Note to reader: This is long, and I apologize. Usually, for an essay of this depth, a magazine will have an editor, a copy editor, a researcher, a fact checker and a lawyer supporting me. I really need that editor! But for now, I am one guy, writing within 48 hours for a deadline: the city’s council meeting on March 2. If you got to the end, thank you! And thank yourself: you now know a thing or two or three about the comings and goings in Newburgh that you did not know yesterday.
Please comment at the end: I make mistakes, especially under a deadline like this one, and I rely on YOU to keep me honest. Please note: ONLY residents and business or property owners in Newburgh will be permitted to comment. Again: I am one guy, so it may be a few days for new people to have their registration approved.
And be supportive! In two months, you will be able to subscribe!
In Newburgh, New York, two housing controversies are unfolding simultaneously. The city’s response to each reveals something troubling about how power operates in this small Hudson Valley city. But underneath the dysfunction, the negligence, and the arcane financing structures lies a genuine alternative — one that would put a set of buildings in the hands of the people who actually live in them.
The Kenney Tenants and Years of Abandonment
At the Kenney Apartments, over 100 low-income families and seniors¹ — overwhelmingly Black and Hispanic — have been without consistent heat and hot water since at least 2023, including a complete shutoff that lasted from October 2025 to January 2026.² This is not a new problem. The City of Newburgh’s own code enforcement officer, Ronald Decker, stated in a December 2025 court filing that every year for the past five years, the same heating issues have recurred. He described the boilers as old and outdated.³ The boiler room photographs now circulating show machinery in a state of advanced decay. The community room is unusable. None of the common facilities function. The building’s last significant improvements were LIHTC-funded renovations in the late 1990s⁴ — a quarter century ago.
Under New York State law, providing heat and hot water is not optional. It is a legal obligation.⁵ Under the City of Newburgh’s own published policy, every residential rental unit must be inspected every year by a City Code Compliance Officer or a Licensed Professional Engineer.⁶ That requirement is not a suggestion. It is the city’s own stated standard, published and distributed under the seal of the Department of Code Compliance.
Which means one of two things is true. Either the mandatory annual inspections were conducted at Kenney, violations were documented, and the city chose to do nothing for years. Or the inspections were never conducted at all, and the city failed to enforce its own requirements against this landlord for years. Both conclusions are damning. In the first case, the city knowingly permitted illegal and dangerous conditions to persist in a building occupied almost entirely by Black and Hispanic tenants. In the second, it simply looked away.
Newburgh’s current city manager has been in office for four years.⁷ He bears direct responsibility for what has and has not happened on his watch. But the years of neglect at Bourne and Kenney predate him, implicating a succession of city administrations that looked away while the buildings deteriorated and the tenants suffered. What the current city manager cannot escape is this: when Contour Housing Partners submitted its PILOT proposal to his office in May 2025, the conditions at Kenney were already well documented. He received that proposal, reviewed it, and moved it toward a council vote. The question of what he knew, and when, and what he chose to do about it, is a question the council should be asking on Monday.
There is a structural explanation for how this became possible that has received little public attention. Newburgh’s city manager also serves as the city’s chief fiscal officer.⁸ He is simultaneously the person who decides what the city does and the person who controls the city’s financial records. That concentration of power has no internal check.
Consider what that means in practice. The city manager received Contour’s PILOT proposal. The city manager decided to move it toward a council vote. The city manager controls the financial records that would document years of foregone tax revenue under the existing PILOT, the full cost of non-enforcement, and the city’s potential liability exposure for years of code violations in a building occupied almost entirely by Black and Hispanic tenants. He is simultaneously the decision maker, the fiscal gatekeeper, and the keeper of the records that would reveal the consequences of his own decisions. That is not governance. That is a closed loop.
In any well-governed municipality these functions are separated precisely because their combination creates irresistible conflicts of interest. The comptroller is supposed to be a check on the city manager. When they are the same person that check disappears entirely. Decisions get made, money gets managed, and records get kept — all by the same hand, all without independent oversight.
This is also a cautionary lesson about professional lanes. A comptroller’s entire training orients them toward fiscal exposure and its containment. That is a necessary skill. It is not a governance skill. A comptroller promoted to city manager brings that same lane to every problem the city faces. The Kenney crisis is not seen primarily as a human rights failure demanding enforcement. It is seen as a liability requiring management. Warden Circle homeowners are not seen primarily as constituents requiring reasonable accommodation (I will get to them in more detail later). The PILOT negotiation is not seen primarily as a reward for a negligent landlord. It is seen as the most fiscally efficient way to contain the city’s exposure while appearing to act.
When you give one person the power to make decisions, control the money, and manage the records — with no separation of those functions and no meaningful oversight — you do not get governance. You get exactly what Newburgh has.
The city carries significant potential liability — for negligent non-enforcement of its own code across multiple administrations, and possibly for fair housing violations given the racial composition of the tenant population. That liability does not disappear on its own. But it can be managed. And a PILOT negotiation is a remarkably effective way to manage it — transforming a story about municipal negligence and potential civil rights violations into a story about constructive policy, while the underlying failure recedes from public attention, absorbed into the administrative machinery of a transaction designed to move forward.
CVH, the Attorney General, and a Question the Tenants Deserve to Have Answered
Community Voices Heard has been mobilizing Kenney tenants to write letters to their council members urging a yes vote on the PILOT. CVH presents itself as a tenant advocacy organization. It is simultaneously claiming to be working in coordination with the office of Attorney General Letitia James.
