Asked by: ~ One anonymous shareholder
Answered by: ~ Several anonymous Shareholders

“Simply put, the Board blames government; yet, the Board itself overspent and put us in unecessary $60MM dollar debt.  Some of the projects could have waited.”

Another said,  “[For instance,] could the Plaza and Bridge over Clark Street have simply been closed off temporarily rather than completely renovated, and how much is that costing us?”  

And yet another, “This cost for gentrification doesn't work for those that are retired and are on a fixed income.   I may need to move out in my retirement, but with Article 11 It is going to be difficult having to find a qualified buyer and, of course, a place to live.  I don't know what I am going to do.”

^{Devil‘s Advocate:    The question remains, with or without Article 11, is this Board going to then continue to “overspend” in the future, perpetually raising our maintenace, either way? There were residents here struggling before the expenses and 44% maintenance increases.  This Devil's Advocate agrees with Ira Simon, running for the Board this year, that there should be term limits in this Board, precisely for the above reasons!  If this level of debt is going to hurt us one way or another, perhpas going back to full Privatization might be a future option, if we don't lock ourselves in a no-return Article 11?!} 

Yes! Please! Some say the Board is "too much work.    It doesn't have to be.   The healthiest and, by design, temporary "two-year terms" are required to maintain the healthy democratic foundation and "need" of the Mitchell-Lama mechanism, or any Tenant Association or Coop.  

The following videos explain, “The Board DOES NOT [should not] concern itself in the details of day-to-day management!” By doing so, a Board member is not only breaking the rules and creating a lot of work for themselves (making Board Membership unpalatable) but inadvertently slipping into an "Identity of (personal) Interest."   The official video below states, "Identity of Interest arises when a Board member takes some action as a Board Member, which benefits his or her own financial or other interests."   In addition to the "serious consequences," the day-to-day Board involvement that we see at Cadman Towers results from long-standing incumbencies as Board Members serving term after term, after term, over and over again, for ten years and more.   By simple human nature, it has to become personal.   That is why YOU, all "Shareholders," should be involved in keeping the Board fresh, democratic, lucid, and open-minded to all shareholders —either on the Board or supporting one of the committees for Board Oversight.

An arguable example of “Identity of Interest” with misplaced involvement in “day-to-day” decision-making, from many examples, can be seen in the minutes of the November 2022 post-COVID Board Meeting Minutes.  One long-standing Board Member proposed that instead of relaxing the “State of Emergency” already lifted by Federal, State, and City Governments, Cadman’s mandatory mask-wearing should instead continue and be compared with the same prohibition as “No Smoking” in the building.  This was actually uttered!

These type of questionable rationale should not be deciding our future, our lives, affordability, etc., to appease personal egos and selective ideologies.   We are not a cult and this is not a Cadman Towers official philosophy.   We need to freshen the Board ASAP!  Some have been there for ten or fifteen years, which is NOT healthy!  Think about that, PLEASE!  





^{Devil’s Advocate:  Please join the Board for one term or one of the several committees to enforce Board Oversight and fresh ideas.   We have started this "Cadman Transparency Group" for anyone who wishes to participate; there is also the Cadman Towers Association (CTA), led by Elaine Sohn, and the Committee to Preserve Cadman Towers (CPCT), led by Sharon Torres.   Please get involved for much needed oversight—in one manner or another to voice your opinions and interests.}  


This is YOUR home, OUR home! If not involved, at least we need to stop voting blindly for the same Board Members over and over again.   They have done their jobs; it's time for them to step aside and let new Shareholders run the Board.

Please let us know if anyone tries to dissuade you from running.

A.

A.
YES, fully anonymous!  Send your FAQ question to Cadman.Transparency@gmail.com, with or without a verifiable answer; it will be posted and introduced into the conversation, requesting a verifiable answer.  Thank you in advance.

A.

