Bronx Co-op Board Accused of Mismanagement by Shareholders

A epic battle between shareholders and their co-op board is unfolding in the Bronx, and it holds lessons for every resident of every co-op in the city.

On one side is a group of disgruntled shareholders at the 273-unit Park Reservoir co-op, a Mitchell-Lama that's managed by Amalgamated Housing, the nation's oldest and largest limited-equity cooperative; on the other side is the Park Reservoir co-op board, which is overseen by the state's Department of Housing and Community Renewal (DHCR).

Citing rising monthly maintenance, an amemic reserve fund and a heavy debt load, the disgruntled shareholders, who call themselves the Park Reservoir Shareholders Association, accuse the board of fiscal irresponsibility and a lack of communication, Bronx Times reports. “We no longer trust the board,” says Colleen Hanley, a founding member of the association.

The board and the DHCR maintain that the group has not shown proof of wrongdoing — and management argues that it is still providing high-quality, relatively affordable housing amid bleak financial circumstances and sky-high housing costs across the city.

According to financial documents given to shareholders, from 2022 to 2023 utility costs increased by almost $219,000, repairs and maintenance increased by close to $43,000, insurance increased by $29,500 and labor increased by $7,000.

Charles Zsbedics, the property manager at Amalgamated Housing who also oversees Park Reservoir, says the co-op is attempting to secure a large, low-interest loan from the state and is “leaving no stone unturned looking for viable lending options.” The co-op's financial struggles are “decades in the making,” he adds. In every two-year budget cycle, boards face pressure not to raise monthly maintenance or levy assessments — but if they don’t ask for enough, the missing amount doesn’t just go away. “If you don’t pay today," Zsebedics says, "you pay tomorrow."

The Shareholders Association sent detailed questions about the corporation's financial standing DHCR and asked for a special meeting. The response was chilly: “DHCR has read through the remainder of your emails with regards to improprieties of the housing company and do not find any wrongdoing by the housing company or the board of directors.”

Which means that this co-op war, like so many others before it, will likely be decided at the ballot box. The October election for new board members will be the best — and perhaps only — way for unhappy shareholders to seek different leadership, according to Dean Roberts, a member at the law firm Norris McLaughlin who represents the co-op board. Six of the nine directorships will be up for the vote.

Kevin McConnell, a real estate lawyer who's not involved in the Park Reservoir war, notes that whenever shareholders take on a co-op board, "It's not going to be easy."