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University Avenue Cooperative Homes, the Co-Op that never was
by Lynda Carson ( tenantsrule [at] yahoo.com )
Saturday Sep 7th, 2013 3:04 AM
Allegations of corruption and fraud have arisen at University Avenue Cooperative Homes (UACH) in Berkeley, and the residents are afraid of being displaced and made homeless by a massive nearly $16 million rehab project that is expected to begin around the end of 2013!

University Avenue Cooperative Homes, the Co-Op that never was

By Lynda Carson - September 7, 2013

Berkeley - Allegations of corruption and fraud have arisen at University Avenue Cooperative Homes (UACH) in Berkeley. UACH is a 47 unit residential low-income housing project involving HUD Project-Based Section 8 funding, California Housing Finance Agency funding, funding from the City of Berkeley, and private investors.

Despite the fact that the residents of UACH have repeatedly been told through the years that they can take pride for being part owners of the low-income housing project, and are required to pay monthly carrying charges instead of rent every month to UACH, the plan to convert the City owned property to a limited equity cooperative housing project was never completed, according to several residents of UACH.

A sad tale of fraud and deception, UACH was developed as affordable housing in 1982 by a nonprofit organization named University Avenue Housing, Inc. (UAH), and the objective of the nonprofit organization was to convert UACH into a limited equity cooperative structure. An objective that was never fully carried out, but was hidden from the residents who were told they were buying into a limited equity housing cooperative by it's managers, and Resources for Community Development (RCD).

On September 5, 2013 during an interview with two residents from UACH that wish to remain anonymous, both residents stated that they believe that Charles West, the current property manager for UACH who works for the John Stewart Company, is involved in fraud and corruption at the low-income housing project.

According to the residents, Charles West resides in a three bedroom home that belongs to UACH with two adult children in their 30s. The residents believe that it costs around $3,000 a month in operating costs for the coop to cover the rent and salary of Charles West, for being the property manager of UACH.

Records show that Charles West filed the papers with the Secretary of State in California to incorporate University Avenue Cooperative Homes, Inc., on 07/25/1980, and the listing reveals that the corporation is still active. In addition, notices sent to the residents of UACH also reveal that Charles West is the property manager, and works for the John Stewart Company.

The problem with Charles West being a property manager at UACH for the John Stewart Company is that records with the Department of Real Estate in California reveal that Charles West is not listed as having a real estate license.

California state law requires property managers to have a real estate license when managing properties that are not owned by the company they work for. Charles West works for the John Stewart Company. However, Resources for Community Development currently owns UACH, and it appears that Charles West is not legally allowed to be a property manager for UACH.

The residents of UACH also say that Resources for Community Development (RCD) has weakened the Board of Directors at UACH. According to the residents, RCD says the 9 board members cannot operate as a board any longer, and RCD is currently in the process of dissolving the board.

Further confirmation of fraud and corruption occurring at UACH is documented at a June 14, 2011 Berkeley City Council meeting in a document revealing that when RCD agreed to take over the management of UACH in 1999, their strategy was to preserve the development as a multi-family affordable housing project, rather than converting it to cooperative housing. A multi-family affordable housing project that is not supported by the residents of UACH who want the properties to be a limited equity cooperative housing project.

It was around 1978 that a 55 year lease agreement was signed between the University Avenue Partners (UAP) and the City of Berkeley during the creation of UACH, with the lease agreement stating that the City of Berkeley will own both the land and capital improvements (buildings) developed by UACH, in 2036.

At that time, through it's Redevelopment Agency the City of Berkeley loaned $616,000 to purchase the land for the project, and gave an additional $443,603 to UAH, Inc., in grant monies which were then loaned to the partnership.

But it appears that the original 55 year lease agreement at UACH has been canceled between the partnership that included the City of Berkeley. On 09/12/2012 documents were filed in Alameda County to cancel the original 55 year lease agreement, that was filed in Alameda County on 11/02/1981.

Additionally, on September 6, 2013 UACH resident Roitissa Davis received a letter claiming that the lease agreement for UACH expires on Oct 22, 2013, and that all the residents will have to sign a new lease.

Despite the fraud and corruption occurring at UACH with the ending of the original 55 year lease agreement before 2036, on June 4, 2011 the Berkeley City Council voted to give Resources for Community Development (RCD) $890,000 in Home funding for the acquisition and rehabilitation of the 47 residential housing units known as UACH. As recent as April 3, 2012 the City of Berkeley voted to give an additional $53,100 to RCD on top of the $890,000 already given to RCD on June 4, 2011.

In addition to the nearly $1 million in funding freely given to RCD by the City of Berkeley for the rehab project that is expected to start around the end of 2013, on June 12, 2013 the California Tax Credit Allocation Committee granted RCD a whopping $1,400,000 in developers fees for the nearly $16 million rehab project being proposed at UACH.

It appears that the City of Berkeley is giving up ownership rights for the land UACH is located on in 2036, in addition to a cool $2.4 million going to the nonprofit housing developer, before the rehab project even starts.

Along with the fraud and corruption taking place at the project, the poor, elderly, and disabled tenants residing at the University Avenue Cooperative Homes (UACH) in Berkeley are being terrorized, and threatened with displacement by the massive nearly $16 million rehab project about to begin.

