Bronx Mitchell-Lama Is Victim of DHCR “Revolving Door” Policy
By Vajra Kilgour

The Lafayette-Boynton housing development, in the Soundview section of the Bronx, has just been handed a double whammy: According to tenants, state deputy housing commissioner Otis Jones pushed through the reappointment of a managing agency with a number of former Division of Housing and Community Renewal employees on its staff—despite the fact that an agency the tenants preferred had submitted a much lower bid for the management contract. Jones himself managed the development, a four-building Mitchell-Lama complex, in the late 1980s. His performance raised serious questions among the tenants.

The agency that won the contract, Marion Scott Real Estate, Inc., had originally been awarded the management of the buildings on November 1, 1997. The tenants’ association was never notified of the appointment. According to Joann Thomas, who became chairperson of the association that month, Scott set the tone of his tenure from the start. He informed the tenant group’s 16-member executive board that “we are not a co-op board” and that he would not meet with them as a representative group.

Scott exacerbated security problems at the development by using security guards, who tenants say were irresponsible. Rent arrearages, already high, have been allowed to keep mounting up. The public hallways are badly deteriorated, and continuing problems with plumbing leaks, leaking windows, crumbling walls, falling cabinets, malfunctioning elevators, and loose bricks on the buildings’ exteriors have yet to be taken care of. Bonita Williams, a member of the tenants’ association board, says the repairs that are made are so slipshod that they only necessitate further repairs.

Nevertheless, tenants are about to be assessed a rent increase—the second one in the last year and a half. “This was intended to be a high-income development, which became middle-income when the original owner applied for the Mitchell-Lama contract,” says Williams. “I think Marion Scott just sees it as a gold mine—he’d like to get rid of all the working-class people in the hope that this could become a high-income enclave.”

Lafayette-Boynton comprises four buildings with 972 units altogether. In 1988, the buildings went into receivership, and the Division of Housing and Community Renewal took over their administration. It established a board of directors that consists of three DHCR employees and one tenant representative, the chairperson of the tenants’ association.

After the DHCR takeover, the buildings were managed by Otis Jones, who was then an employee of RY Management. RY’s tenure as management ended in 1991. In three short years, tenants say the reserve fund for the buildings had been depleted, dropping from over $1 million to less than $50,000—with, according to the tenants, nothing to show for it.

Under M&E Management, which took over from RY, tenants were charged for new appliances, many of which were never installed. Scores of tenants were allowed to stop paying rent, and arrearages rose to over $1.5 million. The warranty on the roofs was allowed to lapse, and the tenants had to absorb the cost of having them patched. Tenants took another hit when the insurance company used by M&E refused to pay off on claims when pipes burst in the walls. When the DHCR terminated M&E’s contract in late 1997, they gave the company 30 days’ notice—time utilized to trash the management offices in the main building.

In December 1997, a month after Marion Scott took over the buildings’ management, the tenants requested that the hiring process for managers include public bidding—as should have been done all along, but had not been up to then. In January 1998, Otis Jones—now a deputy commissioner at the DHCR—was quietly appointed to the governing board of the buildings. Tenants only learned this interesting fact in March.

Eleven managing agents responded to the DHCR’s request for bids. In June, they were interviewed at the DHCR offices, with Thomas and her attorney attending. Although it was not a formal board meeting and other members of the tenants’ association had a right to be there to observe the process, Jones excluded them from the meeting and would not allow the attorney to participate in the selection process.

On July 7, the governing board held a closed meeting to choose the new managing agent. Instead of following the normal procedure of considering lower qualified bidders, and despite Joann Thomas’ outraged opposition, the three DHCR members of the board voted for Marion Scott. Scott’s bid for building maintenance, $34,000 per month, was $12,000 more per month than the bid of the agency the tenants preferred, and included an additional $15,000 per month as a managing “refund.” The meeting lasted 15 minutes. “It took all day for me to get my blood pressure back down,” Thomas says. What’s particularly galling to the Lafayette-Boynton tenants—apart from the disregard for both their wishes and their welfare by the DHCR members of the governing board—is that Prestige Management, the agency they wanted, manages the Lafayette Morrison housing development, right across the street from them.

“The difference between the two developments is that one looks like a co-op, and the other one looks like a housing project,” says Thomas. “We’re just like stepchildren.”