"a brooklyn tale"

8/13/2019 "A Brooklyn Tale"

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It was a house divided against itself,but now, through planning, perseverance,and pluck, the shadow overNostrand Gardens has finally lifted.

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osrRAND GannENs wAS No cooD. Backin 1995, the board of that six-build-ing, 348-unit co-op on Haring Streetbetween the chromosome avenues, X and Y,in Sheepshead Bay, Brooklyn, was a housedivided against itself, with different factionssuing each other in court.

Frank Lovec'e is the author of The X-Files Declassified.

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A co-o1t grows in Brookh',? (from left to right)j former board director Mnrh' Lein, superintendent Jint Porter,site manager Jennif'er Christntan, and board treasurer Robert Rappaport.Its buildings were fading fast, withnecessary maintenance delayed be-cause of money woes. It had narrowlyavoided default. There were chargesand countercharges of fraud. impro-prieties, and physical intimidation. Asthey still say in that part of Brooklyn,"Oy, vey..."But a dozen years can make a dif-f-erence. Today. Nostrand Gardens isa handsome and spruced-up enclavefilled with families and first-time buy-ers. a multi-cultural enclave whereAsian, Jewish, Russian, Spanish. andvarious combinations thereof all liveas though they were in some SesameStreet by the bay. There's a reserveTurhulent YearsThis is the first of the articles in0 new series callecl "TurbulentYears," which revisits troubledproperties that Habitat reported onin the 1980s and 1990s. "A Brook-lyn Tale" is u.follovr-up to " ShadowOver Nostrancl Gardens" in theMarch 1995 issue.

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fund of $1,650,000, says board presl-dent Flora Berkowitz, and that's afterall the refurbishing of late. Sure, thereare problems - a September 2002 mur-der at the nearby New Active Car andLimo on Avenue Y was an anomaly inthe generally quiet neighborhood. But,on the positive side, how many co-opscan claim to be within walking dis-tance of Randazzo's Clam Bar and theSheepshead Bay Pier?

In the 1990s, however, "it's really true,we were going down," says Berkowttz,a feisty warrior and nonpracticing realestate agent universally known as Flo."Looking around, our place was reallydeteriorating. It was really very bad.And we had to do something about it."And they did. What was it like be-fore? As they also say in Brooklyn,., "Don't ask Okay, alright already, letme tell you...."The Eorly Yeors

The Nostrand Gardens Cooperativerose in l95l with the help of the Na-tional Housing Act. It was one of thefirst co-ops built under the Depression-era act's Section 213, a mostly postwarurban-development effort that insures

private-lender mortgages, includingthose for new construction. NostrandGardens, self-managed by its share-holders for its first four decades, ironi-cally weathered New York City's 1960sand '70s downturn only to find troublein the 1990s boom years.The trouble had started a little ear-lier, coinciding with the l98l-91 co-opboard presidency of a former Rikers Is-land corrections officer, Captain MikeToffel - who, as later board presidentDavid Gorenstein told Habitat in 1995,"ruled with an iron fist, and would shutpeople up by telling them, 'You're donenow."' The l3-member board was fre-quently riven with factions and secre-cy, especially regarding finances. It allcame to a head when the co-op's origi-nal 40-year loan from the federal De-partment of Housing and Urban Devel-opment (HUD) was about to come due,in July 1991. Although only $270,000of principal was owed, well, NostrandGardens didn't have it.A splinter group of board membersand other shareholders got together in agarage to form the Committee to SaveNostrand Gardens. (Why a garage? Be-cause Toffel wouldn't let them to use


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Stairwell at Nostrand Gardens: common area repairs, from soup to nuts.Clean-Up Time The Nostrand Gardens Proiect Listln 2004, Nostrand Gardens began the first of its many improvement proj-I ects. According to manager Jennifer Christman, the work started with themailbox replacement - and then stalled for two years. When James Porter washired about two years ago, the board was struggling with an underperformingengineering company. "No work was getting done," Christman notes. "Allthat was happening was a lot of bids were being received. No one knew whatwas going on or how to proceed. Everything was dragging out."Porter offered to help as project manager. The board then fired the engineer,used his specs, and hired an engineer to work per diem on the inspections andpermits. Porter and the board designed new hallways, doors, and lighting.They went to stores and researched prices and companies for the jobs."We did some of the work in-house; hallway fixtures, teffazzo floor restora-tion, hallway light installation," observes Christman. "Knowing that, we wereable to bargain with the contractors more cost-effectively."