That claim requires scrutiny — not because CVH’s motives are necessarily suspect, but because the public record raises questions that tenants being asked to write those letters deserve to have answered before Monday night.
On February 3, 2026, Attorney General James filed an Order to Show Cause in Orange County Supreme Court against Bourne & Kenney Redevelopment Company, LLC and their property manager.⁹ The action seeks to permanently enjoin the respondents from operating in New York State until they post a $300,000 performance bond, orders boiler and mold remediation, prohibits tenant retaliation, and critically — enjoins the respondents from selling any properties unless and until all unsafe and unsanitary conditions are repaired. That injunction is a direct legal obstacle to the transaction the PILOT is designed to facilitate.
On February 27, the Attorney General escalated dramatically. A Third Amended Verified Petition was filed in Orange County Supreme Court naming three individual respondents for the first time: Emmanuel Kazanas, an owner of Bourne & Kenney Redevelopment; J. Christopher Daly, its president and managing member since the building’s acquisition in 1999; and William Deignan, its executive vice president and a principal of Newfield Real Estate Investor Services, the management entity that replaced the original property manager.¹⁰ The corporate veil has been pierced. These individuals now face personal liability.
The petition reveals that Bourne & Kenney has defaulted on its mortgage, its property taxes, and its insurance. The mortgage servicer — Bank of New York — has submitted claims to the State of New York Mortgage Agency for reimbursement under the mortgage insurance program.¹¹ The building’s private ownership has not merely failed. It has financially collapsed.
And here is the development that changes everything about Monday’s vote: the Attorney General is now requesting the court appoint a temporary receiver to collect rents, make repairs, and pay bills in place of the respondents.¹² A receivership, if granted, would deliver immediate relief to tenants — boiler replacement, mold remediation, structural repairs — under direct court supervision, without requiring a PILOT vote, without requiring a sale, and without requiring the tenants to wait years for a new developer to close a transaction and begin renovations.
The petition also adds a new cause of action under General Business Law §349, which prohibits unfair, deceptive, and abusive practices. Civil penalties of up to $5,000 per violation accrue for every code violation persisting after February 17, 2026. With over 160 documented violations,¹³ the respondents’ potential liability is enormous and growing daily.¹⁴
This is the legal landscape as of Friday afternoon. And the question it raises for CVH is straightforward: have the tenants being mobilized to write letters in support of the PILOT been told that the Attorney General filed a Third Amended Petition requesting the appointment of a receiver? Do they understand that court-ordered receivership could deliver the same repairs they are desperate for — immediately, under judicial supervision — without requiring a thirty-year tax abatement for a private developer? Have they been informed that the building’s owners have defaulted on the mortgage, the taxes, and the insurance, and that the state mortgage agency is already absorbing losses?
If CVH has shared this information with tenants and they still prefer the Contour deal, that is an informed choice and it deserves respect. It is also possible that CVH has not yet had time to digest the Third Amended Petition, which was filed only Friday. If so, that is understandable — but it is an argument for slowing down, not for voting Monday on the basis of a legal landscape that changed twenty-four hours ago. If, however, CVH is mobilizing tenants to support a PILOT without explaining that the AG’s office — the same office CVH claims to be coordinating with — has just asked a court to take the building away from its current owners and place it under a receiver, then the tenants are not making an informed choice. They are being organized around incomplete information. And an organization that mobilizes uninformed consent is not doing advocacy. It is doing logistics.
The council should ask CVH’s representatives, on the record Monday night, three questions. First: is CVH aware of the Third Amended Petition filed February 27? Second: has CVH explained to the tenants it is mobilizing that the AG is seeking a receiver who could make repairs without a PILOT? Third: has anyone from the Attorney General’s office confirmed to CVH that they support the PILOT and the sale to Contour, or is CVH’s claim of coordination an assumption that has not been verified?
These are not hostile questions. They are the questions any responsible council would ask before voting on a thirty-year tax abatement based partly on the claim that the state’s chief law enforcement officer supports the deal — when that officer’s most recent court filing appears designed to create an alternative to it.
The Tenants Themselves
One dimension of this situation that has received insufficient attention is the tenants’ own relationship to their homes. These are not people looking for relocation assistance or temporary housing while repairs are made. Many of them are deeply attached not just to their neighborhood but to their individual units — the specific places where they have built their lives, raised their children, established their routines. The prospect of temporary displacement during renovation, however brief and well-managed, is a source of genuine fear and not an abstraction.
Contour’s presentation to the city council on January 22nd specifically addresses this concern, promising that tenants will not be displaced overnight, that units will be returned to livable conditions at the end of each construction day, and that the Uniform Relocation Act will govern any circumstances requiring temporary relocation.¹⁵ Those are meaningful commitments. But they are commitments made in a PowerPoint presentation to a city council, by a buyer whose transaction may be legally blocked by a sitting Supreme Court judge. A promise in a slide deck is not a legally enforceable tenant protection. Before any vote is taken, tenants deserve to know exactly what protections will be binding, in writing, and what happens to those commitments if the deal structure changes.
PILOTS: A System of Structural Lending Capture
The PILOT itself deserves scrutiny beyond this single transaction. The proposed terms replace an existing PILOT of $80,000 per year with a new payment of $92,250 in year one — a 15% increase — escalating at 3% annually over 33 years.¹⁶ This is more revenue than the current arrangement provides, and that distinction matters. But it is still a fraction of what full property tax assessment would yield, and the gap between what is paid and what would otherwise be owed is a cost shifted onto the existing tax base — onto every homeowner in Newburgh who pays full taxes on their property.
