Esplanade Gardens, long known as the “Jewel of Harlem,” has been entangled in a web of alleged corruption, mismanagement, and deteriorating living conditions for decades. The property’s troubles were exacerbated with the transition to external management in the early 2000s under Prestige Management Inc. Despite numerous efforts to seek external intervention, the issues plaguing Esplanade Gardens remain unresolved, leaving shareholders increasingly frustrated and the living conditions hazardous.
A Legacy of Neglect and Mismanagement
EG originally operated under a self-management model before shifting to Prestige Management in the early 2000s. Over the previous 50 years, the community had underinvested in necessary maintenance and system upgrades, which resulted in outdated infrastructure and significant disrepair. Unfortunately, Prestige Management amplified these longstanding issues through consistent mismanagement, further accelerating the complex’s decline and increasing frustration among shareholders.
Inadequate Oversight and Unheeded Appeals
Shareholders have persistently sought assistance from multiple oversight bodies and local officials, including:
- Department of Housing Preservation and Development (HPD)
- District Attorney’s office
- Attorney General’s office
- Department of Investigation (DOI)
- Local government representatives from the Mayor’s office, City Council, Borough President, and Governor’s office.
Despite these efforts, responses have been insufficient. HPD’s Peter Donohue notably dismissed the violations as mere “politics,” and other inquiries have resulted in limited action.
Evidence of Misconduct and Financial Irregularities
Recent revelations have highlighted severe issues within Esplanade Gardens:
- Prestige Management’s Failures: Documents, including a termination letter for Prestige Management and an HPD audit report, outline significant mismanagement, and over 800 shareholders signed a petition demanding action.
- Questionable Voting Practices: Carolyn Lewis, a board member until recently, has faced scrutiny for voting on critical issues, despite being flagged in a non-primary residence case. HPD’s inaction on this conflict has been a point of contention.
- Financial Mismanagement: A January 18, 2022, board vote barred Prestige Management from future involvement. Financial records revealed discrepancies, including a misrepresented maintenance increase request, which contributed to a $6 million deficit due to a $250,000 monthly shortfall.
- Documented Misuse: Evidence includes an unauthorized rubber stamp with signatures from Malcolm Punter and Trevor Wilson and an audio recording suggesting an attempt by Trevor Wilson to deplete the co-op’s funds.
Critical Safety Concerns
The community faces urgent safety issues:
- Gas Outage: Building 6, with 312 apartments, has been without gas since November 2023.
- Heating and Hot Water Interruptions: An above-ground pipe linking two buildings has caused frequent heating and hot water disruptions.
- Steam Leak: A steam leak in a stairwell has led to dangerously high temperatures, with condensation damaging paint and creating slippery conditions on the floors in building 5.
Disturbing Conditions in Individual Apartments
Recent communication highlights dire conditions in individual apartments:
- A Senior’s Situation: An 85-year-old resident at 720 Lenox Avenue reported severe issues in her apartment. The senior, who has severe respiratory issues and is partially blind, must navigate her apartment with a face mask due to health concerns. Despite numerous appeals to maintenance and management, no action has been taken. The situation is exacerbated by an expansion joint on the 23rd floor spewing steam and hot water, causing extensive damage and health hazards:
- Hallway Closets: Damage to walls, ceilings, baseboards, tiles, and mold presence.
- Bedroom Closet: Damage to walls, ceilings, missing floor tiles, mold, and asbestos.
- Kitchen: Missing cabinet drawer faces and a hanging cabinet door.
- Living Room & Dining Room: Loose and hanging plaster on the ceiling.
- Bathroom: Water damage above the medicine cabinet with plaster needing repainting.
Termination of Prestige Management
On January 18, 2022, the Esplanade Gardens Board of Directors passed a motion to bar Prestige Management from any future management role, whether under its current name or any affiliated entity. The motion was proposed by Moiré Davis and seconded by Joseph Lawrence. The decision was based on:
HPD Compliance Audit (2011-2017): The audit uncovered serious irregularities with Mitchell Lama rules, including:
- Non-availability of shareholder records
- Mishandling of succession rights cases
- Inadequate primary residence verification
- Discrepancies in surcharge and administrative procedures
- Unauthorized Rubber Stamps: Prestige Management used an unauthorized rubber stamp bearing the name of the company’s President and a former board member, who had not served on the board for several years.
