EAST MIDTOWN PLAZA WINDOW REPLACEMENT

To pay for this capital improvement, the board held a special meeting on July 21, 2010, in which a majority of shareholders — 308 to 154 — approved a $5 million loan from Amalgamated Bank, which would be repaid via a five-year assessment of $30.75 per share. HPD approved the loan and assessment, and in an Dec. 21, 2010 letter, HUD as well signed off on that as well.

Canning Row

Before the vote had even been taken, however, shareholder James Canning, of apartment 22C in the complex's 400 Second Avenue building, filed suit to stop the window replacement until the co-op and the courts first cleared a few things up. In his April 26, 2010, lawsuit, he claimed that the board of East Midtown Plaza "violated statutes, by-laws and [the] Certificate of Incorporation," and demanded that the board explore all "possible means of financing." He also wanted the court to remove the board — and additionally, sought to overturn an eviction order stemming from his refusal to provide access to his apartment to inspect and measure the windows. (That last was settled in August 2010 with his allowing the board in and allowing the eventual replacement of his windows.)

Canning specifically objected to the board's decision to finance the window replacement project with a loan and an assessment, and believed the windows could have been "replaced for free," by securing a $6 million grant from HDC. This, he claimed, put the board "in default" of the Certificate of Incorporation, the by-laws, the New York State Business Corporation Law and the Rules of the City of New York (RCNY), and was "forcing" him to comply with its "unauthorized program." He said that the law 28 RCNY § 3-1(d)(4) required the board to provide the "most economical operation of the development."

Complicating matters was a far more contentious issue than how to pay for new windows. Since the mid-2000s, the East Midtown Plaza board has been pursuing privatization. Mitchell-Lama co-ops were designed so that, for example, shareholder Jeanne Poindexter bought a balconied, two-bedroom apartment there in 1974 for just $4,300. The catch is, should she leave — and many New Yorkers don't, making their Mitchell-Lama apartments their lifelong homes — she could only sell it for the same relative price. In her case, her equity in 2011 was roughly $18,000. The whole idea is to keep the city affordable to working-class, middle-class people, and prospective buyers have to meet specific economic requirements.

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