The deeper problem is systemic. The Low Income Housing Tax Credit and PILOT structure that undergirds virtually all affordable housing preservation finance in this country is built to privatize profit while socializing cost.¹⁷ Tax credit investors underwrite deals based on projected cash flows. Those projections depend on reduced tax obligations. Without the PILOT, the tax credit math doesn’t work — not because developers are incompetent or dishonest, but because the system is architected that way. Developers did not design this system. But they operate within it, and they benefit from it, and the public absorbs the difference.
The consequences of this system playing out in real time in Newburgh are instructive. A local developer recently sought a 15-year PILOT for a market rate project. He approached multiple local and regional banks. Every one either refused to finance it or offered unworkable terms — even with the PILOT in hand. No single bank issued an ultimatum. None had to. The lending market itself made the decision. The only path to financing was to convert to affordable housing and extend the PILOT to 30 years, aligning the project with a regulatory landscape — HCR, CPC, the Small Business Participation Loan Program — that dilutes the risk the banks won’t carry on their own. That risk doesn’t disappear. It gets distributed across state agencies and quasi-public lending programs, which means it lands on taxpayers. The banks get a performing loan. The developer gets financing. The public gets the risk and a 30-year PILOT. And the city loses control of its own housing policy.
Think of it this way. Suppose you are a bicyclist riding at 25 mph in the middle of heavy traffic down Fifth Avenue. Most people would look at you and say “You’re crazy! What are you doing out there?!” But you have done this many times. You have 150,000 miles under your belt. You know that no single driver is likely to try to hit you. Few in any of those cars will make a decision to force you off the road. You have an intuitive feel for where the seams are, where they will open up. You survive by riding where the traffic allows. And so you have built up a risk tolerance that most people don’t possess. Enough so that sometimes you say, hell, I’m going to take up a whole lane, because I pay taxes, and I belong here too. Even though the road wasn’t built for you, and the traffic doesn’t adjust for you. Most people don’t know that because they don’t try, because their risk tolerance is low.
Now suppose that bicyclist is a housing developer. And the cars are the lending institutions. And the big trucks are the Citibanks, the Chase Manhattans. On a road whose lanes these institutions designed themselves. And they don’t want you there, and they will say it is for your own safety that you get off the road. But they have risk tolerances as well, and what they are really concerned about is the risk they expose themselves to if they hit you. And so they design a bicycle lane and say “You! Stay over there!” And that is not negotiated. That is dictated.
But if I am comfortable being in the middle of their traffic, and I want to play with the big guys, who are they to say that I cannot?
That is exactly what happened to a Newburgh developer. He wanted to ride in traffic. Every bank on the road said no. He ended up in the bicycle lane — a 30-year affordable PILOT with HCR and CPC absorbing the risk the banks refused to carry. Not because he chose it. Because the road left him no alternative. And the bicycle lane was designed by the same institutions that wouldn’t let him ride with them.
One rider gets forced into the bicycle lane. But if a thousand bicycle riders taking up the whole road — that’s something else entirely. That’s what happens when a community decides it is done staying in the bike lane the banks designed for it. Then the traffic has to stop. And then the system builds infrastructure for you — not because they want to, but because you’re already there and you’re not leaving. Nothing is given to you. You have to fight for it. That is organizing. And that is what Newburgh needs next.
Risk tolerance is where the financial system meets democracy. Now, this requires a name, because it is a distinct form of extraction that operates differently from the practices most people recognize. Traditional redlining — named for the red lines drawn on federal maps in the 1930s — was the practice of systematically denying loans, insurance, and investment to residents of predominantly Black and minority neighborhoods. Capital refused to enter. Communities were starved of investment, property values were suppressed, and wealth that might have been built across generations was instead foreclosed. Redlining was disinvestment as a weapon. Reverse redlining, its more widely recognized successor, targets those same communities with predatory financial products — subprime mortgages, exploding-rate refinancing schemes — extracting wealth from individual borrowers through terms designed to fail.
What happened in Newburgh is neither of those things. It is not the denial of capital. It is not predatory lending to vulnerable individuals. It is something that operates at a higher level and is in some ways more insidious: the displacement of municipal governance by private lending conditions. A bank, in a loan committee meeting, determined the affordability profile, the tax structure, and the public subsidy requirements of a local housing development — decisions that in any functioning democracy would be made by elected officials accountable to voters. The developer had no meaningful choice. The city council was presented with a fait accompli. The community gets capital, but the capital arrives with conditions that transfer decision-making power over public policy from elected institutions to private ones. Call it structural lending capture. It is the same dynamic that the IMF imposes on developing nations through structural adjustment programs, operating at the municipal level.
Let THAT sink in. Banks — and presumably Albany, because they provide the blessing — treat Newburgh like a Third World country. We may give you the money, but only if you surrender control over your own future. That is not a partnership. That is leverage dressed as investment, and it is a serious policy issue that citizens need to demand that the state legislature address.
If Contour Housing Partners — a developer that leverages its strategic partnership with Pennrose, a nationally recognized firm with over 50 years and $5 billion in completed development¹⁸ — is genuinely committed to affordable housing as a mission and not merely as a financing vehicle, the question worth asking is whether an organization of that scale and institutional depth could structure a transaction that does not require the public to subsidize it. The honest answer may be that within the current system, they cannot. And that is precisely the argument for changing the system, not for ratifying it one more time.
