If you’re looking for a more informal, free-flowing discussion of coop issues, please join us this Thursday, November 12 at 7:00 pm in the community room (Section M). The Cooperatively Yours slate — Jim Keenan, Faith Schreier, Julian Swearengin, and Mike Turner — will be on hand to say hello and answer your questions.
You’ll be very enthusiastic about voting for all four of them after you’ve met them and heard what they have to say.
I was relieved this week to receive a totally not crazy letter from one of our coop’s attorneys.
In this case, the letter is from Mitchell Haddad, of Sills Cummis & Gross, in response to my several letters to board president Gary Altman about East River’s relationship with Jay Arthur Goldberg, the tax certiorari lawyer who has been named as a co-conspirator in the indictment against Assemblyman Sheldon Silver.
Mr. Haddad assures me “and any cooperators on whose behalf [I] claim to speak” that “as far as we are aware there is no agreement for referral fees or any sharing of fees and no such referral fees have ever been paid to board members or management.” That’s good news.
The question arose earlier this year when Silver was arrested — one of the schemes he’s accused of is bringing clients to Goldberg in exchange for referral fees, where those clients may have created a conflict of interest for Silver. When news of the federal investigation was first reported last December, East River and Hillman were both mentioned in the New York Times, with general manager Harold Jacob quoted defending our arrangement with Goldberg. Given the high profile of this case, I asked Gary Altman to clear the air by addressing the coop’s relationship to Goldberg. Altman had refused to do so for nine months.
With Silver’s corruption trial now in week two, and testimony about his relationship with Goldberg about to get under way, now seems like a good time to finally clear the air.
There’s an adage that East River directors have yet to learn, and it may cost all of us $1.5 million before the year is out. That’s how much phantom income the board wrote into its 2015-16 budget with an inflated flip tax forecast.
The board passed a budget three months late and $1.5 million short. It appears balanced only because the board majority inflated forecasts for flip tax revenue to $523,560 per month — even though the two months already in the books fell well short of that target.
How unrealistic is this forecast? Flip tax revenue of $5.7 million for the year would be more than in 2007, the height of the last real estate boom; more than in 2013 when the market finally bounced back (before falling again in 2014); in fact it would be our best year ever for flip tax revenue.
For comparison, Seward Park this year will barely reach $3.7 million in flip tax, and based on market projections has budgeted for even less next year. So does our board have a crystal ball? No — more like a crystal bubble.
The flip tax revenue at East River — 20% for first sales, 5% for all other sales — is our most unreliable income because we have no control over the real estate market. So why would the board choose such bullish projections? Because without this inflated line item, the budget for the current year would show a deficit of $1.5 million.
To cover that gap we’d need an 11.6% increase in maintenance fees. Of course, the incumbents running for re-election don’t want you to know about that maintenance increase until after the election.
But when their chickens don’t hatch, we’ll all be left with rotten eggs — 1.5 million of them.
We need honest accounting by the board and a strategy of increasing outside income to protect shareholders. Annual budget presentations by the board would keep cooperators informed and hold directors accountable to pass responsible, on-time budgets. If that sounds like the board of directors you want at East River, vote for JIM KEENAN, FAITH SCHREIER, JULIAN SWEARENGIN, and MIKE TURNER.
This Sunday, November 8, is It’s My Park Day at Corlears Hook Park.
Starting at 10:00 am, volunteers will be helping to beautify the park by planting daffodil bulbs and additional holly trees at the park entrances. Weeding and leaf raking will also be on the agenda.
Friends from Pillowtalk Fine Art will also be on hand with some arts activities for the kids — so please bring the family!
Friends of Corlears Hook Park will provide gloves, shovels, rakes, snacks, and water — all they need is you (even if you only have 20 minutes to help out).
Yesterday, the jury was seated for Assemblyman Sheldon Silver’s trial and opening statements from both sides were made.
The prosecution presented Silver as a man overcome by power, greed, and corruption. As presented by Assistant U.S. Attorney Carrie Cohen, Silver steered money and favors to people who, in return, hired the law firms Silver recommended. Silver then received kickbacks as referral fees, completing the circle of quid pro quo.
Silver’s defense attorneys, on the other hand, described his conduct as normal and legal.