Source: ~ The Final Proxy Statement
Asked by: ~ An anonymous Shareholder

^{Devil‘s Advocate:  At a glance, the math does not look good from the level of complication.  The number of hurdles to jump over will likely require hiring outside resources, such as attorneys or realtors, at additional costs, potentially being held hostage financially to pay maintenance or stay put for many months or more. E.g., How many “insiders” will be available and willing to take my apartment (within a 30 day window), or how many outsiders from Housing Connect, earning between $80k and $160k, will be available, qualified, and willing to buy my apartment without renovations, and how long will that take!?!  And will I end up with any of my original Equity?  Without a previous example of a “Coop-Mitchell-Lama conversion to HDFC,” and documented history, this speculative “Who's going to be first” scenario sounds very scary!  This ‘math’ does not work for this Devil's Advocate.}

Here is what the final Proxy Statement lays out:

“
15. Upon Reconstitution, there will no longer be an external waiting list used to fill vacancies, which has been the sole mechanism for filling vacancies at the time of resale, as long as a prospective shareholder on the waiting list meets the financial and income criteria. Instead, the HDFC Cooperative will have an Insider Waiting List  [BUT THIS CLEVERLY LEAVES OUT THAT WE ALREADY HAVE AN “INSIDER LIST!” ...NOT “the sole mechanism” stated above, as if this were a newly added benefit!] to accommodate upsizing and downsizing for existing Shareholders (and to permit transfers between existing Shareholders (“Inside Transfers”), and will otherwise fill vacancies that are not filled from the Insider Waiting List through a lottery of applicants conducted by HPD using NYC Housing Connect, in 4814-6211-1183.437 accordance with HPD’s Marketing Handbook, which is available on HPD’s website at https://www1.nyc.gov/assets/hpd/downloads/pdfs/services/marketing-handbook-8-21.pdf.    [FOR YOUR ATTORNEY AND REALTORS TO READ AND DECIPHER.]  When a Shareholder seeks to sell the Shares to their Apartment, the Shareholder will notify the Board, and the prospective purchasers will first be chosen from the Insider Waiting List from the pool of existing Shareholders in the order in which they are listed. Each prospective purchaser from the Insider Waiting List will have 30 days to accept or deny the purchase of the Apartment. Once the Insider Waiting List has been exhausted, the prospective purchasers will be chosen from the NYC Housing Connect. While the HDFC Cooperative will administer the Insider Waiting List and will otherwise rely on the use of NYC Housing Connect to fill vacancies, a prospective Qualified Purchaser’s income and family composition must be reviewed and approved by HPD prior to the sale of the Shares.   [RIGHT NOW, YOU SIMPLY LEAVE, AND YOU ARE NOT HELD HOSTAGE TO THE FALLOUT OF PERSONAL FINANCIAL RAMIFICATIONS!]  Additionally, the Purchase Prices for Shares will change, and HDFC Shareholders will no longer receive a return of their Equity, but will instead be able to sell their Shares to a Qualified Purchaser. Examples of the Purchase Prices for Shares in the HDFC Cooperative are set forth on Exhibit 9 for each Apartment. Schedule A also shows the proposed amount of Flip Tax that would be paid on first sale of Shares in the HDFC Cooperative. ML Shareholders are strongly advised to closely review Exhibit 9 Schedule A and the estimated Equity through December 2022 to see the difference between Purchase Price and Equity for the sale during the First Year of Operations as an HDFC Cooperative. The HDFC will have to submit income and family composition documentation in a form acceptable to HPD as part of its application for approval. Shareholders on the Insider Waiting List or Inside Transfers do not need to meet (or re-certify) the aforementioned income requirements.  [AGAIN, WE ALREADY HAVE THIS! ]    The Board shall not have the right to reject or deny any Qualified Purchaser. The HDFC shall not have a right of first refusal (otherwise known as the right to accept or reject an offer on an Apartment that is for sale or lease before it is placed on the Insider Waiting List or otherwise advertised on NYC Housing Connect). See Article XV of the HDFC Bylaws and the “Assignment of Lease and Transfer of Shares Through Sale or Otherwise” Section of the Proprietary Lease for more information.

”
 [GOOD LUCK, AND VOTE RESPONSIBLY!]  

A.
NO, not in the absolute eternal way!   Needs to be clarified and investigated.  Everything and anything can be argued and renegotiated, even if it means before a Court!  There is “some” undisclosed agreement allegedly from 2014 that reportedly agreed not to attempt any kind of Privatization. 