There is another question the council should be asking before any vote is taken. News12 reported that under this deal, the new company would also take over the nearby Bourne Apartments.¹⁹ The PILOT vote before the council addresses the Kenney Apartments. But what are the terms for the Bourne Apartments? Is Bourne being acquired at affordable rates, or at market rate? If the transaction involves both properties, the council should be examining both sets of terms together — not voting on Kenney in isolation while the terms for Bourne remain undisclosed. A distressed affordable housing property makes a very effective loss leader if the real return is a market-rate conversion nearer the waterfront.
The Warden Circle Double Burden
Meanwhile.
In a predominantly white working-class suburban neighborhood on the other side of the city, homeowners received letters from the city informing them that their driveways and sidewalk curbs are not ADA compliant. Each homeowner faced fines of $250 per day until the work is completed. The cost of compliance has been reported at $15,000 to $20,000 per household.²⁰ These are not wealthy people. They are outraged, and they are being ignored.
According to community members, the city manager initially offered no grace period. Only after residents appeared at a city council meeting and expressed outrage did Corporation Counsel announce a one year grace period — a concession that appears to have been extracted by community pressure rather than offered as a matter of policy. Even with that concession, working class homeowners are being asked to absorb $15,000 to $20,000 in unplanned expenses within a year.
What’s more, the Warden Circle homeowners are being hit twice. They face crushing out-of-pocket costs to bring their properties into compliance with a standard the city has chosen to enforce with sudden urgency. As property taxpayers, they will also absorb the gap between what the new PILOT pays and what full assessment would require. The city is simultaneously fining them and passing them part of the bill for a tax abatement on a property whose landlord has broken the law for years.
The same city government that could not find the will to enforce habitability law against a negligent landlord has no difficulty finding the mechanism to extract money from working-class homeowners. In one case, enforcement is absent. In the other, it is a weapon.
The City Manager and the Politics of Deflection
The official most responsible for the current moment — if not for the full duration of neglect — is Newburgh’s city manager. In his four years in office, the conditions at Kenney continued to deteriorate. He received Contour’s PILOT proposal in May 2025, months before the AG filed its action, and has moved it toward a council vote while tenants continued to go without heat. He is simultaneously pursuing devastating financial penalties against Warden Circle homeowners who have no more political recourse than the Kenney tenants do.
It has to be noted that the city manager is Black. The working-class homeowners facing punitive ADA fines in Warden Circle are mostly white. The Kenney tenants are overwhelmingly Black and Hispanic. A Black city manager’s identity does not immunize the city against fair housing liability for years of selective non-enforcement in a predominantly Black and Hispanic building. What it does do is make one and only one thing clear: both communities are being harmed by the same administrative structure, by an apparatus that extracts from the vulnerable regardless of their color, protects institutional actors regardless of their failures, and leaves everyone outside that circle of protection — Black and Hispanic tenants without heat, white working-class homeowners facing ruinous fines — to fend for themselves. This is not a story about race. It is a story about power.
What connects these two situations is the concentration of administrative power in the hands of a city manager accountable to no one in any practical sense, under whom enforcement has consistently materialized where it generates leverage and revenue, and has consistently failed to materialize where the law would require the city to spend time and money addressing conditions it allowed to persist. Both communities are complaining loudly. Neither has been heard.
There Is a Better Way
The Third Amended Verified Petition filed by the Attorney General on February 27, 2026 establishes what should have been obvious years ago: the private ownership model at Kenney Apartments has not merely failed — it has financially collapsed. The respondents have defaulted on their mortgage, their property taxes, and their insurance. The State of New York Mortgage Agency is processing claims from the mortgage servicer. The Attorney General has asked the court to appoint a receiver to collect rents, make repairs, and pay bills in place of owners who can no longer — or will no longer — do any of those things.²¹ Three individuals have been named personally as respondents. The corporate veil has been pierced. The building, in every meaningful sense, no longer has functioning private ownership.
The options that have never appeared in any public discussion of Kenney Apartments are the ones most worth considering. And the most important thing to understand is this: the legal machinery to pursue those options is already running. The city doesn’t need to create anything new. It needs to get out of the way of what Tish James has already started — and then get behind it.
The Attorney General’s action does something the city refused to do for years: it holds the current owner legally accountable. It seeks to bar the respondents from operating in New York State, demands a $300,000 performance bond, orders repairs, and enjoins them from selling the property until every unsafe condition is remediated. The Third Amended Petition goes further: it names the individuals behind the LLC, documents the mortgage default, and asks a court to take the building out of their hands entirely.
That leverage belongs to the tenants. And the city should be using it on their behalf — not working around it by approving a PILOT that helps the current owner complete the very sale the AG is trying to block.
This is the moment the city council must decide what comes next. And the question before them is not whether to approve a PILOT for Contour. The question is whether to repeat the identical structure that produced this outcome — private developer, tax credit financing, PILOT agreement, tenants as renters with no equity and no governance role — or to use this crisis as the foundation for something the tenants themselves would control.
Receivership First
If the court grants the AG’s request, a temporary receiver takes control of the building immediately. The receiver collects rents, makes repairs, pays bills, and reports to the court. Tenants get functioning boilers, mold remediation, and structural repairs — not in two or three years when a new developer closes on financing, but now, under judicial supervision.
