Home Banking & Finance Mount Vernon Urban Renewal Agency sued over low-income housing loan

Mount Vernon Urban Renewal Agency sued over low-income housing loan

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An Elmsford firm has sued the Mount Vernon Urban Renewal Agency for allegedly not honoring terms of a loan for a low-income housing project.

In 2014, the Urban Renewal Agency loaned $345,200 to Mt. Vernon Associates LP to help renovate the 76-unit Greencourt Apartments at 284 S. Columbus Ave. The agency agreed to subordinate its mortgage to any institutional mortgage on the property.

Mt. Vernon Associates then refinanced an underlying mortgage with KeyBank for nearly $3 million, and the URA granted primary loan status to the bank.

The KeyBank loan has matured and Mt. Vernon Associates has arranged for a new loan to refinance the KeyBank loan.

But the Urban Renewal Agency, according to the lawsuit filed on March 23 in state Supreme Court in White Plains, has not responded to several requests to subordinate its loan to a new mortgage.

Mt. Vernon Associates managing partner, John V. Saraceno, sent five emails to Maria Donovan, special assistant to Mayor Richard Thomas, and met with Danielle Scholar, deputy director of the Urban Renewal Agency, asking for the agreement. So far, the lawsuit states, he has received no responses.

The KeyBank mortgage is in default and has incurred a 4 percent penalty.

“The current situation is untenable,” Saraceno’s attorney, Daniel D. Tartaglia, wrote in a March 21 letter to the agency. “Mt. Vernon Associates has and will continue to suffer irreparable injury if the subordination agreement is not signed immediately.”

Donovan said that the city does not comment on pending litigation.

Mt. Vernon Associates is asking the court to compel the Urban Renewal Agency to give it a subordination agreement.

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