However, the latest hearsay information we received is that a $5MM City-Loan included terms that for 35 years, we would stay locked into Mitchell-Lama.  Yet, because, as stated, everything can be renegotiated and argued, an exception was argued and granted.  The 35-year requirement to stay in Mitchell-Lama was renegotiated by Cadman, with the City, to allow the HDFC Article 11 as an exception.  The question this begs is, “Can we then, arguably, also renegotiate backward once the $5MM loan is paid back to the City, in the event Article 11 does not get the vote?”  Remember, anything can be argued through the judicial system, even if it sounds crazy or completely “Off the Table.” 

We need to see that official agreement—and have it vetted for legal accuracy by impartial attorneys.  The last we’ve read, and needs to be verified, of course, is that there is a 5 year wait to try again if Article 11 fails the vote.  It's been suggested that Full-Privatization will not be allowed if/after Semi-privatization Article 11 succeeds.  Reportedly, only one kind of Privatization may be allowed.  

We brought this up because of recent input and concerns that with or without either Mitchell-Lama Article 2 or HDFC Article 11, we may not be able to pay the $60MM debt incurred in the last few years—at all, without skyrocketing all our maintenance!  That would leave the “arguing” for a Court to be allowed Full Privatization as the only way out for all these families.  Again, of course, that argument can only happen if we remain Mitchell-Lama—reportedly.  And somebody asked, “How would that help us pay off the debt?”  And someone else answered, “Apartments could be sold at market prices.” (This Devil's advocate is neither a realtor nor an attorney, so I cannot add to these opinions.)

We do, however, live in a cuntry of laws and a Judicial System where anything can be argued before a Court when circumstances become dire—do we not?

A.
The “Yellow Memo” was researched and written by members of the Committee to Preserve Cadman Towers (CPCT), which includes 6+ dozen members ‘against’ leaving Mitchell-Lama, offering opposing “affordability” data and POVs to the ongoing proposal underway for converting from Michell-Lama Article 2 to HDFC Article 11 Semi-Privatization. We recommend you first read the “Yellow Memo” and then see for yourself the responses from the Board and related articles: (“Bargains with a But,” New York Times, and “…a Rich Kid's Loophole,” Bloomberg.”)

A.
(Reportedly) ↦ “From the period of 2004 to 2009, the Cadman Board spent in excess of $315,000 on efforts to privatize Cadman.  In 2012, the Board authorized a vote for an additional $100,000 to be spent; the vote was defeated in June 2012.  In May 2018, Cadman Towers Shareholders voted to spend $75,000 to develop a proxy statement for Mitchell-Lama to HDFC Article 11 conversion.  The Board’s attorney for the proxy statement has been (reportedly) working pro-bono as most of the $75,000 has been spent.”

Reportedly, the inflation purchasing power of the Dollar over the last decade is above 35%, rendering the funds spent a loss today of over half a million.

    Source: ~ an anonymous Educated Source on the topic

A.
Thus far, all Board Meeting Minutes are distributed via email link 25-31 days after each Board Meeting, 1 – 3 days before the next Board Meeting.  We have indicated a request for speedier processing to be ready and formulate questions for the next Board Meeting in a letter to the Attorney General.

An example is this January Board Meeting minutes were sent out AFTER the February Board Meeting!

Therefore, I started recording the meetings for my partner and I to be able to review and archive until the minutes are distributed.  If anyone wishes to learn how to record the meetings for yourselves, simply use QuickTime screen recording (https://youtu.be/LSmM5FXzVBg), or I will gladly hold a personal free tutorial over a zoom lesson. Email me at Cadman.Transparency@gmail.com 

A. You can find the latest updates on the following three resources.  For Mitchell-Lama and for HDFC, respectively, (click the links).  Also: https://www.cu4ml.org CU4ML – Cooperators United for Mitchell-Lama are resident- cooperators of Mitchell-Lama/limited-equity cooperatives “who are committed to preserving quality not-for-profit housing cooperatives, in perpetuity, both for themselves and for future generations of New Yorkers.”

A. Join the non-partisan Cadman Transparency Group by filling out the first fully anonymous Survey and joining our Facebook Private Group: “Cadman Towers Article 11 Discussion.”

A. Good news, kind of!  There will, now, be 21 “workshops,” including the Annual Meeting for Shareholders to discuss these questions and concerns.  The new issue now is “Why only one meeting per shareholer, and at 6 pm,” when many who work are still on a commute, and there are NO weekends at all, to accommodate everyone?  (And like it or not, there are some jobs that do not support just leaving early, for monthly Residential Board meetings and now workshops, without good cause—for those out of the loop!) 