Receivership does not require a PILOT. It does not require a council vote. It does not cost the taxpayers a dollar. It requires a judge’s order — and the AG has already asked for one.
The council could also levy punitive fines against the current owner — fines comparable in scale and urgency to those it is pursuing against Warden Circle homeowners for sidewalk geometry. The legal authority exists. The documented violations exist — over 160 of them. The political will does not.
But receivership is not an endpoint. It is a bridge. Once the violations are cured and the building is habitable, it will need a permanent owner. The AG’s petition blocks any sale until all repairs are complete. That timeline — months, at minimum — is exactly the window needed to organize what should come next.
Why Didn’t the City Do This Itself?
“The master’s tools will never dismantle the master’s house.”
— Audre Lorde, Sister Outsider (1984)
Why didn’t the city do this? It could have. That is the most damning fact in this entire story.
Under New York’s Real Property Actions and Proceedings Law, Article 7-A, a municipality can petition for appointment of an administrator when a building has conditions dangerous to life, health, or safety.²² The city had documented code violations going back years. Its own code enforcement officer stated in a December 2025 court filing that the same boiler failures recurred every year for the past five years.³ Three units were condemned.²³ The city had standing and the factual predicate. Corporation counsel could have filed a 7-A proceeding in City Court at any time.
The city could have levied the $250/day fines its own code authorizes — the amount that they did apply to the Warden community — or the $1,000/day fines available under the state Property Maintenance Code.²⁴ With over 160 violations, the daily exposure would be enormous. The city could have made emergency repairs and placed a lien on the property. Councilwoman Stewart publicly asked the city to do exactly that in January — fix the boilers and bill the landlord.²⁵ The city declined.
Every one of these tools was available to corporation counsel. None of them were used. Instead, it took Councilman Rob McLymore calling the Attorney General’s office directly to get the law enforced against the owners of the Kenney Apartments.²⁶
And here is where Newburgh’s council-manager structure reveals its most corrosive consequence. McLymore could not direct corporation counsel to file a receivership petition, or to pursue fines, or to make emergency repairs. He has no authority to do so. In the council-manager form of government, corporation counsel reports to the city manager — not to the council.²⁷ An individual council member cannot order the city’s lawyer to go to court. Even the council as a body can only direct the city manager to act; they cannot bypass him and give orders directly to city staff.²⁸ And if the city manager decides not to use the appropriate tools, the council’s only remedy is to fire him — which requires a super-majority vote that this council, as the 4-3 succession vote demonstrated, cannot produce.
So McLymore did the only thing the system permitted: he went over the city manager’s head to a state official who has independent enforcement authority and does not answer to the city manager. He called the AG because the AG is the only lawyer in this system who doesn’t work for the person who did not use the appropriate tools.
The council-manager structure did not just fail to prevent the Kenney crisis. It structurally prevented the elected official who represented the people living in these conditions from using the city’s own legal tools to address them. The professional manager controlled the lawyer. The lawyer answers to the manager. The manager did not use the appropriate tools. The elected representative of the tenants living in sewage had to call Albany to get the law enforced in his own city. That is not a story about one city manager’s decisions. It is a story about a form of government that makes those decisions inevitable.
The Tenants Should Own Their Homes
The most transformative option — and the one most deserving of serious public discussion — is cooperative ownership. And the financial collapse documented in the Third Amended Petition is precisely what makes it possible.
A building in mortgage default, with a state agency absorbing losses, with over 160 outstanding code violations, three individually named respondents facing personal liability, and a court-ordered receivership pending — that is not a building that commands market-rate acquisition pricing. This is a distressed asset. Its value to a private developer depends entirely on the PILOT the council grants. Its value to the tenants is the home they already live in — the home they have paid for, month after month, while sewage leaked through their ceilings and a two-year-old child wheezed from mold that management refused to remediate.
The AG’s injunction against the sale creates exactly the kind of legal and financial pressure that makes a distressed owner willing to negotiate terms they would otherwise never accept. A landlord who cannot sell, cannot operate without a $300,000 bond, faces permanent injunction from the property management business in New York State, has defaulted on the mortgage, and now faces personal liability has very few options. One of those options is a negotiated settlement in which the building is transferred — at a deeply discounted price reflecting its distressed condition and the owners’ legal jeopardy — to a tenant cooperative.
The mechanism exists. New York’s Housing Development Fund Corporation statute authorizes limited-equity cooperatives for low-income housing.²⁹ The Urban Homesteading Assistance Board — UHAB — has more than fifty years of experience and has created over 1,300 cooperatives comprising more than 30,000 units of affordable housing.³⁰ UHAB’s origins are in the sweat equity movement of the 1970s. When landlords abandoned buildings across the Lower East Side, Harlem, and the South Bronx, tenant squatters moved in. At first, the city tried to clear these buildings by arresting the squatters. Once the city realized that the squatters were making repairs with their own hands, and building functioning homes out of shells the city had written off, New York City eventually recognized that they could save money by recognizing what the squatters were doing — building new communities and converting shells into tax ratables — and created a formal path to ownership. UHAB developed the Limited Equity Cooperative model and the Tenant Interim Lease program that HPD adopted in 1978, providing the legal framework for hundreds of building conversions.³¹ Many of those buildings remain tenant-owned and affordable today, forty and fifty years later, precisely because limited-equity cooperatives remove housing permanently from the speculative market.
