Taxing Times for Community Crusader

Sitting in his mother’s apartment at 788 Fox St., Ricky Flores looks through early photos he took in the 1970s when much of his neighborhood was abandoned (photo Heather Mrea).

Taxing Times for Community Crusader

Ricky Flores remembers when Banana Kelly came to the rescue. Back in 1981, when his block on Fox Street was dotted with piles of rubble where buildings once stood, the grass-roots group called Banana Kelly — named for the curving shape of nearby Kelly Street — began taking over decaying buildings in Longwood, including Flores’s.

"In the beginning, Banana Kelly did so much good," said Flores, whose mother, Ana, still lives in the old building at 788 Fox St. "They offered G.E.D. classes," he said, referring to high-school equivalency courses. "And job training. It was where you turned when you had a problem with your landlord."

But as a landlord, Banana Kelly has problems of its own. Records from the Department of Finance indicate that 788 Fox St. owes more than $180,000 in real-estate taxes — about one-third of the building’s estimated market value.

Other Finance Department records listing Banana Kelly or the group’s executive director, Claude Gooding, as the taxpayer show six more buildings with back taxes totaling more than $200,000. The debt is accumulating interest penalties at 18 percent a year.

Those records don’t reflect special payment plans Banana Kelly had arranged with the city, said Yolanda Rivera, chair of the Banana Kelly Community Improve ment Association. "These bills aren’t accurate. If they were, I wouldn’t be sleeping at night."

The city says they are accurate. "Whatever you see on that bill, that’s money they owe," said Larry Parkins, special assistant to the Deputy Commissioner of Finance, in response to questions about the tax bills obtained from the department’s computer. He said it is possible there are payment plans in place, though the department could not divulge the details because such arrangements usually are not public.

Payment plans are open to all taxpayers in the city of New York, Parkins said. "It is usually just to safeguard the property until you get back on your feet." Payment plans, he said, require that debtors agree to stay current on tax bills. But some departmental records show Banana Kelly tax bills going unpaid as recently as last year.

Banana Kelly would not provide a list of the properties it owns and its own estimate of tax arrears, despite several requests.

Rivera said that much of what appeared to be crushing debt would be wiped away by a city tax program called J-51, which rewards rehabilitation work with tax rebates.

But the J-51 program is not going to save 788 Fox St., according to Jamie Smarr, director of tax incentives at the Department of Housing Preservation and Development. Smarr said the property was ineligible for the program because Banana Kelly failed to complete the application by the 6-year deadline. "At this point, there is no chance to re-apply," he said.

Banana Kelly, which has been associated with the Longwood neighborhood since 1977, provides local residents with affordable housing and services such as job training and pediatric health care. It has grown from a group of 30 residents into a nonprofit organization with an annual budget of $4 million, almost three-quarters of which comes from government grants, according to 1997 tax returns. Banana Kelly recently partnered with the Natural Resources Defense Council on a $400 million project to build a paper mill in the South Bronx’s Harlem River Rail Yards.

Tax debts at Banana Kelly could be a sign of internal problems or a prelude to a larger trend of housing woes in the neighborhood, said Emmanuel Tobier, an urban-planning professor at New York University who has been researching economic changes in the Bronx. "Banana Kelly is supposed to be able to do this," he said.

Part of the difficulty may be the underlying economics of low-income housing, but Banana Kelly must take responsibility as well, some housing experts say. "There are housing groups that have no tax arrears, and there are housing groups that have a lot," said Ann Henderson, senior policy director at the Urban Homesteading Assistance Board. "Management has got to have something to do with it, because they’re all getting buildings in the same shape."

Still, Henderson said, many low-income housing groups across the city are struggling with real-estate tax payments. Compounding the problem — literally — is the city policy of charging 18 percent interest on real-estate tax debt, which Henderson said can bury property owners under mounds of interest. "At a certain point," she said, "paying your taxes becomes like spitting into the wind."

Other Department of Finance documents show that Banana Kelly stopped paying taxes on 788 Fox St. during 1995 and 1996, a time when many city landowners were taking advantage of the city’s then-lenient stance toward real-estate tax collection, said George Sweeting of the Independent Budget Office, a city agency that tracks the budget. When the administration got tough on overdue taxes in 1996, many landlords with low-income tenants were caught short of cash — including Banana Kelly.

"We couldn’t make the payments the way the city wanted," Rivera said, adding that higher water and sewer charges that took effect then made matters worse. So Banana Kelly and the Finance Department arranged alternate payment plans, she said.

Part of the organization’s cash-flow problem stemmed from tenants who couldn’t pay rent, Rivera said. As both a community group and a landlord, Banana Kelly faces hard choices, and sometimes moral obligations outweigh financial ones. "We are accountable to the good residents who invested their time in run-down buildings," Rivera said. Often, she said, Banana Kelly opted to give tenants with short-term economic problems a break.

Another factor, Rivera said, was the large amount of money Banana Kelly spends on repairs and rehabilitation. She said many buildings were barely habitable when Banana Kelly agreed in the 1980s to take them from the city, which had acquired the derelict properties from landlords and made what Rivera called "emergency fixes."

"It is not fair to paint Banana Kelly as the villain and it’s also not fair to say the city dumped these buildings onto Banana Kelly," said Harry DeRienzo, one of the group’s founders. Now he is president of the Parodneck Foundation, a citywide nonprofit that helps provide low-income housing. "It is a very difficult business."