Co-op City is the largest cooperative housing development in the world. It is located in the Baychester section of the Borough of the Bronx in northeast New York City. Situated at the intersection of Interstate 95 and the Hutchinson River Parkway, the community is part of Bronx Community Board 10. If it were a distinct municipality, instead of part of Bronx county, it would be the 10th largest “city” in New York State. Nearby attractions include Pelham Bay Park, Orchard Beach and City Island.
Co-op City is on the site of Freedomland, a former amusement park. Prior to housing that theme park, a small municipal airport was established there. [Not really – The airport was only proposed, drawings made, but no groundbreaking ceremony – never built – check with Bronx County Historical Society] When traveling into the city southbound from Interstate 95, it is one of the first sights a traveler sees and a vivid example of New York’s urban immensity.
The project was sponsored and built by the United Housing Foundation, an organization established in 1951 by Abraham Kazan and the Amalgamated Clothing Workers of America. It was designed by cooperative architect Herman J. Jessor. The name of the complex’s corporation itself was later changed to RiverBay at Co-op City.
The construction of the community was financed with a mortgage loan from New York State’s Housing Finance Agency (HFA). The complex defaulted on the loan in 1975 and has had ongoing agreements to pay back HFA, until 2004 when it was financially unable to continue payments due to the huge costs of emergency repairs. New York Community Bank helped Riverbay satisfy its $57 million mortage obligation, except for $95 million in arrears, by refinancing the loan later that same year. This led to the agreement that Co-op City would remain in the Mitchell-Lama Housing Program for at least seven more years as a concession on the arrears and that any rehabilitation that Co-op City took on to improve the original poor construction (which happened under the State’s watch) would earn credit toward eliminating the debt. By 2008, Riverbay had submitted enough proof of construction repairs to pay off the balance of arrears to New York State.
Co-op City is situated in The Bronx, at the northeastern edge of New York CityMismanagement, shoddy construction and corruption lead to the community defaulting on its loan in 1975. The original Kazan board resigned and the state took over control. Cooperators were faced with a 25 percent increase in their monthly maintenance fees. Instead, a rent-strike was organized. New York State threatened to foreclose on the property, and evict the tenants – which would mean the loss of their equity. But Cooperators stayed united and held out 13 months (the longest and largest rent-strike in United States history) before a compromise was finally reached, with mediation from then Bronx Borough President, Robert Abrams, and then Secretary of State, Mario Cuomo. Cooperators would remit $20 million in back pay, but they would get to take over management of the complex and set their own fees.
The shares of stock that prospective purchasers bought to enable them to occupy Co-op City apartments became the subject of protracted litigation culminating in a United States Supreme Court decision United Housing Foundation, Inc. v. Forman, 421 U.S. 837 (1975).
In October 2006, Charles Rosen, who was the executive director of The Gloria Wise Boys & Girls Club of Co-op City, and Jeff Aulenbach, a deputy executive director, pled guilty to charges of fraud and financial mismanagement. Rosen pleaded guilty to felony charges of grand larceny and forgery, and a misdemeanor count of obstructing government administration. Aulenbach pled to the same, except the forgery charge. They pocketed $1.2 million – of which $875,000 was loaned to the then radio start-up Air America Radio (the money has since been paid back) – of city funds meant to be used for social programs. The Boys & Girls Club of America cut ties with the Co-op City branch and New York City initially withheld $9.7 million, putting the club in danger of closing. Eventually, the organization reorganized – replacing the director, board and 90 percent of its staff – and reopened. Co-op City residents presented Bronx state Supreme Court Justice John Byrne with petitions and hundreds of letters asking for jail time, but – in a plea deal – Rosen was ordered to pay $38,575 and Aulenbach $32,363 in restitution to The Gloria Wise Club. Both also must pay a $5,000 fine to the City and Rosen will be barred from working for a (NY) non-profit for 3 years. Charlie Rosen had been a longtime and respected community activist, best known for leading the year-long Co-op City rent strike in the early 1970s.
In September 2007, a report by the New York Inspector General, Kristine Hamann, charged that the Division of Housing and Community Renewal (DHCR), which is responsible for overseeing Mitchel-Lama developments, was negligent in its duties to supervise the contracting, financial reporting, budgeting and the enforcement of regulations in Co-op City (and other M-L participants) during the period of January 2003 to October 2006. The report also chided Marion Scott management for trying to influence the Riverbay Board by financing election candidates and providing jobs and sports tickets to Board members and their family/friends – all violations of DHCR and/or Riverbay regulations. The DHCR was instructed to overhaul its system of oversight to better protect the residents and taxpayer money.
In October 2007, a former board president, Iris Herskowitz Baez, and a former painting contractor, Nickhoulas Vitale, pled guilty to involvement in a kickback scheme. While on the Riverbay Board, Baez steered $3.5 million in subsidized painting contracts for needed work in Co-op City apartments, to Vitale’s company, Stadium Interior Painting, in exchange for $100,000 in taxpayer money. Ms. Herskowitz Baez was sentenced to 6 months in jail, 12 months probation and given a $10,000 fine in March 2008.
