Selling Seniors - Soaking Taxpayers

"The man who knows the price of everything and the value of nothing" - Oscar Wilde 

Forty years ago the Town of Clarkstown received a gift - the Middlewood Senior Housing Project on Middletown Road in Nanuet. Since then it has been run by various management agents and the residents have been very happy.

As of the end of this year the outstanding mortgage will have been paid off which means that under a new HUD (the United States Department of Housing and Urban Development) contract the complex will provide a cash flow of more than $1 million each year that can be used to further support housing needs in Clarkstown.

The contract with HUD expired in May last year and Supervisor Gromack obtained a one year extension. The Town can negotiate a new contract with HUD at current market rental levels. 

Currently comparable contracts in Clarkstown are providing rents in the range of $1,250 - $1,600 per month which would result in a cash stream of $1 – 1.5 million per year to whomever owns the property.

Renters in the complex have their rents fixed and linked to a fixed fraction of their income. Thus if a tenant is paying $250 per month and the true market rental cost is $500, the difference is made up by the government.  When rents are pushed upwards to reflect market conditions, say to $1,000 per month, the tenant’s share of the rent remains unchanged and the difference in the newly established rent is again picked up by the government.

Why is the Town of Clarkstown rushing to sell this valuable asset?  

What rational and fiscally responsible organization would sell an asset for approximately $10 million dollars when the same asset will provide a government guaranteed payment of $1.5 million for the next 50-100 years? No wonder buyers have lined up outside Town Hall with their check books in hand!

During the last several Town Board meetings despite repeated assurances to the public that the “town is only exploring options and no decision has been made to sell Middlewood”, it was revealed that in July 2013 Town Officials were assuring the Wall Street Bond Rating Agencies that Middlewood would indeed be sold and the money added to the overspent and under-funded reserve fund. Similar statements were made in March 2014 and it was stated that a firm had been identified to handle the sale for a fee of about $400,000.

These numerous representations were made to the Rating Companies so that they would not downgrade Supervisor Gromack’s cherished and much-touted Triple AAA Bond Rating. For example, Standard & Poor’s has indicated that it may downgrade the Town of Clarkstown due to its recurring structurally deficient budgets and its depleted cash levels in its Reserve Fund. Despite raising taxes by 6.2% a year ago the Town’s income does not cover its expenses and many bills are not reflected in the budget. You may not know this fact but the Town has been borrowing from the State of NY to make pension payments for the past decade instead of including the full amount due each year in its budget.

It appears that the three Democratic members of the Town Board plan to sell the Middlewood Senior Housing Complex and use the cash to bolster the Town's badly depleted Reserve Fund in an attempt to hold off for another couple of years a downgrade of the Town's bond rating.  Supervisor Gromack, Councilwoman Hausner and Councilwoman Lasker seem prepared to disguise the financial sink-hole into which the Town is slowly descending because of deficit spending and bloated budgets.

To date Supervisor Gromack has considered only a sale of the complex and he has not explored any other alternative such as the Town keeping the property that has a true Net Present Value in the $15 - $25 million range and using the $1 million plus income stream from the property to the benefit of the Town’s seniors and the Town’s taxpayers. 

Further, in his rush to sell, the Supervisor has not provided any details on how the existing tenants will be protected. He has issued general comments in effect saying that nothing will change for the tenants and many things will get better – the seniors will have “pizza nights” and their “blood pressure checked”.  

Yet in a handout that Supervisor Gromack provided regarding a recent sale in New Jersey of a HUD senior citizen complex, one finds that the Town involved in the sale had to agree to subsidize rents for some current tenants or they would have been forced to leave their homes by the new ‘for-profit’ owners.

Because of the efforts of several concerned citizens, the efforts of the seniors of the Middlewood complex, and with the support of Councilmen Hoehmann and Borelli who have expressed outrage at the financial madness of this proposed sale, Supervisor Gromack with Councilwomen Hausner and Lasker have been forced to hold a public meeting on the evening of May 20th in the Town Hall on Maple avenue at 7:30 pm.

As taxpayers you should attend this meeting and ask the Supervisor why he told S&P that he has “shown leadership by a willingness to raise taxes” and he will therefore raise your property taxes by 5.7% in 2015.  You may also ask him why as the owners of the Middlewood property the Supervisor is cynically asking your permission to sell this asset at below market value to satisfy the Standard & Poor’s rating agency that he place additional funds immediately in the Town’s reserve account.

In ‘Lady Windermere's Fan’ by Oscar Wilde the question was asked: What is a cynic? The answer: A man who knows the price of everything and the value of nothing.

It is time for the Supervisor of the Town of Clarkstown to come clean on this cynical sale of Middlewood, come clean to the taxpayers about his continued deficit spending, and come clean to the taxpayers about his planned property tax increases.

This article was authored by Jim Flynn, a Nanuet resident and Michael N. Hull who resides in Bardonia. Hull contributes to the Facebook page Clarkstown: What They Don't Want You To Know and is participating in the start up of a new Rockland County internet newspaper Rockland Voice.