The Facts About Nassau Gardens Market Rate Conversion

Last May, President Mullinex sent a letter to Shareowners with her opinions/recollections regarding two efforts to convert Nassau Gardens from a limited equity to market rate Cooperative, in the 1990s and early 2000s. Shareowners have twice voted overwhelmingly for conversion. The opinions in her letter are not held by most Shareowners and previous officers, and contain significant disinformation.

Most importantly, Ms. Mullinex wrote of the 2002-4 effort to convert, "It was determined overwhelmingly that the membership was not interested in converting to market rate."

NOT TRUE: In the Market Rate Committee's June 14, 2004 report to the Board, co-chairs Kent Lawson and Pegg Mullinex (yes, the same her!) reported 78% of those contacted were in favor of Market Rate and only 5% were opposed (above). Exactly the opposite of what she wrote you last year!  This was an extensive, in-depth, well-managed straw poll with home meetings, phone interviews, etc. Yes, many Shareowners did not actively participate, but that was because we had already been through the process in the 1990s (when over 2/3 voted to convert in a binding special meeting) and knew the 2004 committee's work was more informational for new members, and not binding.

Ms. Mullinex wrote last year that the value of "market rate would bring $30 to $50 thousand. It could, of course go for a good deal more, maybe as high as $100,000."

FACT: I asked Donna Duggan, a highly experienced Realtor from McNulty Realty in Norwood, to do an appraisal of our property this week. Her report stated "a good listing price range would be between $150-$165,000 for a 2 bedroom. For a 1 bedroom unit, I recommend -$20,000 and to increase it $20,000 for a 3 bedroom."

Ms. Mullinex wrote the market rate conversion process ended in 2004 in part because "they did not send the vote to the Secretary of the Commonwealth."

THEY? It is the responsibility of the President and Clerk to sign and submit the form (it's strictly procedural), not some anonymous "they" as she wrote. Of course Ms. Mullinex never filed the form; she does not want market rate. Cost is only $15. See the state's form here: http://www.sec.state.ma.us/cor/corpdf/180amen.pdf

Ms. Mullinex's statements about HUD not allowing us the use of Cooperative funds for conversion are technically correct, but were limited to an earlier time period, not now or the past few years.

FACT: That was when our HUD HAP contract was in effect (Section 8 renters subsidized by HUD). When that contract ended, that financial limitation also ended, but the Board failed to subsequently pursue conversion. It would have been no problem to use our own funds after the contract ended. Jim Polito, our account manager at HUD, wrote me April 14, 2009 (in government-speak) that "Without the use of the [Cooperative's] Replacement Reserve [fund], in a development that is [now] unsubsidized, it is not clear what role the government can exercise here." It's moot today with HUD out; we can use our own funds -- which we have from refinancing -- to cover market rate conversion costs.

Ms. Mullinex repeatedly writes about how converting to market rate would change our Cooperative 'culture' and "we would no longer be a unified limited equity Cooperative" and "We are the best deal in town and will remain so as long as we are a limited equity cooperative."

Other Opinions: In 2002, former President and then Market Rate Committee Chairman George Hildebrandt wrote an informational letter to all Shareowners stating "the day-to-day operation of a Limited Equity and Market Rate co-op is identical." As to 'how good a deal' we are today, we're better off than an apartment renter, but that's about all.

Ms. Mullinex refers to animosity, resignations, hurt friendships, etc. over past conversion efforts.

That goes on all the time here and is to be expected when Directors pursue their personal agendas rather than the Cooperative good. Remember the dueling newsletters from different Board factions as recently as last year, under Ms. Mullinex's administration?

Ms. Mullinex wrote "we have neither the time nor the money to research this [conversion] fact and any additional legal expense would have to be voted by the Board."

Well, let's elect some new directors who will find the time ... Directors who are enablers rather than blockers like her who look for excuses not to improve our Cooperative and Shareowner value.

And if our Board can find the Cooperative funds to seek a legal opinion to not evict a person whom they knew lived here for many years as a prohibited subletter (a Director's son, no less!), hopefully a new President will find some more of those funds to realize our equity.

Final point: There are 6,400 housing coops with 1,200,000 units in the U.S., according to the National Co-Operative Business Association. Ten percent are HUD insured/assisted no or limited equity units (not us any more). Discounting those HUD units, 277,000 other units (27%) are limited equity; the other 765,000 (73%) units are market rate. So Nassau Gardens shareowners are not just in the vast minority, we are the poor vast minority.