It's been suggested, at least one Town Hall type meeting, would take the place of all these small limited audience meetings where everyone will not be able to hear all the points raised by everyone else.   There are many things to discuss openly, for all ears, not one small 1 - 2 hour “workshop” meeting, as if this was already a done deal—it's not!  Not yet.  Wouldn't you agree?

For example, note the Proxy Statement, as required by the Attorney General, points out 25 “Special Risks, where nine (9) are major “SPECIAL RISKS.”  The #1 Risk reads as follows: “SR 1: Highlight as a special risk that the proposed conversion of Mitchell-Lama ‘cooperative’ from an Article 2 to an Article 11 HDFC is THE FIRST OF ITS KIND. ”  This tops the other RISKS, 3, 6, 8, and 9, and others, which also stand out as MAJOR concerns, to the Attorney General.  What do each of all those 25 “RISKS” really mean for our future if we vote for this to go through?  Pay special attention to each and everyone of these 25 RISKS, as one alone could decide your affordability and future.  Note that, as it was pointed out to us by an anonymous Shareholder, well educated on this topic, that the Special Risks were wordsmithed by the attorney very cleverly to actually sound palatable or of having non-issue.  THERE ARE ISSUES!   Consider each of those carefully and ask questions to your satisfaction, beyond the chosen rhetoric, before voting at all; hear all sides. 

A. Below are the Email address and USPS street addresses for the Attorney General:

Please request a “FULL Regulatory Agreement” (If nothing else)†.

As per a recent reply I received from the Assistant Attorney General, Review Section Chief, Mr. Jang Lee, please cc. Mr. Peter Donahue at HPD.

Email: Jang.Lee@ag.ny.gov
c.c. donohuep@hpd.nyc.gov
Office of the Attorney General
Real Estate Finance Bureau
28 Liberty Street
New York, NY 10005
Attention: Mr. Jang Lee, Assistant Attorney General

<sup>† There is a rumor going around that a “Full Regulatory Agreement” will be added to the “Final Approved Proxy Statement.”  Even if that were accurate, neither the Attorney General nor the Shareholders (YOU) would be able to challenge any questionable provisions.  (It is “final,” after all!)  Not having the “Full Regulatory Agreement” up front is the most dangerous and “convenient” way for too many unfair practices to be approved.

Source: ~ an anonymous Educated Source on the topic.</sup>

A. Some folks and even the math are suggesting so.  “We give up so much to get back so much less than Full-Privatization,” an (anonymous) shareholder said.  We may need to do the full math, yet the question is undoubtedly begging for an aggregated answer, but according to the available FAQs, thus far, it appears so.  [waiting for details from sourced answers.]

^{Devil’s Advocate: According to the “Yellow Memo” (page 1, paragraph 4), the “UHAB loans established to deal with the HDFC mortgage problem,” limited to only 15-year-loans.  Is that for also Capital Repairs?}

DEBUNKED!

In fact, this is the exact same as the original Articles of Incorporation for our existing Mithcell-Lama Article 2. No issue here!

History:

A. YES! Part 1 – As per Paragraph 15 (original 185-page Proxy Statement before revisions) clearly says: “ Pursuant to the terms of the [flimsey] abreviated Regulatory Agreement Term Sheet: “
HPD may replace any or all members of the HDFC Board by appointing persons whom HPD, in its sole discretion, deems advisable, including officers or employees of HPD, as new directors to serve in the places of those removed.  Directors So appointed need NOT be HDFC Shareholders or meet other qualifications that may be prescribed by the HDFC Certificate of Incorporation.  ML Shareholders are strongly encouraged to review Paragraph [not indicated] of the Regulatory Agreement. ”


...And... Yes, confirmed; that was correct.

Final Proxy Statement Special Risk 17

17. Pursuant to the terms of the Regulatory Agreement, HPD may replace any or all members of the HDFC Board by appointing persons whom HPD, in its sole discretion, deems advisable, including officers or employees of HPD, as new directors to serve in the places of those removed. Directors so appointed need not be HDFC Shareholders or meet other qualifications that may be prescribed by the HDFC Certificate of Incorporation. ML Shareholders are strongly encouraged to review the Regulatory Agreement once it is provided to the ML Shareholders by HPD.”