Indeed, to pay off the massive debt of $15,745,508 being used for the proposed massive rehab project, documentation reveals that RCD is already looking to fill 19 units at UACH with tenants earning as much as 50% of the local AMI. RCD wants to fill another 13 units with people earning as much as 45% of AMI, and an additional 6 units with low-income people earning as much as 30% of the local AMI. RCD also seeks federal Section 8 Project-Based funding for the project and it's 47 units, during a time of massive sequestration budget cuts that are already underfunding existing Section 8 Project-Based projects all across the nation.

According to the residents at UACH, they say that all the current households in the project are very low-income residents with incomes well below 30% of the local AMI.

During a recent interview with Roitissa Davis, a long time resident of 7 years at UACH with a seven year old son, she said. "I feel like I am being terrorized by this process and by RCD into going along with the massive rehab project about to take place. I am starting to feel as if I am already being made homeless by this process. This all brings up memories of when my family was homeless, when I was a child. My mother was single and we had to sleep outside at times when three of us were just kids during that period."

"This all brings up memories of when we used to go to Mc Donalds early in the morning to wash up and brush our teeth. Everyone knew we were homeless when we spent so much time in the bathroom, and I will never forget how horrible this felt when I was a child. I do not want my seven year old son to ever experience what it is like to be homeless, and I am afraid that this rehab project is pushing us out of our home. Who cares about a new sink or counter top if it means that I will be displaced and made homeless in the process? Some of my neighbors are beautiful including some that are old and in such bad shape they need full time caregivers. This rehab project is too hard on my family, and the poor elderly people living next door to me."

"I am speaking out about this and am asking that my local Councilman Jesse Arreguin, the full Berkeley City Council including Mayor Tom Bates should step forward and protect the low-income residents at UACH from being displaced from their housing, during this massive rehab project. My son and I, including my neighbors need some solid guarantees in writing from RCD, that we will not be displaced from our housing. We all want to be allowed to move back into our homes when the rehab work is completed. RCD brings us pizza at their meetings while threatening to displace us with this rehab project, when they should be bringing us some solid contracts to sign that guarantees we will be able to move back into our homes when the rehab project is finished. I do not understand why they do not use the word homelessness, when they talk about pushing us out of our homes? Homelessness is what this is all about, and what may happen to us in the process of being displaced from our homes. They treat us as if we are in the way of their rehab project, after they used us poor people as a means to borrow all the funding that is needed for the rehab project. This is not fair, and we are being mistreated."

Some of the residents are currently seeking legal representation regarding the fraud and corruption taking place at UACH. They are afraid of being displaced from their housing and made homeless by the massive nearly $16 million rehab project that is supposed to begin around the end of 2013.

Unfortunately for the residents at University Avenue Cooperative Homes, it is the housing Co-Op project that never was.

Lynda Carson may be reached at tenantsrule [at] yahoo.com


Comments  (Hide Comments)

by Lynda Carson
Sunday Sep 8th, 2013 4:36 PM
Clarification: UACH & Charles West

Several residents of University Avenue Cooperative Homes (UACH) came forward recently and had the following to contribute.

So far, the John Stewart Company and Resources for Community Development have declined to be interviewed, and have ignored my repeated requests.

For educational purposes, it is my hope that the following information below helps to shed a little more light on the workings of the John Stewart Company and Resources for Community Development, at University Avenue Cooperative Homes.

The John Stewart Company and Resources for Community Development are welcome to speak out and make a comment if any of the following information needs clarification.

The following information below was received on September 7, 2013.

Sincerely,

Lynda Carson

______________________

Hi Lynda,

I hope you don't mind if I  clarify a couple of items:

Charles West earns $60,000+ -- I think it's $68,000 but don't know the number for sure. That's his salary. He also gets full benefits, including a pension plan.

In addition to his salary + benefits, he also was allowed By The Board -- a Board that may not be exercising due diligence -- to retain his on-site residence for free! That is worth an additional + $3000/month to him, or more; and is funds that the UACH does NOT receive into its Operating Account.

CW is being exempted from filing the HUD form 5059 that is used to verify income for HUD-supported Section 8 house, because his income is over the limit and therefore he is being given free housing. This arrangement was ratified by JSCo legal advice, and RCD is complicit and agreeable. Meanwhile, the Coop struggles with deferred mainenance, and cannot give the maintenance staff a raise.

Also, I believe, because he says so quite often, that he also is still a Member, i.e., he was permitted to retain his membership, and his membership share which was an investment in the purported Co-op, and is worth money if the Co-op is dissolved.

All the member-residents have a share investment. The point is, should Charles West still be considered a Member if he is not Section 8? Should his housing be free?

This issue goes to the heart of the Coop. Is the board properly minding its business? That's where this issue goes. I don't think the Board adequately sought legal advice, outside of John Stewqrt Company, for this decision. I think that John Steqart Company as our "Managing Agent" and RCD as the "Owner's Agent" should have required more from Charles. and the Board on this issue. Instead, they used Charles -- and now we are all being defrauded or bamboozled not only as to Charles and his salary, but as to something much bigger that is our housing itself.

We still want to be a Coop. It is not truly the Board's faullt that they received flawed legal advice. It falls on the JSco and RCD. Charles is not the culprit -- it's RCD and JSco.