application filed in January.
The matter has already been referred to the city Department of Investigations(DOI) by CB8 Land Use committee chair Charles Moerdler given Stagg group’s alleged dishonesty towards the community as well as the Community Board’s status as a chartered city agency and the matter may already be under investigation.
“Regardless of whether you support or oppose a transitional housing for the homeless at this site, I hope we would all agree that there must be honesty and transparency and that the city should make the best possible deal, and not hand a huge windfall to a controversial developer, “ said Assemblyman Dinowitz.
EDITOR'S NOTE:
Below is from my Riverdale column that will appear in Wednesday's Bronx Voice. It was written August 18th. I guess Assemblyman Jeffrey Dinowitz and I think alike, however read the last paragraph that the good assemblyman may not know.
Community Board 8 has currently many buildings that were built during the previous building boom, with several having some or many empty apartments. One such new building went up at the corner of West 236th Street and the Henry Hudson Parkway Service Road. A deal was struck with Columbia University to take over the building for staff housing. It was a win for the developer who would have no empty apartments on his hands, and the university who would have the needed housing for its staff.
Fast forward to this new housing boom of so called market rate housing, because the prices of new coops or condos are out of reach. Add in a developer who puts on a former Bronx Borough President who had appointed many community board members he was to face for 421A tax breaks on market rate housing his developer boss was suppose to build. Throw in a homeless crisis, and you have the perfect recipe for deceit and even more profits.
This is what Stagg Developers has done at the 5731 Broadway building site. Eighty-three market rate units for rental. How does one rent all these apartments quickly so another building can be built with the profits. Enter Former Bronx BP Carrion as the CEO of Praxis said to CB 8 was the deal maker for 5731 Broadway. Now something had to be done before the community board could stop this plan. Less than three weeks after the CB 8 Land Use Committee meeting it is announced that there will be a public hearing on this contract between Praxis and the DHS on August 17th. The contract will be effective starting August 15th however for all 83 units for a five year term at a price tag of over $26 million dollars or over $300 thousand dollars per unit. It is not stated just how much Stagg Developers will make on the deal, but at the end of the five year term is another four year option. All this and Stagg Developers will still own the building, and rent out the commercial/community facility space.
I just happened to see DHS Commissioner Steve Banks at a mayoral event here in the Bronx the day after the contract was signed. I asked him how can you have a public hearing two days after DHS signs the contract. His answer was that the public hearing was a mere formality, and the City Comptroller has to approve the contract now.
I was able to question a representative of Comptroller Stringers office a few night's later, and was told that unless there is something illegal the comptroller will approve the contract as is done almost 100 Percent of the time.
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