It took deceit on a grand scale for Greenwich builder Richard P. Harris to be selected by the Greenburgh Town Board for the WestHELP housing complex’s $25.7 million lease.
Harris was unknown to the Westchester affordable housing world in November when he submitted a proposal with his purported partner, The Richman Organization, to lease the 108-unit WestHELP complex for 18 years. By late April, his company, Group MRH, LLC, was selected unanimously by the Greenburgh Town Board for the lease. Harris estimated $8 million of the revenue would flow over 18 years to his company in a lease now being drafted by the town of Greenburgh.
But the documentation Harris submitted to the town, and correspondence between Harris and Richman, detail a proposal centered on Harris’ non-existent relationship with one of the nation’s leading housing organizations.
Despite revelations about Harris’ fraudulent submission, Town Supervisor Paul Feiner continues to push the deal. Feiner says the contract is on “the fastest possible track.”
“We have made a commitment to affordable housing, and I’ve put it on the fastest track possible,” Feiner said on May 3. “If the county tries stopping it, we’ll go to the federal monitor. We are going to play hardball. We will litigate. We want to get the contract in place quickly.”
Throughout the process, Harris represented numerous times that he was affiliated with the Richman Organization, a group of companies based in Greenwich that’s among the nation’s top housing organizations. He needed the Richman partnership to give him legitimacy in the competition with several reputable Westchester affordable housing firms: Westhab, Community Housing Innovations, and Marathon Development Group. Harris has no experience in the affordable housing field.
The deceit was laid bare in a May 2 letter from Richman legal counsel Joanne Flanagan to Harris, which declared Richman was never in business with Harris and did not intend to work with him and Group MRH at WestHELP.
Lucian Chalfen, a spokesman for Westchester County District Attorney Janet Deiform, said the county prosecutor was looking into the matter.
“We are aware of and are reviewing the situation,” he said Monday.
A glimpse at the documents submitted by Harris for Group MRH, LLC reveal the depth of his misrepresentation. They were submitted for the town of Greenburgh’s request-for-proposals to operate the complex, with 108 efficiency apartments and a 14,000-square-foot administration building on the grounds of Westchester Community College.
A resume for “Group MRH, LCC & The Richman Organization” states that the duo was one of the nation’s leading investors in affordable housing, had spent more than $10 billion in more than 1,300 locations, and planned to invest $950 million in 2012.
Harris detailed what he claimed to be his business relationship with Richman in his Nov. 20, 2012 proposal to the town, in which he said Richman was his “partner” in the project. Back then, MRH Group-Richman would give the town $100,000 a year and need permission to build six additional apartments in the WestHELP administrative building.
A revised proposal on April 26, 2013 also stated that Richman was his “partner,” and would receive $120,000 a year to manage the complex’s affordable-housing compliance. The revised plan scrapped the six new income-producing units while quintupling the annual payment to Greenburgh to $500,000.
“The Richman Group will help us to manage the affordable housing paperwork and yearly compliance reports at this property,” Harris wrote, just four days before winning the lease.
Helping seal the deal for Harris was an April 27 letter sent to Greenburgh Town Attorney Tim Lewis, which was signed by Peter McHugh, vice president of The Richman Group Affordable Housing Corporation. It stated that Richman had been asked to provide property management and tenant compliance at WestHELP. Richman looked forward to working with the development team in Westchester, the letter stated.
Yet a Tax Watch interview with Harris, and a “cease-and-desist” letter from Richman to Harris, shows that any representation he made about Richman being his partner was part of the deception. In an interview at the marble-topped kitchen table in his Greenwich kitchen, Harris told Tax Watch that he’d had conversations with Richman about syndicating tax credits to finance the renovation of the WestHELP apartments, only to learn that a lease for 18 years was too short for the tax-credit program.
Harris acknowledged he’d never spoken with the Richman company that manages affordable housing projects, which would perform the compliance work he stated would be done by the company.
It turns out the partnership Harris touted in the resume and WestHELP proposal was conjured up from meetings he had held with Richman officials that never led to any deal.
Here’s how Harris characterized his relationship to the Richman housing organization.
Town Supervisor Paul Feiner has put great weight on the April 27 letter submitted to the town from Peter McHugh, vice president of The Richman Group Affordable Housing Corporation, which states Richman looked forward to working on the project on property management and tenant compliance. However, this Richman affiliate syndicates tax credits, and does not perform property management services. McHugh has not returned numerous phone messages, asking whether he actually wrote the letter.
Group MRH was unanimously awarded the contract on April 30, with Supervisor Feiner touting Group MRH’s relationship to Richman in a press release.
