Co-op City erupts in chaos amid feud between Marion Scott, board, HCR

Cleve taylor

Cleve Taylor, president of Riverbay’s Board of Directors, ousted Marion Scott Inc. and was immediately warned by HCR that his actions were illegal.

By Carmen Glover

Co-op City’s management is in a state of limbo after dueling actions by its board of directors and the NYS Homes & Community Renewal (HCR).

In a move that has taken longer than shareholders expected, the newly elected board of directors of Riverbay Corporation.Cleve Taylor suspended its real estate agency, Marion Scott, Inc. and had law enforcement officials escort some of its employees off the premises, amid pending lawsuits and a swirl of  new accusations of financial improprieties and mismanagement. The office of New York State Inspector General previously cited the corporation for financial improprieties, resulting in prosecution, trial and jail term for former board president Iris Baez.

During an emotionally charged emergency board meeting held in Bartow Center on Wednesday, November 19, Cleve Taylor, board president, led a vote of 12-2 to oust the management company that has been plagued by accusations of theft of services, financial improprieties, cronyism and disregard for state regulations.  In the days leading up to the action by the Board, Taylor sent a letter to HCR Assistant Commissioner Richmond McCurnin, requesting an investigation into Marion Scott Inc. In his letter Taylor wrote that:

“Marion Scott Inc. did not have a fidelity bond in place as required by HCR regulations. In addition, MSI routinely negotiated and contracted for more than $8 million /year in contracts without approval of the Riverbay Board and HCR.”

coop city

Co-op City is the largest residential housing development in New York state, boasting 35 buildings and housing thousands of residents.

Finance Director Peter Mereola and former General Manager Noel Ellison were named co-general managers and have been charged to manage the cooperation on an interim basis while proposals for the management contract are evaluated by the board. However, Taylor’s action was swiftly met with biting rebuke by McCurnin, who wrote to Taylor stating:

“My immediate concern is your unilateral decision to indefinitely ‘suspend’ all of the management agent’s employees at Riverbay, pending a review by the Board and HCR. This action is in violation of HCR regulations and Riverbay’s obligations under their WellsFargo/HUD loan documents.”

Marion Scott Inc. is currently facing a class action lawsuit resulting from financial improprieties, including contracted workers performing duties for which they were not paid since their checks bounced when presented at various banks. Taylor’s decision to act backfired spectacularly and he now faces skepticism from members of the community and the board, whose pleas to remove MSI shortly after the new board took office in June, fell on deaf ears. Week after week, the community’s local paper, The Co-Op City Times has published various reports that point to collusion between HCR and MSI, including HCR awarding of the contract to MSI in 1999 without a formal bidding process.

First vice president of the board, Daryl Johnson, has been vocal on the issue for months, stating that “according to the HCR regulations, we can self-manage and get rid of Marion Scott in 30 days.” Johnson has made reference to HCR’s own regulations to that effect and published the specific regulations in his weekly column. However, Taylor chose a different path. In the meantime, the board named an ad hoc committee to review proposals from management companies and examine backgrounds of applicants for general manager.

Several management companies have toured Co-op City and submitted bids for the contract, including Marion Scott Inc. MSI’s bid  has the community in an uproar that due to its inside knowledge of Riverbay’s operations, the very company that has caused the development public scrutiny and lawsuits, could win the bid. The idea of MSI continuing to  run the development, despite electing a new board filled with members who won office by promising to get rid of the problem-plagued management company, is causing anxiety among the residents. During the recent emergency board meeting, residents expressed their anger and disappointment in the board’s delayed action. Residents stated that they wanted “investigations and arrests,” to deal with the “theft” that has run the development into the ground. Read more as we continue to follow this story.-