the common area meeting room.) Thecommittee filed a lawsuit in Novemberl99l to oust the board. Accusationsbegan iirculating that the board hadexhibited suspicious patterns of undoc-umented expenses. HUD took every-thing seriously enough to tell the boardto resign - which it did on December31, 1990 - and that the next boardmust hire another managing agent. Thenew board retained Elm Management,which found Nostrand Gardens insuch financial disarray that the co-opcouldn't even buy heating oil withoutputting up security deposits and relyingon Elm's leverage with suppliers.The new board discovered what ap-peared to be fraud and embezzlementon the part of its predecessor. Financialrecords were in disarray - many can-celed checks, bank statements, finan-cial reports, and board minutes weresimply missing. In October 1991, theboard hired a forensic accounting firm,Kessler & Associates, which spent twoyears investigating. By 1994, the firmhad uncovered enough evidence for theboard to file a civil complaint againstToffel, five other board members, andseveral vendors who, the complaint al-leged, slipped Toffel kickbacks in ex-change for excessive payments. Toffelallegedly kept the co-op checkbooklocked away and wouldn't let anyoneelse look at it.Like GoodFellas without the guns,the 3O-page complaint is a sad, shock-ing litany of skimming, forged checks,and a bookkeeper who told Habitat in1995 that he was forced to give kick-backs and to let himself be misrepre-sented as a CPA out of fear "for my andmy family's life." The New York StateAttorney General's office even got in-volved, charging three vendors withcriminal felony complaints.

That same year, however, the cash-strapped board 'Just decided to dropthe case," says Nostrand Gardensmanager Jennifer Christman of Wen-tworth Property Management, theco-op's current agent. "They didn'thave enough proof. There was nooutcome. It was just dropped, plainand simple." To ttiis day, Berkowitzbelieves Toffel "got away with it."(As to where he is today, he had resi-dences both at Nostrand Gardens andin Boca Raton, Florida, and movedto his Florida home sometime after-ward. The only two "M. Toffel" list-ings in Florida are an unrelated manin Delray Beach, and a disconnectednumber in Pompano Beach.)

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Mail Boxes ReplacementGarage Door ReplacementSecurity Cameras InstallationHallway Painting RestorationHallway Tile (Materials)Hallway Tile (Installation)Fire Escape RestorationIntercoms RepairedHallway Lighting (Materials)Hallway Lighting (Installation)Water Main ReplacementBoiler Valve ReplacementBrick PointingNew Iron GatesEnergy ConservationBasement Windows ReplacementNew Entrance Doors'New Front Canopies and Entrances

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The Co'op lodoyNostrand paid off the HUD loan in1993 and hired a new managementcompany, Britvan Realty Associates.(Elm Management was put out of busi-ness six years later, after its principalpled guilty to taking kickbacks. Christ-man says Elm had been dismissed be-cause "there were rumors of impropri-ety - no solid facts - that got back tothe board. There were questions abouthigher-ups in the company, and theboard said, 'Let's move on."')In 1994, the nonprofit CommunityPreservation Corporation granted theco-op a $2,840,000 mortgage. Thatmoney allowed Nostrand to install newboilers and undertake many other long-deferred repairs and refurbishments. Atthat point, what the co-op didn't wantwas to become a landmark legal prec-edent, but that's just what happenedbecause of board and managementinattention and inaction. The 1995 de-cision in Nostrand Gardens Co-opvs. Howard found the cooperative atfault for not having done anything, af-ter repeated notice, about "excessivenoise emanating from an apartment... throughout the late night and earlymorning hours," and held that the co-ophad failed to take any "effective steps"to abate the nuisance. The shareholderwho began this lawsuit, said the court,was entitled to a 50 percent abatementof maintenance. One critic of the deci-sion wrote the case "demonstrates thejudicial tendency towards misplaced li-ability; i.e., a victim of wrongdoing, andnot the actual wrongdoer, is made topay." It's a criticism that oddly suggestsit's okay for a co-op to ignore repeated,valid habitability complaints. NostrandGardens learned the hard way that youcan't.