But on May 2, Harris received a sternly written letter from Richman counsel Joanne Flanagan, demanding that he “cease and desist” from saying that any Richman company was his partner or consultant on the WestHELP project. A copy was sent to Greenburgh Town Attorney Tim Lewis
Flanagan wrote that Richman’s involvement was limited to a “preliminary discussion” with McHugh on the tax-credits.
“We have received several press releases concerning the Project identifying our clients as your partner,” Flanagan wrote. “This is totally false and we demand that you correct this erroneous information.”
The selection of Group MRH, LLC has stirred considerable opposition, with leaders of the Edgemont Community Council leading the criticism. The Council on May 6 passed a resolution calling on the town to reconsider its decision and to rebid the contract.
ECC member Robert Bernstein has suggested that the April 27 letter from McHugh was a fake. Much of the text from the letter was similar to the text in the false resume submitted in November. It states that McHugh had known Harris and Group MRH for more than 10 years. But Group MRH was only incorporated in 2011.
“Harris was leveraging a false relationship with Richman to get a lease for himself,” Bernstein said. “It was very fishy.”
Bernstein, an attorney, said it was unlawful to make false representations to a government agency for the purposes of obtaining a government contract. He also maintained that Harris, whose offices are in his Connecticut home, may have violated federal law by devising a scheme for obtaining money by using “false or fraudulent pretenses, representations or promises” that uses wire communications across state lines.
“The public is getting ripped off,” Bernstein said. “The taxpayers have bought and paid for that housing. And the guy the town wants to run WestHELP has no public credentials that anyone can rely on. The only way for this to get settled is to have law enforcement investigate.”
Herbert Hadad, a spokesman for US Justice Department in White Plains, said the office had no comment.
That office is involved in the contentious enforcement of the 2009 consent order in the federal fair-housing case, in which Westchester agreed to build 750 units of affordable housing in 31 communities, and promote fair housing countywide.
The WestHELP apartments, which are owned by Westchester County, are under the town of Greenburgh’s control through 2032, as long as the town rents them to low- and moderate-income tenants. The town and County Executive Rob Astorino had promoted a plan that would have demolished the apartments so that a for-profit school for developmentally disabled students, Ferncliff Manor for the Retarded, could build a residential school there.
Last week, Astorino spokeswoman Donna Greene said Astorino still preferred the Ferncliff plan. She declined comment on questions surrounding Group MRH’s selection by the town.
Despite Richman’s letter to Harris, which disavowed any relationship with him, Supervisor Feiner continues to maintain that Harris has made no misrepresentations to the town. Feiner and I have had several exchanges on my Facebook page regarding this issue. The most recent came on May 10, when Feiner posted Harris’ responses from his April 26 submission to the town board. Stated Feiner: “No misrepresentations were made.”Yet in that document, Harris states that Richman will be handling the project’s “affordable housing paperwork and yearly compliance reports.” And since May 3, Feiner has had the letter from Richman, stating that Group MRH has never had a relationship with Richman, and has no such plans for the future.
On Friday, Feiner reached out to my Facebook friends, several of whom had become interested in the issue, and were discussing it on the social media site.
“I would be more than willing to share other email correspondence and letters between the town and MRH and the other bidders of the property with readers of David Wilson’s facebook page,” Feiner wrote. “This might provide you with a better appreciation of the seriousness of the MRH proposal and the process we used prior to making the selection. My cell phone is 438 1343, my office is 993 1545. my email is email@example.com. I would be happy to meet anyone to discuss the correspondence, process we used and the reasons for our decision.”
I responded that I’d like to read the correspondence. We set up a meeting at 11 a.m. Monday in his office. But later on Friday, he cancelled the appointment, noting that town department heads needed time to pull together the paperwork. He suggested we meet later this week. I’m still waiting for set up the appointment.
Photos by David McKay Wilson.
1. Richard Harris, in his Greenwich kitchen.
2. The Richman Group of Companies headquarters, Greenwich, Ct.
3. The gates at WestHELP have remained padlocked by the town of Greenburgh since October, 2011.
4. Barbed wire is strung around the perimeter of the complex which housed homeless single mothers and their preschool children.
5. Greenburgh Town Supervisor Paul Feiner, center, leads discussion on WestHELP at Town Hall. To his right is Marie Smith, president, Mayfair Knollwood Civic Association; Count Legislator Michael Smith, and Town Attorney Tim Lewis.To Feiner’s left is Alec Roberts, executive director, Community Housing Innovations.
6. Edgemont civic leader Robert Bernstein, center, addresses the county Board of Legislators. To his left is Jim Cavanaugh, lobbyist for Ferncliff Manor. At left is Mel Tanzman, executive director, Westchester Disabled on the Move.