Presto! Amalgamated co-operators can keep on cooking

The threat of a gas shutdown affecting 827 units at Amalgamated Housing Corp. has seemingly dissolved overnight. Assemblyman Jeffrey Dinowitz and state Sen. Robert Jackson succeeded in nudging state housing officials to the table Friday, May 5 for a meeting with cooperators, Con Edison, and representatives from the city’s buildings department.

Board members emerged triumphant.

“I have good news to share with my fellow cooperators,” board president Howard Kamiel wrote the next day. “There will not be any gas shutdown on July 1 unless there is an unforeseen emergency.”

The announcement was repeated at a “Meet and Greet” in Vladeck Hall the next afternoon, as residents milled about and chatted with U.S. Rep. Adriano Espaillat, Jackson, Assemblyman Dinowitz, and Councilman Eric Dinowitz. Bronx borough president Vanessa Gibson and Bronx District Attorney Darcel Clark also appeared, according to participants.

The Riverdale Press was barred from attending.

Homes and Community Renewal spokesperson Brian Butry confirmed the agency agrees a gas shutoff is unnecessary.

For now, shareholders in the state’s oldest limited-dividend housing company are breathing a sigh of relief. The specter of a gas shutoff has haunted them since December, when Amalgamated came up for its first periodic gas piping inspections required by Local Law 152. The stringent new safety test involves exposing gas pipelines to extremely high pressure and looking for leaks.

A plumber found defects in gas pipelines at Amalgamated affecting more than half of the development’s 1,486 units.

Had the inspections revealed any safety threats, the buildings department would have ordered an immediate shutoff, said buildings spokesperson Andrew Rudansky. The agency would not have scheduled a future shutoff in July.

“Our inspectors haven’t found any of those conditions here, so we wouldn’t order our partners at Con Ed to issue a shutoff order,” he said.

Limited dividend
budgets 101

The prospect of costly gas pipeline repairs has loomed at Amalgamated since the buildings department published Local Law 152 regulations in November 2019, commencing the new citywide inspection cycle two months later.

As most building owners fix their attention on the city’s ambitious energy regulations underway with Local Law 97, Amalgamated remains preoccupied with the older law.

Kamiel mentioned the gas regulations for the first time in the 2020 annual report to shareholders, describing a “worst case scenario” in which cooperators would need to cover $6.8 million in repairs in order to comply with the law.

Amalgamated cooperators currently pay the highest monthly rents of any limited-equity co-op New York Homes and Community Renewal supervises.

Private housing finance law dictates exactly how limited dividend housing projects are to determine their budgets, increasing rentals by the minimum amount necessary to cover the actual final cost of expenses essential to operate and maintain the development, make debt service payments, and meet other fiscal requirements.

But Amalgamated did not include the cost of gas piping repairs when it undertook the process of applying for a rental increase in 2021.

Instead, the board floated a new idea.

They planned to ask HCR to approve new $100 million mortgage through CBRE, Kamiel informed shareholders in the annual report dated May 14, 2021.

The new pot of money would finance new horizontal gas piping in the basements of all 11 buildings “pursuant to Local Law 152,” Zsebedics chimed in, plus a list of other capital projects.

The board anticipated closing by the end of the year, he wrote.

But that timeline was quite divorced from reality since the board had yet to solicit bids from contractors in order to reveal actual project costs, as required by HCR.

“Local Law 152 Gas Repiping” appears among a wish list of $30 million in capital expenditures appended to a preliminary budget document for fiscal years 2022 and 2023.

The item was projected to cost $5 million, and like all the other items on this page, was to be funded by “$100M CBRE refi.”

A sisyphean task

City council passed the new gas safety law in 2016 after a gas explosion in East Village left the neighborhood with deep scars. Co-op associations like Riverdale’s own Association of Riverdale Cooperatives & Condominiums, have attempted to highlight the toll on beleaguered board members.

Staying on top of regulations is an even more sisyphean task for low-income cooperators at the city’s dwindling number of Mitchell-Lama and limited dividend projects.

These buildings comprise a shrinking sector of the affordable housing stock in New York as a new batch of projects choose to leave the program annually. So-called “buy-outs” occur in eligible buildings after certain conditions have been met. As Amalagated Housing Corp. approaches its 100th birthday, there are vanishingly few units in limited dividend projects remaining.

“Many people complain about the lack of affordable housing in NYC, but no one discusses how the city’s regulations are making affordable housing unaffordable,” said Anne Marie Garti, a longtime Amalgamated resident.

The city and state expect low- and middle-income shareholders to pay for capital expenses, though they will never recoup the costs in a sale, Garti said.

“This is not fair,” and is only “driving up housing costs.”

Despite close oversight from HCR, Amalgamated is spending more than it’s taking in. The development exceeded its operating budget by $1.5 million before an assessment increase of $43.83 per room was approved last summer, board treasurer Ed Yaker noted in an annual report published in recent weeks. He attributed the outstanding invoices to the prolonged delay in HCR’s review of their application for an increase.

The board waited nine months for the agency to submit its preliminary determination in May 2022.

The power of one

As the Local Law 152 deadline loomed nearer, there was no plan in place to cover the cost of essential gas pipeline repairs or even a reliable quote on what the final bill would come to.

One Amalgamated cooperator took matters into his own hands this spring.

Eugene Tenenbaum informed HCR on April 30 of his intent to take legal action against Amalgamated for failing to follow the legal process to make essential gas piping repairs, and against HCR under Article 78 for failing its supervisory duty in the matter.

In four previous pro se suits against HCR, Tenenbaum proved a force to be reckoned with. He has lived at Amalgamated since 1992.

The recent rapprochement came just five days after his April 30 email, Tenenbaum was quick to point out.

In an email just before press time Tuesday he posited: “The plausible question arises: did Amalgamated allege the gas shut off to scare approximately 2,000 inhabitants? To mobilize them to petition everybody, throw everything but the kitchen sink and complain against HCR to pressure them to approve borrowing $100 million? And they miscalculated their strength and influence?”

In his view: “yes, that is exactly the case.”

Abigail Nehring is a corps member with Report for America, a national service program that places journalists into local newsrooms.