The case turns on arrangements with two law firms — Weitz & Luxenberg, which specialized in asbestos litigation; and Goldberg & Iryami, tax certiorari lawyers. Jay Arthur Goldberg, the partner at Goldberg & Iryami has for many years represented East River Housing and Hillman, where Silver lives. After Goldberg was named a co-conspirator in the federal indictment, Hillman severed ties with his firm but East River continues to retain his services. (Board president Gary Altman has refused to answer questions about East River’s agreement with Goldberg.)
You can read more about yesterday’s day in court in the New York Times, Politico New York, and the New York Law Journal (free subscription required).
Million Trees NYC paid a visit to Cherry Street last week and planted ten new trees right alongside our property. Thanks to Michael Marino of Friends of Corlears Hook Park, who has been doing an amazing job bringing new life to the park and the surrounding area.
Assemblyman Sheldon Silver’s trial on federal corruption charges starts Monday. Silver was arrested in January on counts of fraud, bribery, and extortion. The trial is sure to make headlines for weeks, and even some of our neighbors will be called to the witness stand.
Maybe we’ll finally get an answer about East River’s involvement in Silver’s alleged kickback scheme — since our board president Gary Altman continues to ignore the question. News reports continue to surface about the Coop’s tax certiorari lawyer, Arthur Goldberg, along with allegations that Silver steered business his way in exchange for kickbacks.
The Hillman board voted to sever ties with Goldberg this year. East River did not, and has continued to retain him. If Gary Altman, as president of the board, thinks there’s nothing fishy about our relationship with Goldberg, why not just say so?
After all, it is Halloween.
The unsigned memo we all received tonight is obviously a deliberate attempt to suppress the vote in this year’s coop election by making one type of legitimate vote look like a threat.
General proxies are a standard way to vote in all corporate environments, including coops. In fact, when general proxies aren’t encouraged, the result is often a turnout less than a quorum and postponement of the election.
Last year, there were approximately 909 votes cast for board candidates. More than a third were cast by general proxy — more votes were cast by general proxy than were cast by shareholders actually attending the annual meeting.
Traditionally at East River, challengers have favored general proxies over directed proxies. Why? Because the board, with memos like these, has created an air of mistrust around the election process, and cooperators looking to oust the incumbents aren’t comfortable relying on the Coop’s own lawyer to handle their directed proxies properly.
Vote however you like. Of course you should not feel pressured. But if you want to vote for our endorsed candidates — James Keenan, Faith Schreier, Julian Swearengin, and Mike Turner — feel free to do so with one of the proxies attached to our flyers (or download one here: for building 1, building 2, building 3, or building 4).
The trick-or-treat sign-up lists are looking a little thin this year — don’t let our kids down! Sign up and buy some tooth-destroying treats to hand out to miniature zombies and superheroes on Saturday.
The lists were posted by management at the security desk in each building.
We have a great slate of candidates this year for the board of directors and house committee —
JAMES KEENAN is a native New Yorker and 9-year resident at East River. During his previous stint on the board he advocated for more communication with shareholders and more financial transparency. “I care deeply about the tradition and history of our neighborhood, but we must be willing always to stay open to new ideas that will improve our quality of life and strengthen our financial security.”
FAITH SCHREIER has been a cooperator for more than 46 years and thinks it’s time for a change. “We need new and caring directors who will trust and listen to shareholders. We have a right to know everything about our expenditures and we should be able to read minutes from board meetings so that decision-making is not all done behind closed doors.”
JULIAN SWEARENGIN is an attorney and father with 20 years’ experience at some of the world’s largest banks and law firms. “If elected, I would also work to ensure that your right to basic information is never violated, that the Board’s major decisions are transparently reported to you, and that the Board and the Cooperative are professionally and ethically managed.”
MIKE TURNER is an accountant and small business owner worried that the current board’s strategy of increasing our debt while reducing flip-tax revenue means a big maintenance increase is right around the corner. “We should be looking at every square foot to maximize our outside revenue and reduce the financial burden on shareholders.”
MICHAEL MARINO is a development officer at NYU and the founder of Friends of Corlears Hook Park. “In my time working with the park group I have become immensely adept at navigating various city agencies and bringing multiple community groups together.”
TED PENDER is a 13-year cooperator, retired horticulturist, and volunteer gardener throughout the city. “I am interested in improving the amenities for our Seniors (as I will soon become one).”