A. One answer from an anonymous educated source is that 40 apartments would have to vacate yearly (leaving by choice, or “passing away,”) in order to maintain affordability.  This needs to be verified and acrutinized by everyone, for responsbile voting!  Don't you think?

^{Devil’s Advocate: This cannot possibly be correct; the math does not work.  Therefore, this question remains to be answered with sources from legally sourced accounting data.  Another huge Elephant in this room is, “why is the answer to this question not included in the Proxy Statement we are about to *sign* without being provided the detailed small text ‘Regulatory Agreement’?”  YES, we do not get to see the “Full Detailed Regulartory Agreement” until after we sign the 99 year contract by voting!  To whom does this make sense?? Would you sign a contract without being given the details until after you sign??}

A. YES.  That is a “market-rate” Coop practice, but the numbers do not work for our Mitchell-Lama Non-Profit model or the HDFC Article 11 model propoposed.  That simple math is NOT sufficient!   IT IS SADLY VERY CONFUSING! There are too many holes.  The simple math, recently contributed by a Shareholder   [click here for that simple math and the argument of contingencies],   makes sense,  UNTIL you add expenses, previous renovation costs, contingencies, inflation, the unforeseen, the challenges of “Flipping” to move out, finding a buyer, potentially Attorney fees—and especially how many yearly “Flips” this will require for sustainability.”  What does all this mean?  There are too many holes and more every time another answer comes in.

We are NOT A “market-rate Cooperative!”  Shouldn't it be the other way around?  Or that all sales, “first sales” and ”subsequent sales,” should pay an equal 25%/25% Flip-Tax share—which would be more revenue for the Corporation in the long run??  REMEMBER: With this new deal, someone earning $150k, who can afford to finance a $1MM+ 2-bedroom, will qualifiy here for a $250k 2-bedroom.  They win coming in!  We lose going out! 

This is precisely the problem with not having a Fully Detailed Regulatory Agreement to have had negotiated prior to the Final Proxy.  It's confusing and could be interpreted without all the detailed contingencies and small print!   The simple math alone is not sufficient.

THE SIMPLE MATH:

The Uncalculated Contingencies:

The Final Proxy Statement

XII. FLIP TAXES
(from PART 1 SPECIAL RISKS)
All sales, dispositions, assignments, or other change of ownership of the shares of the HDFC Cooperative will require the selling Shareholder to pay the HDFC Cooperative a transfer fee (a “Flip Tax”). For each Apartment, upon the first sale of shares relating to such Apartment after the Reconstitution as an HDFC Cooperative, the selling Shareholder will be required to pay a Flip Tax of 50% of the gross contract price of the applicable Apartment. Upon each subsequent sale of shares, the selling Shareholder will be required to pay a Flip Fee of 3% of the gross contract price. Notwithstanding the foregoing: (1) on a one-time basis only, the Flip Tax will not be payable with respect to a sale of shares by the Shareholder to an Immediate Family Member, provided that such Immediate Family Member (Shareholder’s spouse, legally recognized domestic partner, their respective children, stepchildren, parents, brothers, sisters, and grandchildren) (a) has resided in the Apartment as their principal residence for at least twenty-four (24) consecutive months immediately preceding the date of the proposed transfer and (b) has been declared on the then current and immediately prior income affidavit statement of the Corporation (a “Qualifying Immediate Family Member”); and (2) the Flip Tax shall not be payable with respect to a Shareholder or a Shareholder’s estate bequeathing its shares and appurtenant occupancy rights to the Corporation without any consideration. ”

YES, fully anonymous! Send your question to Cadman.Transparency@gmail.com and your question, with or without a verifiable answer, will be posted and introduced into the conversation, requesting a verifiable answer. Thank you in advance.

A.
Yes! Go to the first fully anonymous Survey (3 minutes, 7 questions). Use text fields for comments: https://www.surveymonkey.com/r/27993HK. However, if you prefer to share your identity with your question or suggestion without any moderation limits or censorship, join our Facebook Private Group: Facebook Private Group: “Cadman Towers Article 11 Discussion.”