UHAB still exists. It still does this work. It is a ready and willing technical assistance partner for exactly this kind of conversion. I know this because I know a couple of the people who played roles in this movement and still cook meals in their kitchens there.
Tenant cooperatives can access Low-Income Housing Tax Credits through nonprofit development partners — the same financing tool that was used to develop the Kenney Apartments in 1999,⁴ but with the tenants, not absentee investors, as the long-term stakeholders. The tax credits flow to investors who provide equity capital for rehabilitation in exchange for the credits — the same financing mechanism Contour would use, but without the private ownership structure on the other end. The cooperative structure requires a nonprofit partner to manage tax credit compliance during the initial compliance period, but the building itself belongs to the tenants. Community land trusts offer a parallel structure that permanently removes the building from the speculative market while maintaining affordability through ground lease restrictions.
Where Does the Money Come From?
This is the first question anyone will ask, and it deserves a direct answer. The money exists. It does not require a municipal PILOT. It requires assembling financing from sources that are already available and in some cases are already in motion.
The current owner is the first source. The AG’s petition seeks restitution to tenants for breach of the implied warranty of habitability — compensation for rent paid during uninhabitable conditions, costs of space heaters, and related damages.³² The new GBL §349 cause of action seeks civil penalties of up to $5,000 per violation.¹⁴ That money could come from the current owner and the three individually named respondents as part of any settlement and could seed the cooperative’s initial rehabilitation fund. The $300,000 performance bond the AG is already seeking exists specifically to fund repairs and restitution. In a cooperative conversion scenario, those funds flow directly to the building’s rehabilitation rather than to a developer’s construction budget.
New York State Homes and Community Renewal already finances affordable housing preservation through low-interest loans, tax credits, and subordinate mortgage programs. Contour’s own presentation to the city council identifies these same HCR programs as their intended financing sources.¹⁵ A tenant cooperative can access those exact same programs. The money does not require a private developer as the intermediary.
Community Development Financial Institutions — CDFIs — are mission-driven lenders specifically capitalized to serve communities that conventional banks underserve. They regularly finance cooperative conversions and community land trust acquisitions. UHAB has deep relationships with CDFIs that have financed exactly these kinds of transactions in New York for decades.³⁰
The city itself receives Community Development Block Grant funding annually from HUD. Those funds can be directed toward affordable housing preservation and cooperative conversion. The city doesn’t need to grant a tax abatement — it could instead direct existing federal funds toward a tenant ownership model.
SONYMA is already absorbing losses on the defaulted mortgage.¹¹ The state mortgage agency has a direct financial interest in the building’s future. A cooperative conversion with LIHTC financing and UHAB technical assistance would better protect SONYMA’s investment than another round of private ownership that may default again in twenty years.
And perhaps most importantly: the deeply discounted acquisition price that a distressed owner under AG action would be compelled to accept dramatically reduces the capital needed for acquisition, leaving far more financing capacity available for rehabilitation. Emmanuel Kazanas, J. Christopher Daly, and William Deignan — now personally named as respondents¹⁰ — are not in a position to demand market price for a building they have destroyed.
The bottom line is this: the financing sources that would fund a tenant cooperative conversion are the same sources Contour would use. What changes is who ends up owning the building at the end of the process. Under the PILOT proposal, it is a private developer whose investors will profit for thirty-three years. Under cooperative conversion, it is the tenants themselves.
Why It Has to Be Ownership
“Power concedes nothing without a demand. It never did and it never will…If there is no struggle, there is no progress. Those who profess to favor freedom, and yet deprecate agitation, are men who want crops without plowing up the ground.“
Frederick Douglass, “West India Emancipation,” Canandaigua, New York, 1857
Wilhelmina Lamb has lived at the Kenney Apartments for twenty-seven years. She told a reporter in January that some tenants are afraid to speak up for fear of being thrown out, but that she is not afraid. “We’re all just looking for respect.”³³
A cooperative conversion would give her, and the families around her, something more durable than respect: ownership, governance, and the legal right to hold management accountable — because management would be them.
The Kenney tenants have not rehabbed their building with their own hands. But they have stayed. Through years of broken boilers, failed inspections, and an absentee landlord, they have continued to pay rent, raise their children, and build their lives in these specific homes. That sustained tenancy through conditions that would have driven others out is its own form of investment. One of the eleven tenants who filed proceedings in City Court has lacked a working stove for three years. Another has a two-year-old with asthma exacerbated by mold. A diabetic tenant couldn’t keep her insulin cold because management wouldn’t replace her refrigerator. Respondents failed to offer tenants leases at all, creating uncertainty and fear about the status of their tenancies.³⁴ These people paid rent every month into a building where the owners couldn’t be bothered to provide a lease, let alone a functioning boiler.
There is a moral argument — not just a policy argument — that people who have endured that much deserve ownership as recognition of what they have already paid, in heart and soul, in sweat and tears.
There is also a structural argument. Newburgh’s leaders regularly lament that people don’t stay — that families move on, that neighborhoods hollow out, that the city cannot hold the residents it needs to thrive. What they do not acknowledge is that they are creating the conditions that make leaving rational. Neglected infrastructure, punitive enforcement, unaffordable housing, and the constant churn of absentee ownership give residents reasons to go and few to stay. Cooperative ownership reverses that logic. When people own their homes, when their equity is rooted in a specific place and a specific community, when their neighbors are co-owners rather than fellow tenants of a distant landlord, they stay. They invest. They build. They bond. That is the opposite of what decades of neglect at Kenney inevitably produces — and it is exactly what Newburgh needs.