- Unprofessional Conduct: Prestige Management was accused of allowing unqualified individuals, contrary to the Bylaws, to run and serve on the Board of Directors. They were also criticized for destroying or removing Esplanade Gardens’ property, including corporate documents and shareholder records.
Board Members Supporting the Termination:
- Moiré Davis
- Brenda Harris
- Joseph Lawrence
- Betsy Lay
- Charles Mays
- Anthony Thompson
- Joseph Washington
- James White
Prestige Management’s Resignation and Rehiring
On September 14, 2018, Prestige Management formally resigned as the managing agent of Esplanade Gardens, effective 30 days later or until a new managing agent was appointed. This resignation followed the board’s decision to rescind a previously approved two-year contract extension due to ongoing performance issues. Prestige Management expressed disappointment and noted that they were not given a professional opportunity to discuss the issues leading to the contract’s rescission. The then EG Board elected to hire Metro Management.
Despite the termination, Prestige Management was rehired, prompting scrutiny from the Office of the Attorney General. On March 29, 2023, Attorney General Letitia James requested explanations for:
- Rehiring Prestige Management: The rationale for re-appointing a company with a history of compliance issues.
- Findings Justifying Rehire: The findings that justified Prestige Management’s capability to manage the property adequately.
- Recent Maintenance Increases: The basis for two recent maintenance increases approved by HPD.
Malcolm Punter’s Concerns
On September 27, 2018, Malcolm Punter, a former board member, raised concerns about the unauthorized use of his signature. Punter demanded the removal of all specimens or electronic representations of his signature and called for a review of corporate fiscal practices to prevent future misuse.
Board Meeting Highlights
During the Board meeting on September 11, 2018, several key issues were addressed:
- Destruction of Rubber Stamp: The rubber stamp bearing Malcolm Punter’s signature was retrieved from the safe and destroyed.
- Property Appraisal: The Board approved Miller Cicero LLC for a property appraisal based on the lowest bid.
- Lease Agreement: The Board discussed terms with the “Godfather of Harlem” production, including a $20,000 payment for upgrading an outdoor garbage compactor.
- Management Performance: Issues with Prestige Management’s performance, including equipment upgrades, arrears, and new lease agreements, were reviewed.
Not Exclusive to EG
In a decisive move aimed at restoring financial stability and addressing ongoing management concerns, the Board of Directors of Riverbend Housing Company has announced the termination of its relationship with Prestige Management Inc. This decision follows a thorough review of the company’s performance and its failure to meet the standards expected by the co-op community. Key Concerns Leading to the Termination:
Excessive Arrears of $2.9 Million: Under Prestige’s management, unpaid maintenance fees have reached an unsustainable $2.9 million, severely impacting the co-op’s financial health. This shortfall has limited the ability to fund necessary property improvements.
High Vacancy Rates: With 41 apartments currently vacant, the co-op has suffered significant revenue losses, further contributing to its financial strain. The extended vacancies also pose a risk to the upkeep and overall value of the buildings.
Unpaid Invoices Totaling $1.5 Million: Vendors have not been paid for months, leading to delayed services and growing concerns about the quality and reliability of essential operations. Prestige Management failed to manage the co-op’s financial obligations effectively.
Failure to Maintain Cleanliness and Basic Upkeep: Common areas, including stairwells, laundry rooms, and lobbies, have not been maintained to acceptable standards. Despite multiple complaints from shareholders, Prestige failed to address these issues, leading to deterioration of the living conditions within the co-op.
Metro Management to Take Over
In response to these issues, the board has selected Metro Management as Riverbend’s new managing agent. Metro Management is known for its experience in handling large housing cooperatives in financial distress. The board expressed confidence that Metro will bring professionalism, accountability, and a much-needed turnaround in the co-op’s operations and financial management.
What’s Next
The tenure of Prestige Management at Esplanade Gardens has been marked by significant controversy, involving compliance issues, unprofessional conduct, and legal inquiries. The ongoing scrutiny emphasizes the critical need for transparency and accountability in property management to effectively serve the community’s needs and uphold governance standards. As the situation evolves, the importance of responsive oversight and effective management remains central to addressing the community’s challenges and ensuring its stability. Do your part by voting on October 27th for Esplanade Gardens Board of Directors.
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