Yes, this is the same property where a 15 year old girl was pimped out by St. Alban’s hood rat Joseph Gilbert for four months (http://queenspress.com/queens-man-indicted-for-sex-trafficking/). But let’s go back several years to see how money bags Flake made a killing on this property.
Certainly the lord works in mysterious ways, especially when a huge profit is to be made.
AND for you Jamaica sheeple who drink the Flake Kool-Aid, this says much about your false idol Flake and company. And you though he was just doing this out of the goodness of his stone cold heart for the seniors.
Still no comment from the Flakes and Greater Allen Cathedral Church on the pimping out of the 15 year old girl at this senior residence on Merrick Blvd…………..and of course nothing from local elected officials or community leaders.
From New York Times:
For 25 years, the Rev. Floyd H. Flake’s Greater Allen African Methodist Episcopal Cathedral of New York successfully ran a 300-unit apartment complex for the elderly in southeastern Queens.
The two eight-story buildings, built and subsidized with public money, were well maintained by one of the church’s charities. There was also a city-financed van service, a meals program for seniors and a women’s shelter, all on the site.
Then, about four years ago, the church sold the project for $14 million to a for-profit partnership. Tenants received a notice in the mail, and Mayor Michael R. Bloomberg hailed the transaction as contributing to his efforts to preserve and build housing for moderate- and low-income residents.
But the announcements did not reveal the identity of the new controlling owners: Mr. Flake, the Rev. Edwin C. Reed, who was then the church’s former chief financial officer, and two real estate developers, Peter G. Florey and Leonard T. D’Amico.
After taking ownership, Mr. Flake, one of the city’s most politically influential pastors, and his partners decided how to split a $1.1 million fee for overseeing renovation work at the project. They also decide alone how much to pay themselves for their services from the $4.3 million in cash after expenses that the city expects the property to produce through 2018.
The sale shows how lucrative financial deals involving public money and well-connected insiders can be arranged without competitive bidding and with little public attention. Mr. Flake, a former United States representative, has remained a political force in New York as the church has expanded under his leadership to some 20,000 parishioners and an annual budget, including subsidiaries, of $34 million, according to its Internet site.
His endorsements, never assured based on political party, are valued for his perceived influence over his parishioners and in the wider African-American community, and he has backed Mr. Bloomberg in his last two campaigns.
The sale received all the required legal approvals. But irregularities in the application appear to have gone unaddressed during a short, expedited review.
William Josephson, who headed the attorney general’s charity bureau from 1999 through 2004, said the sale sounded like the sort that should have received a heightened level of scrutiny because Mr. Flake and Mr. Reed had roles as both sellers and buyers.
“Clearly, it’s not an arms-length transaction,” Mr. Josephson said.
The sale was approved in late 2006 by the office of the state attorney general, which was then led by Eliot Spitzer, who had just been elected governor. The lawyer who filed the papers with Mr. Spitzer’s office was at the time also serving as a consultant to Mr. Spitzer’s campaign and the treasurer of the campaign of Mr. Spitzer’s running mate, David A. Paterson, the current governor.
The final approval came from a court in Queens. Five hours after it was filed, the nearly 600-page petition was signed by both a judge and, serving an administrative role, the clerk of the court, Gloria D’Amico, the mother of Mr. D’Amico, one of the partners.
The purchase required no cash investment from the partnership, and it was not open to bidding from others. The deal, which included plans for the renovations, was financed with $21.3 million in loans and cash from government programs intended to pay for the rehabilitation of apartment buildings for low-income elderly people. It is unclear how much of that work was ever accomplished.
Mr. Flake’s finances became a matter of public curiosity this year when he emerged as a minor partner in a bid to operate a casino at Aqueduct Racetrack in Queens. Mr. Flake, with a stake of less than 1 percent, said he was motivated by the real estate development potential, but he withdrew just as all investors were required to disclose their financial holdings. The bids were later thrown out amid allegations of political favoritism, and the bidding process is now the subject of a state investigation.
Through his office, Mr. Flake refused repeated requests from The New York Times to talk about the sale of the senior housing project and his role as a beneficiary. His office referred questions to Mr. Florey, with whom Mr. Flake had worked on many other of the church’s real estate projects.
Mr. Florey, who would respond only to questions submitted in writing, said the rehabilitation work had been a success.
“In short, we feel that by making these upgrades we have made a great community even better,” Mr. Florey said in a statement.
Mr. Flake took over leadership of the church, then a parish of about 1,400, in 1976. He had been serving as dean of the chapel at Boston University and has said that he saw the post at what was then called Allen A.M.E. Church as an opportunity to test his ideas about churches performing community development.
The Allen A.M.E. Senior Citizens Housing Complex was his first major real estate undertaking. In 1978, the city sold nearly two acres on Linden Boulevard to one of the church’s nonprofit affiliates, the Allen A.M.E. Housing Development Fund Corporation, for $150,000. The federal Department of Housing and Urban Development provided a $10.7 million mortgage, and the complex opened in 1981.
Mr. Flake’s influence grew. He was elected the area’s United States representative in 1986. Less than four years later, prosecutors charged Mr. Flake and his wife and co-pastor, Elaine McCollins Flake, with tax evasion and embezzlement. A judge threw out much of the government’s case, and prosecutors dropped the remaining charges.
Mr. Flake went on to thrive both on Capitol Hill and from the pulpit. Then, in 1997, just as construction of a new $23 million cathedral was being finished, he abruptly resigned from the House of Representatives, citing a desire to focus on the church.
He has only grown as an engine of economic development in Queens, having overseen the church’s development of a strip mall, a private school and other residential and commercial real estate projects. The support of the city — through property tax breaks, zoning changes and low-cost properties for redevelopment — has been central to that growth.