The Sequence Matters
The council is being asked to approve a thirty-year PILOT for a private developer before the court has ruled on the Attorney General’s Third Amended Petition, before a receiver has been appointed, before a single one of 160 violations has been cured, before the individually named respondents have answered the complaint, before SONYMA has resolved its claims, and before anyone has asked the tenants whether they want to remain renters under a new landlord or become owners of their own homes. That sequence is not an accident. A PILOT approved now locks in the deal structure. A receiver appointed later facilitates the sale. The tenants get a new landlord and a new lease. The cycle restarts.
There is another path. The council can defer the PILOT vote until the court acts on the receivership request. It can request that UHAB conduct a feasibility assessment for cooperative conversion. It can ask the Attorney General’s office whether the receivership can be structured to facilitate tenant acquisition rather than private sale. It can ask SONYMA, which is already absorbing losses, whether a cooperative conversion with LIHTC financing would better protect the state’s investment. It can ask Homes and Community Renewal whether the same financing programs Contour intends to use are available to a tenant cooperative with UHAB as technical assistance partner.
None of these steps require the council to reject the Contour proposal outright. They require only that the council not approve a thirty-year tax abatement before exploring whether the people who have lived in that building for decades — who endured the failures, who called management hundreds of times, who boiled water on electric stoves to keep their children warm — might be better served by owning their homes than by getting a new landlord.
A Council That Calls Itself Progressive
Newburgh’s city council — or at least its majority — fancies itself progressive. The ward members who vote NO on Monday will position themselves as advocates for the communities they represent, as alternatives to the extractive governance patterns that have defined this city for decades. That self-image deserves to be taken seriously. And it deserves to be challenged.
Because a genuinely progressive council, confronted with this situation, would not be choosing between YES and NO on a developer’s PILOT proposal. It would be asking an entirely different set of questions. It would be demanding to know why the city failed to enforce its own habitability laws for years while collecting PILOT payments from an owner who was simultaneously defaulting on the mortgage, the taxes, and the insurance. It would be asking the AG’s office how the city can support the receivership petition and shape its outcome toward tenant ownership rather than another private sale. It would be on the phone with UHAB. It would be asking the three individually named respondents — Kazanas, Daly, and Deignan — why they allowed over 100 low-income families and seniors to live in sewage and cold while they extracted rent and defaulted on every obligation.
Voting NO on Monday is necessary. It is not sufficient. A NO vote without an alternative is just a delay. The PILOT will come back in a different form, with a different developer, and the same basic extraction will be proposed again. The only way to break that cycle is to put a genuine alternative on the record — not as a future aspiration but as a concrete proposal with named mechanisms, identified financing sources, and a specific institutional partner ready to do the work.
The constituents of every council member — ward and at-large alike — deserve to know where each of their elected representatives stands, and why.
Progressivism is not a posture. It is not a NO vote on a bad deal. It is the willingness to reach for the solution that actually transforms the conditions producing the problem. That solution exists. It has a fifty-year track record in New York City.³⁰ It has financing mechanisms that don’t require municipal tax abatements. It has an institutional partner ready to help implement it. What it requires is a council willing to say, on the record, that the people who have suffered most in these buildings deserve to own them.
The tenants of Kenney Apartments have waited long enough. They have waited through heating seasons that left them in the cold, through an ownership that defaulted on every obligation while collecting their rent, through a management that wouldn’t return hundreds of phone calls, through a city government that enforced sidewalk geometry against working-class homeowners while looking away from sewage leaking through ceilings in an affordable housing complex. They deserve more than another transfer of ownership, another set of promises in a presentation deck, another thirty-three years of someone else profiting from the roofs over their heads while the state absorbs the losses when it all collapses again.
They deserve to own those roofs themselves.
That is what progressive governance looks like. Newburgh’s council has an opportunity on Monday night to begin moving toward it. Voting NO is the first step. Demanding the alternative is the second. The question is whether anyone on that dais is willing to take it.
“We are the generation that must throw everything into the endeavor to remake America into what we say we want it to be. Not everything that is faced can be changed, but nothing can be changed until it is faced.“
James Baldwin, “As Much Truth As One Can Bear,” The New York Times Book Review, 1962.
.
Endnotes
¹ Attorney General Letitia James, press release, “Attorney General James Takes Action to Stop Horrific Conditions in Newburgh Apartment Complex,” February 2, 2026. https://ag.ny.gov/press-release/2026/attorney-general-james-takes-action-stop-horrific-conditions-newburgh-apartment
² People of the State of New York v. Bourne & Kenney Redevelopment Company, LLC, et al., Verified Petition, Index No. EF001052-2026, Orange County Supreme Court, ¶2. Filed February 2, 2026.
³ Id., ¶13, citing City of Newburgh Code Enforcement Officer Ronald Decker, court filing dated December 19, 2025, documenting inspection of December 16, 2025.
⁴ Id., ¶8. LIHTC credits awarded in 1999; LIHTC enacted as part of the Tax Reform Act of 1986. See also ¶8, fn. 1.
⁵ N.Y. Real Property Law §235-b (implied warranty of habitability); N.Y. Multiple Dwelling Law §79 (heat requirements, Oct. 1–May 31).
⁶ City of Newburgh, Department of Code Compliance, published rental inspection standards.