This happened the year after FloBerkowitz moved in. She went on to jointhe board in 2000, and, two years later,helped shepherd the co-op through anequity loan from HSBC that paid offthe principal of the roughly 8.35 percentCommunity Preservation Corporationrefinancing. The new equity loan, witha fixed rate of 5.35 percent, "enableiS usto have the money to go forward to dothe construction work."You'd think they'd be out of the woodsthen. But no. "We made a lot of mis-takes," Berkowitz admits, "because wedidn't have the right crew taking care ofthings." Between the time it hired Elmand the time it hired Wentworth, shesays, the co-op's quest for a managing

agent yielded "a few people in betweenwith no merit. We had to get hurt be-fore we finally got the right people."In addition to Wentworth's Christman,Berkowitz praises the "help and perse-verance" of current superintendent, JimPorter.Porter, who's been there two years andoversees a staff of four porters and onehandyman, ticks off the list of recentimprovements: "We got all the hallwayspainted, new lighting fixtures put in.new fronts to the buildings - meaningwe put in canopies, removed the oldfronts, and put in new doors and new

entrances - and we tiled the hallri'ar:.We have new laundry rooms. We have anew company." Christman adds that se-curity cameras were installed two yearsago, augmenting the lon_q-standing se-curity guards. and that new lobby mail-boxes were installed. Berkowitz notesthat the on-site playground has beenrenovated, and that the landscaping hasbeen contracted out.

"The work that's still comin-s up,"says Porter, "is [refurbishing] the out-side curbing on the street, trimmin-9the trees, and waterproofing the foun-dation." A vintage recreation room is

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also on the schedule for spiffing up."It's the original 1950s rec room - eventhe chairs are the original," says Porter."They're not big fans of that," he says,chuckling. "When they rent it, they wantpeople to be in the year 2007, not 1951."The improvements, observes Berkow-itz, haven't made the maintenance sky-rocket. 'A two-bedroom is about $600 amonth, and a one-bedroom is five-and-change." Remarkably, "that includes gasand electric. All utilities."Still, what exactly accounts for theturnaround? Aside from ousting a boardthat had questionable practices, the thingBerkowitz keeps coming back to is asingle word: perseverance. There's stillsome shareholder apathy to overcome.The board currently sits 11 members;thenumber varies between 9 and 13. "Somepeople have resigned and we haven't re-placed them," Berkowitz says. "We're go-ing to have elections at the end of the year.A lot of people don't want to give up theirtime and energy to devote the time to be-ing on the board. It's very rewarding," shesays, "but it's frustrating, too."The board and Christman are "try-ing very hard," she says, to reach out toshareholders to get them to serve. "We'vegot a slight problem because the peoplemoving in here are not all English-speaking. The majority of them movingin now are Russian; we have four mem-bers of the Russian community on ourboard. They're all from different back-grounds, [including] an engineer."The financial scandals of the past arealso history, she says. "We're very hon-est, to the penny, to the dollar," Berkowitzsays. "Nothing is kept secret here, every-thing is written in the books. There wasnothing like that before. He was runningthe entire thing himself," she says of Tof-fel, the former board president.

The co-op's accountant, Frederico G."Fred" Cipriani, of Cavalcante & Com-pany in Brooklyn, credits the turnaroundon "an extremely proactive board of di-rectors, who implemented a flip tax onall unit sales and [bring] constant dedi-cation to the budget and actual spendingof the cooperative, and [on] a manage-ment company and an attorney who arevery knowledgeable of the industry."Described by one shareholder in 1995,not unkindly, as "like a retirement home,"Nostrand Gardens now attracts "parents,young people, and first-time homeown-ers," says Christman. 'A lot of families.We have grandparents in one apartmentand their children in another."

Or, to put it another way: thatthen, this is Nostrand. wasH

"a brooklyn tale"

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