As the church’s reach grew, so did the wealth of Mr. Flake and his wife. After years of living in a church-owned house near the cathedral, in 2001 they bought a 7,200-square-foot house in Old Westbury, N.Y. Church affiliates have paid the couple nearly $1 million in annual salary in recent years.
All the while, the senior citizen apartment complex remained a central legacy of Mr. Flake’s career.
By mid-2006, Mr. Flake had begun the process of shifting the senior center to private, for-profit ownership.
The deal was made possible by a change in federal law in 2000 that made it attractive for senior apartment complexes built under a federal housing program to refinance their old HUD loans. The goal was to supply an infusion of money so that the aging buildings could be renovated and remain affordable.
The new law allowed for-profit businesses to be involved in owning the projects for the first time, and it fit well with one of Mr. Bloomberg’s most ambitious social initiatives: to build or preserve 165,000 units of affordable housing. In late 2004 the city’s Housing Development Corporation began encouraging eligible senior complexes to refinance their old federal loans.
The deals are described as refinancings. But in order to take advantage of certain tax credits, they typically involve a “sale” of the property, often one that exists only on paper. The properties are not listed for sale on the open market and rarely change hands.
For most charities seeking to refinance, HUD requires that the charity that built the project, or another charity with experience running similar projects, remain in control by being the only member in a general partnership. But the Allen A.M.E. loan was issued during a five-year window in which the federal housing agency had no jurisdiction over how the partnership was made up.
“They could sell it to you and your uncle, because they don’t need HUD’s permission or approval,” said Scott E. Fireison, a lawyer who specializes in such deals from the Washington office of Pepper Hamilton, a national law firm.
Mr. Flake and his partners structured the deal so that they control 99.99 percent of the general partnership through two for-profit limited liability companies. The remainder is held by a nonprofit entity, headed by Mr. Florey and Mr. D’Amico, necessary to receive a property tax break from the city.
The structure allows the four partners to decide what fees to pay themselves, according to several experts who reviewed the structure of the partnership at the request of The New York Times.
The partnership is obligated to pay the $14 million new mortgage for the housing complex. But subsidized rents and strong demand for the apartments all but guarantee a positive cash flow. After paying expenses, including property taxes and the extra costs of the larger mortgage, the property’s annual net cash flow should climb steadily to more than $500,000 by 2017, according to an analysis by the city’s Housing Development Corporation.
At the time of the deal, apartments in the project rented for an average of $962 a month, with the federal Section 8 subsidy program covering about 70 percent of the total.
The partnership is not required to publicly disclose its finances. Mr. Florey declined to address what fees the partners have paid themselves or whether any agreement precludes Mr. Flake from paying himself fees.
The Approval Processes
The review of the sale fell to the state attorney general’s office and the State Supreme Court in Queens, as required by state law when a charity sells “substantially all” of its assets.
The review is supposed to evaluate whether the sale price is fair and to ensure that the board of the charity selling the property has approved the sale.
But the petition filed with the court shows that the charity’s board approved the sale at $17 million, not the actual sale price of $14 million.
And the list of the five board members who approved the deal includes two church leaders who were not listed as board members in tax returns before or after the sale.
Joan E. Flowers, a Queens lawyer, filed the petition with the attorney general’s office on Nov. 9, 2006, two days after the election that elevated Mr. Spitzer and Mr. Paterson to governor and lieutenant governor. Ms. Flowers was at the time a consultant to Mr. Spitzer’s campaign and the treasurer for Mr. Paterson’s.
The attorney general’s office approved the sale on Dec. 11, 2006. A spokesman for the current attorney general, Andrew M. Cuomo, said the office’s records show that the petition received no special treatment.
Two days later, Ms. Flowers filed the petition with the State Supreme Court in Queens. In a handwritten note, she requested an emergency decision.
The court obliged. Augustus C. Agate, the judge who signed the order five hours after the petition was filed, said through a spokesman that he conducted a “perfunctory” review of the first six pages of the filing, a level of scrutiny he believed was normal for the court’s emergency section. “The attorney general’s stamp is on there,” said the spokesman, David Bookstaver. “As long as the papers are in order, they get signed.”
He added that the judge had been unaware that the court clerk’s son was one of the partners.
The clerk, Ms. D’Amico, did not respond to requests for comment.
The Planned Renovations
Today, it is hard to tell to what extent the very things the transaction was meant to achieve — millions of dollars in renovations — have actually been done. Even before the change in ownership the complex had been “well maintained” with “relatively new” thermopane windows and a six-year-old roof, noted Kathleen M. Carroll, the Queens-based appraiser hired by Mr. Flake’s partners, in her 2006 report.
Nonetheless, the plan called for $4.4 million to be spent on construction. That money was to come from the $7.3 million in proceeds from the sale of low-income housing tax credits, an indirect federal subsidy, that the project was awarded.
Mr. Florey and Mr. D’Amico’s company, D&F Construction Group, served as the contractor for the improvements. Mr. Florey said the work included the installation of 240 security cameras, new kitchens and work on the roof, the boiler and the plumbing and electrical systems.
“Age and functional obsolescence of the buildings’ components were the primary impetus for the upgrades,” Mr. Florey said in a written answer to a question submitted to him.
Tenants at the complex said they recalled their units getting new toilets and kitchen cabinets. But unlike in similar deals financed by the city’s Housing Development Corporation, Mr. Florey did not seek any construction permits, which city regulations require for everything except minor alterations and ordinary repairs. A spokeswoman said no city agency was responsible for verifying construction expenditures on the refinanced projects.