FEB
20
2007

The Salvation Army – Real Estate Gestapo


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The Salvation Army recently served Thirty Day Notice of Termination letters to over 200 young and elderly women of the Parkside Evangeline and Ten Eyck-Troughton Residences in Manhattan. This charitable act of kindness is exemplary of the Army’s slogan, “Doing the Most Good.” Or rather, “Doing the Most Good in Manhattan Real Estate”…



by Michelle Renee Coudon

On a cold, blustery, Mid-January day, The Salvation Army, the second largest and Christian non-profit organization in the U.S., served Thirty Day Notice of Termination letters to over 200 young and elderly women of the Parkside Evangeline and Ten Eyck-Troughton Residences in Manhattan. This charitable act of kindness is exemplary of the Army’s slogan, “Doing the Most Good.” Or rather, “Doing the Most Good in Manhattan Real Estate.”

Picture this scenario: A graduate student, aspiring actress or young professional comes home to her tiny, walk-in closet sized abode in the safeness of Gramercy Park after a long, stress-filled day of work only to be greeted by representatives of Borah, Altschuler, Schwartz & Nahins with a camera crew in tow issuing and an eviction notice. And not because little Suzy Jane didn’t pay her rent. Rather, the Salvation Army wants to cash in over $100 million dollars to sell the property to luxury condominium developers.
And so, this scenario has become a harsh reality for a couple hundred women of modest means who now have to scramble to find affordable housing elsewhere in a brutal, 1% vacant New York rental market in just thirty days.

The Parkside Evangeline (now tenderly known as “The Darkside”) and the Ten Eyck-Troughton Residences have long been fixtures in New York City as safe, affordable housing for young women pursuing their academic or early professional careers. Allegedly, the Parkside even played muse for the early ’80s sitcom, “Bosom Buddies”.

Former tenant advocate and New York State Senator, Liz Krueger has publicly voiced her opinion of the Salvation Army’s actions of acting as “a slum lord” and attempting to cash in on hot Manhattan real estate that has decades long been tax-exempt. To top that, the charity is taking advantage of New York City rent control and rent-stabilization laws and the Emergency Protection Act for a “class B mutiple dwelling”, kicking residents out in the cold before the buildings have even been sold.

Sources do vary on how the Salvation Army acquired the properties. Some report that the pair of buildings were donated to the charity for the sole purpose of providing affordable housing to young women. Others report that the S.A. acquired the Parkside property for $1.1 million ($600,000 of which was spent on repairs) in the early 1960s. If that source is accurate, even adjusting for inflation the S.A. is expected to make nearly a quarter billion killing – tax free. I guess the thought of using even a drop of that money to help relocate these unfortunate displaced women didn’t come to mind.

The rooms at the S.A. owned properties didn’t come cheap either. Residents were shelling out between $1,000 – $1,300 per month for approximately 100 square feet on space, with weekly late fees (for being greater than 2 days late) that would make exorbitant credit card interest charges look like a drop in the bucket. In spite of the S.A.’s claims that they’ve been offering very affordable housing for decades, the current rental rates are not considerably lower than rental rates elsewhere. Playing the role of landlord must have been quite a profitable operation for the Salvation Army on a non-profit basis.

In the weeks leading up to the official “notice” residents of the Parkside building have been harassed and bullied by the buildings’ administration. The two elevator building has virtually become a seventeen-story walk-up with constant construction until late evening hours, boarded up elevator shafts and X’s marking rooms that have now been vacated. Not a cozy way to live for at least a grand a month.

Despite the Salvation Army’s legal request of an exodus from residents the S.A. has offered little or no reasonable help and absolutely no financial retribution to residents for moving costs or rental expenses elsewhere. On top of that, the building is holding residents’ security deposits for thirty-days after they’ve left the premises. It’s not like they’re looking for room damages when the buildings will be gutted or demolished. A young Californian native recently moved cross country to lay her roots down in NYC. “I was thrilled when my application was approved and I got a call that a room was available. A week after I checked in they told me I would have to find an apartment somewhere else. You’d think they’d mention that before I moved 3,000 miles across the country.”

Tenants of both buildings are fighting back the looming February 28th deadline with the aid of Manhattan Legal Services.

In an official statement to the press, the Salvation Army released the following: “The Salvation Army will be selling these buildings and will re-deploy the assets as it embarks on new ventures of opening a Kroc Center, a facility capable of providing an extraordinary range of programs and services to a community in need of recreational resources.”

Apparently the $1.5 billion dollar grant the S.A. received on behalf of the late Joan Kroc, (the widow of Ray Kroc, the McDonald’s mogul) hasn’t been enough to fund the S.A.’s new business endeavour. $87 million alone went into the enormous 12.4 acre San Diego members’ community center fully equipped with an ice arena, aquatic center, gymnasium, skatepark, rock wall, recreation fields, performance center and education center. A day’s visit at the Joan and Ray Kroc San Diego center will cost a single adult $25 bucks. The S.A. has plans to open 25 Kroc centers across the country. Kicking out paying residents that no longer fit into their business plan will help fuel their project.

