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Public Housing’s Federal Monitor Presented a $20 Million Bill

Housing Secretary Ben Carson announces a deal with Mayor Bill de Blasio to have a new federal monitor overseeing NYCHA, Jan. 31, 2019.
NYCHA federal monitor Bart Schwartz. Photo: Britney Anne Majure/NYCHAMonitor.com

The Housing Authority’s new federal monitor initially proposed a first-year budget of nearly $20 million with little explanation of how all that taxpayer money would be spent, THE CITY has learned.

Bart Schwartz — who released his first report Monday — has brought in an extensive team of 19 employees from his firm, Guidepost Solutions. He’s also recruited seven third-party experts, two consultant companies and the head of the Manhattan Democratic Committee for his “city expertise.”

Five months after his appointment, however, Schwartz has yet to officially inform taxpayers how big of a check they’ll be writing.

Bart Schwartz
Housing Secretary Ben Carson announces a deal with Mayor Bill de Blasio in January to have a federal monitor. Photo: Ben Fractenberg/THE CITY

Sources familiar with the internal discussions about Schwartz’s plans say he submitted a request  last month for almost $20 million for his first year to the U.S. Department of Housing & Urban Development (HUD) and Manhattan U.S. Attorney’s office.

He provided a brief document with a barebones explanation and few specifics on how the money would be spent, the sources said. The federal agencies returned it to him with instructions to provide a more extensive breakdown of his planned expenses.

Since then, he’s come back to HUD and federal prosecutors with a far more detailed proposal, the sources said. But to date no budget has been publicly revealed and no contract has been submitted to the city comptroller to be registered. The final estimated cost remains a mystery.

Schwartz also has yet to provide City Hall with any details on his spending plan. Mayor Bill de Blasio agreed as part of a deal worked out in January that the city — not NYCHA — would foot the bill for the federal monitor and his team.

None of the governmental agencies that must sign off on Schwartz’s budget — the U.S. Attorney, HUD and City Hall — would comment. Montieth Illingworth, a spokesperson for Schwartz, also declined comment.

Could Pay for Elevators and More

A budget of $20 million would cover the cost of installing seven new boilers at Brooklyn’s Marcy Houses or replacing all 49 elevators in the sprawling Queensbridge North Houses in Long Island City.

Both of these planned projects are on hold because Gov. Andrew Cuomo has yet to release more than $450 million in promised state funds for NYCHA boiler and elevator fixes.

The Queensbridge Houses, May 14, 2019.
The Queensbridge Houses, May 14, 2019. Photo: Ben Fractenberg/THE CITY

Schwartz’s behind-the-scenes budget dance takes place as Gregory Russ, the new $403,000-a-year NYCHA chairperson is set to arrive next month and as the authority struggles to clean up lead paint from apartments where children live. NYCHA, home to 400,000 New Yorkers, is in need of an estimated $32 billion in repairs.

The monitor’s report released Monday noted that despite NYCHA’s promises, more than 1,500 apartments targeted for cleanup still have not been declared “clear” of lead. At least 18 more children tested for high levels of lead in their blood, the report says.

Schwartz was appointed to settle a lawsuit filed last year by Manhattan U.S. Attorney Geoffrey Berman that documented how NYCHA managers for years covered-up unhealthy, unsafe apartment conditions such as lead paint, toxic mold and faulty elevators.

The monitor began work Feb. 28 and promised to provide City Hall with a detailed budget. But he kept delaying, and ultimately said he first needed to submit his plan to the Manhattan U.S. attorney, according to internal emails obtained by THE CITY.

On March 11, city Law Department staffers began requesting a budget from Anthony Colura, the chief financial officer of Schwartz’s firm, Guidepost Solutions. Collura initially promised a budget “within the next two weeks,” the emails show.

Minneapolis Public Housing Authority leader Gregory Russ is set to lead NYCHA.
Minneapolis Public Housing Authority leader Gregory Russ is set to lead NYCHA. Photo: Minneapolis Public Housing Authority

That date came and went. On April 4, Georgia Pestana, chief of staff to Corporation Counsel Zachary Carter, asked again, this time stating city budget deadlines were fast approaching that required the Law Department to spell out its annual expenses.

Collura again promised he would come through by the week’s end. Soon after, that changed to the “end of the month.”

That came and went, and by May 23, Department of Law staffer Ashley Iodice wrote: “I was told today that our window to add your figures to our budget is rapidly closing. We need to get this information from you this week if possible.”

Iodice got no response, so she tried again the next day, noting what she described as “the time crunch.”

That’s when another Guidepost executive revealed the Manhattan U.S. Attorney’s Office was reviewing the budget, and promised to come through after they finished their analysis in a few days. That deadline passed, and on May 29, City Hall made one last plea:

“We need to submit to [the Office of Management and Budget] today,” Iodice wrote. “Any update?”

She got no response.

A Growing Lineup

Sources familiar with the matter say, since then, City Hall has been speaking with federal prosecutors who expressed some concerns about the amount of money Schwartz says he needs and the lack of specificity about how he intends to spend it.

The final bill is likely to be significant, given the long list of lawyers, investigators and various experts Schwartz has already brought in. Besides himself and 19 of his Guidepost colleagues, he’s hired a former Bloomberg-era deputy mayor, Anthony Coles, as an outside counsel.

He’s also retained the services of ex-Harlem Assemblymember Keith Wright, the current head of the Manhattan Democratic Committee and a registered lobbyist with Davidoff Hutcher Citron LLP. Wright’s job description is listed in Schwartz’s report as “governmental communications and city expertise.”

“Mr. Wright will be an important asset to the Monitor in his overall and on-going communications with the community, city and state leaders on matters relating to NYCHA’s compliance with the Agreement,” the report states.

Schwartz also has hired David Jacobs, a nationally known expert on lead paint; Carl Bornstein, a former inspector general of the city School Construction Authority: and two consultant firms, the U.K.-based Turner & Townsend and the New York-based Newmark-Knight, to provide construction manager advice.

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