⁷ City of Newburgh, “City Manager,” cityofnewburgh-ny.gov/567/City-Manager-Chief-Executive-Officer. Todd Venning appointed May 23, 2021. See also Mid Hudson News, January 2026, reporting Venning served “4½ years.”
⁸ Mid Hudson Times, March 2025, reporting: “City Manager Todd Venning serves as the city’s director of finance and chief fiscal officer.” The city was actively seeking to hire a separate comptroller at the time of publication.
⁹ People of the State of New York v. Bourne & Kenney Redevelopment Company, LLC, et al., Order to Show Cause, Index No. EF001052-2026, Orange County Supreme Court. Filed February 2, 2026. See AG press release, note 1 above.
¹⁰ People of the State of New York v. Bourne & Kenney Redevelopment Company, LLC, et al., Third Amended Verified Petition, Index No. EF001052-2026, Orange County Supreme Court. Filed February 27, 2026. Individually named respondents: Emmanuel Kazanas, J. Christopher Daly, William Deignan.
¹¹ Id. (mortgage default, property tax default, insurance default; Bank of New York as mortgage servicer; SONYMA processing mortgage insurance claims).
¹² Id. (request for appointment of temporary receiver).
¹³ Verified Petition, note 2 above, ¶15. January 2026 inspections of 66 units yielded condemnation of three units and over 160 additional violations.
¹⁴ Third Amended Verified Petition, note 10 above. New cause of action under N.Y. General Business Law §349; civil penalties of up to $5,000 per violation accruing daily after February 17, 2026.
¹⁵ Contour Housing Partners, presentation to Newburgh City Council, January 22, 2026.
¹⁶ Id. (proposed PILOT terms). See also News12 Hudson Valley, reporting approximately $3 million in tax relief over 33 years, which is consistent with the stated terms.
¹⁷ The LIHTC program was enacted as part of the Tax Reform Act of 1986. 26 U.S.C. §42. See also Verified Petition, note 2 above, ¶8, fn. 1.
¹⁸ Pennrose, LLC, pennrose.com (“over 350 developments, more than 27,000 rental housing units, and oversight of $5 billion in total development costs” since 1971). Contour Housing Partners, contourhousing.com, describes itself as leveraging “its strategic partnership with Pennrose” and cites “Pennrose’s 50-year history.”
¹⁹ News12 Hudson Valley, reporting on Kenney Apartments PILOT proposal: “the new company would also take over the nearby Bourne Apartments.”
²⁰ News12 Hudson Valley, reporting on Warden Circle/Heights ADA compliance violations, $250/day fines. Resident Dan O’Leary cited costs of “$15,000 or $20,000.”
²¹ Third Amended Verified Petition, note 10 above (all claims in this paragraph).
²² N.Y. Real Property Actions and Proceedings Law, Article 7-A (appointment of administrator for buildings with conditions dangerous to life, health, or safety).
²³ Verified Petition, note 2 above, ¶15 (three units condemned).
²⁴ N.Y. Executive Law §382(2) (Property Maintenance Code penalties up to $1,000/day). City of Newburgh Code of Ordinances (local penalties of $250/day per violation).
²⁵ Councilwoman Tamika Stewart, public statement, January 2026, requesting emergency boiler repairs billed to landlord. See also AG press release, note 1 above (Stewart quote).
²⁶ AG press release, note 1 above. Councilmember-at-Large Robert McLymore: “After learning what our seniors and families were living through, I met with residents, visited their apartments, and worked alongside City staff as we pressed ownership to correct these conditions. When management stopped responding and these conditions persisted, I contacted the New York State Attorney General’s office to escalate the matter.”
²⁷ City of Newburgh Charter, Article VI, §C6.10: “The Corporation Counsel shall be appointed by the City Manager.” See also City of Newburgh, Departments page, cityofnewburgh-ny.gov/35/Departments: “The Corporation Counsel is appointed by the City Manager to act as the legal advisor of the City Council, of the City Manager and of the several officers, departments, bureaus, and boards of the City.”
²⁸ City of Newburgh Charter, Article V (City Manager as Chief Executive Officer, vested with “all executive authority to operate the City”). See also cityofnewburgh-ny.gov/27/Government: “the City Manager is the full-time Chief Executive Officer appointed by the Council and vested with all executive authority to operate the City, subject to Council oversight.” City Manager “appoints and removes the heads of all departments.” cityofnewburgh-ny.gov/567/City-Manager-Chief-Executive-Officer.
²⁹ N.Y. Private Housing Finance Law, Article XI (Housing Development Fund Companies).
³⁰ UHAB National, uhab.org: “over 1,300 limited-equity housing co-ops totaling over 30,000 homes for more than 50 years.”
³¹ NYC Department of Housing Preservation and Development, Tenant Interim Lease (TIL) program, adopted 1978.
³² Verified Petition, note 2 above, ¶1 (restitution sought for breach of implied warranty of habitability, N.Y. Real Property Law §235-b).
³³ Verified Petition, note 2 above, ¶22. Wilhelmina Lamb, 27-year resident: “Some people are scared to open their mouths for fear of being thrown out of here, but I’m not afraid. We’re all just looking for respect.”
³⁴ Verified Petition, note 2 above, ¶¶18–20 (eleven tenants filed RPAPL Article 7-D proceedings in Newburgh City Court, January 2026; conditions described include: three-year broken stove, two-year-old with asthma exacerbated by mold, diabetic tenant with broken refrigerator, failure to offer leases).