In the end, non-profit or not, it seems like all organizations are in the business of making money. And if they can add additional donated tax-free dollars to the mix who’s to blame them for taking advantage of the system except for the unfortunate, unsuspecting donors and benefactors thinking they were doing some good. Perhaps they should have been thinking of investing in the Salvation Army instead of donating money for its own “doing the most good”. Salvation Army – You’re a Load of Kroc!

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13 Comments »

  • bw:

    if you kjnew how corupt they really are

  • I found your post on my (almost) daily obsession with blog searching. Thanks for the informative blog post as I can certainly appreciate all of the hard work that goes into maintaining a site like this! Thanks again.

  • justcauz:

    Many “non-profits” really do not make a profit, they pay the money to them selves.

    I live in a city of 18k people the United way has asked for an increase of 100K in the last 10 years. that is just in this small city alone. the largest city in more… the state (SD) has roughly 150K and the United Way asks for roughly the same 250k from them. and they don’t often hit the mark. I see no improvement in services from the UW at all, in fact local groups have had grants from The UW cut or reduced.

  • may:

    I have a few friends who lived (notice I said LIVED) in the gramercy building and I visited them there too before they moved out. Actually, given the tactics I saw the S.A. use to get people out I think the Salvation Army got off easy in this vid – I don’t think she’s being nearly tough enough on the S.A (and neither is the media for that matter). Just talk to some residents who attended the “tenants’ rights meeting” and how the S.A. reacted to those they found out attended. While the S.A. probably did make good tax-free money off these buildings, I can only imagine how much $$$ they plan to make off these Kroc Centers. And of course, who needs affordable housing anyway… What people with lower incomes (especially in San Diego) really want is a sports facility to work out their muscles! What’s really interesting to note, though, is that if Joan Kroc left over 1.5 billion dollars for the S.A., wouldn’t the sale of these buildings mount to little more than a year or two of interest on the 1.5 bil anyway?

  • Here’s a more recent update/press release on the S.A. housing situation:

    For Immediate Release: Friday, February 16th, 2007
    Contact: Travis Proulx (w) 212.490.9535 (f) 212.490.2151 (c) 917.363.5449

    SALVATION ARMY TENANTS FILE SUIT TO SAVE AFFORDABLE HOUSING FOR WOMEN

    Tenants, Elected Officials, Lawyers and Affordable Housing Advocates Condemn the Army’s Eviction Efforts

    New York—Approximately 30 tenants at two SRO buildings (the Parkside Evangeline and Ten-Eyck Troughton) which are owned and operated by the Salvation Army (SA) filed suit today to stop the SA’s attempts to evict their residents. If the buildings are allowed to close, approximately 600 units of affordable housing for women in Manhattan will be lost. The lawsuit also challenges the legality of the SA’s ability to sell both Midtown East buildings for a profit (media reports indicate they may fetch in excess of $100 million) when the SA benefits from rent law exemption due to their not for profit charitable status.

    “We got a knock on the door, a video camera in our face, and an eviction notice stuck in our hand,” explained Princess Usounga of the Parkside Evangeline. “They moved some of the women, but have done nothing to help those of us here today to find alternative housing arrangements—posting craigslist ads on a billboard in the lobby doesn’t cut it. We wouldn’t be at this point today if they had just shown their heart, instead of their greed.”

    Michelle Leone of the Ten Eyck agreed. “I have lived here for 8 years and never thought in my wildest dreams that it would be the Salvation Army who put me and my neighbors into this type of situation. We first tried to work with them; then with our elected officials, who in turn tried to work with them. They were completely unresponsive. They gave us no choice but to take this situation public, and as soon as we did the Salvation Army of Greater New York posted a statement on their website implying we are greedy media-mongers. I just want to know I have a safe, affordable, and stable home.”

    “Every affordable unit we lose in Manhattan is a step towards losing the character and diversity that makes this borough so unique,” said Manhattan Borough President Scott Stringer. “The Salvation Army helps thousands of people every day, and today we’re asking them to help some of our most vulnerable. We cannot allow this profit-driven sale to move forward.”

    State Senator Liz Krueger challenged that SA’s justification for why these two buildings are being closed—to help fund other projects. “The Salvation Army has a mission, that they march out every time they want donations. That mission includes helping those in need, including offering housing and helping prevent evictions. It is more than a little hypocritical that the Salvation Army has not taken the appropriate steps to make sure their very own residents don’t face homelessness. The Salvation Army is the 2nd largest charity in the country. That they are claiming Ms. Joan Kroc’s $1.5 billion donation as an excuse to close down 600 units of affordable housing for women is simply mind-boggling.”

    “We teach our children it’s a sin to throw away food. In New York City it’s a sin to throw people out of their homes and turn affordable into high priced housing,” declared Assemblyman Dick Gottfried. “Yes, the Salvation Army can make some money from this shameful act. There are lots of shameful ways to make money. We have a right to expect more from the Salvation Army.”

    “If the Salvation Army follows through with its decision to close these residences, it will represent a significant loss of affordable housing for our community and a tremendous hardship for the residents,” Assemblyman Brian Kavanagh said. “We are working hard to make sure that the Salvation Army meets its obligation to provide adequate relocation assistance including alternative, suitable, long-term, affordable housing and other services that will ease the burden for every single resident.”

    Councilwoman Rosie Mendez remembered the panic of the women who contacted her office when the Salvation Army verbally alluded to selling the residences. “As soon as the elected officials heard what was happening, we moved to act as mediators with the Salvation Army, hoping to find a satisfactory conclusion for all parties involved—the Salvation Army has not been willing to work with us. We sent official letters only to have our meeting attempts denied. This process has revealed a lot about the Salvation Army.”

    “The Salvation Army should not use its legal status as a charity to turn its back on vulnerable tenants,� said Councilman Dan Garodnick. “We are losing 600 affordable units here, tenants are being displaced, and the Salvation Army should act according to its mission—and act responsibly towards the residents of these buildings.�

    More than half of the tenants qualify as low-income, which has allowed legal services for all 30 tenants filing suit to be handled by Legal Services for New York City (LSNYC) with pro bono counsel provided by the firm of Phillips Nizer LLP. The lawsuit first moves to provide a stay for remaining tenants while the legal case proceeds, and then goes on to challenge the validity of the Salvation Army selling these two buildings for profit while benefiting from non profit status. “There are many legal questions that remain up in the air,” said Marc Landis of Phillips Nizer and Chaumtoli Huq of Manhattan Legal Services, a program of LSNYC. “All charities, nonprofits and educational institutions are exempt from the rent regulation laws as long as the building is being used for charitable purposes. The Salvation Army wants these buildings vacant in order to sell them for enormous profits. This is the only reason they are evicting all of their tenants. The purpose of the rent laws is to preserve affordable housing and the exemption for charitable use was not intended to allow the Salvation Army to achieve the opposite.”

    “It is almost hard to believe that while Manhattan is being gobbled up by greedy developers, we are spending time and resources fighting the greed of the Salvation Army,” affordable housing advocate Jenny Laurie of the MET Council declared. “Millions of people drop quarters into little red buckets every holiday season believing their money will be used for good. It is going to disappoint a whole lot of people to know that a charity they trust has placed profit above doing what’s right.”

  • kszpirak:

    So what happens when the non profit orgnaization makes profit? I think these type of non-profit operations should be overlooked by some kind of federal government or state organization.

  • charbax:

    Don’t you think the Salvation Army actually has done and is doing a lot of good for the poor people around the world?

    If they can make another 100 million on a building, if it is for doing good for the loads of poor people in our societies, then I don’t see why not.

    The Salvation Army is a non-profit organization isn’t it, this means no one is profiting, in theory.

    • Charbax, thank you for your perspective and THANK YOU all for your comments! However, I have to wonder if you watched the entirety of the video and all of its points.

      Yes, in theory a non-profit is NOT supposed to be generating a profit. Like kingers36 pointed out that United Way is bending the rules. Allegedly, the S.A. purchased a property in the $1 mil range in Santa Monica, CA for one of their Majors to use as their private residence. A rather charitable contribution of the S.A. right back into its own pockets. Wouldn’t you say?

      The S.A. of Greater New York claims to be selling both of these Manhattan properties for a charitable purpose. Is it charitable to displace paying tenants from their homes to help the other less fortunate? How would you feel if you were being kicked out of your home with 30 days notice because your landlord wants to flip their property? Many NY/NYC elected officials feel very differently as do I. This is the SAME CHRISTIAN CHARITY that requests donations at Christmas time to help people from being evicted from their homes – the disgusting irony!!! Fact is the S.A. has been and is exploiting tax laws and benefits as well as NYC housing laws for their own good.

      I could go on and on – I suggest you do your own due diligence on the subject. People who pay their rent should not be kicked to the curb with little notice and no help. And people have a right to know where, what and how their donation money is being used for the supposed greater good.

  • kingers36:

    verrry good piece didn’t even hear anything about this on the news around here i live in the buffalo ny area. it should have been national news i think. seems to be the rule with big “non profit” charities there execs are making tons of $ to throw more… crumbs at people in need.. the local president of our united way was making in excess of 900k thats a bit much i think that’s when i stopped my payroll deduction…. where ever there is big money someone is getting a piece of it thats for sure..

  • I didn’t expand on this in the video blog so I thought I would sound off about it here.

    In the S.A.’s official statement to the press regarding the need for Kroc centers in locations in need of recreational centers – is beautiful, sunny, San Diego in dire need of a rec center? You’d think in the urban neighborhoods of Detroit or Baltimore would be more apropos for that statement.

    Really they chose an area that Joan Kroc wanted – not where it would be “doing the most good”.

  • Mike:

    Very interesting feature about the Salvation Army. Yet Another chairity to lose faith in along with United Way and the Red Cross. Thanks for bringing up this issue.

    ps – This is my first time on your site. My only critisism is you really need to do something about the audio. Sounds like recording was made in a phone booth. Perhaps a clip on mic would help. It would help with the ambient room sound. Just an idea.

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