Gotham Gazette

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After Years of Community Organizing, Nonprofits Now Get Much-Needed Relief from Dangerous Tax Lien Sale

596 acres empty lot

Nonprofits have a lot less to fear now as a new law takes effect (photo: @596Acres)

Our interconnectedness has rarely been more pronounced than it is in this moment. The fact that we can take so many of our life-sustaining connections into the digital sphere is an unprecedented miracle. But if you’re missing New York’s places of physical gathering, where many of those connections were first forged, you’re not alone.

At its core, New York is a city of communities precisely because of its bounty of gathering places. As we reflect on the ones we miss, that we hope to return to as soon as possible, we can celebrate a new law that goes into effect today - Friday, March 27 - that will protect some of them.

In 2014, attorney Paula Segal, founder and then director of 596 Acres, the community land access advocacy nonprofit, got a call from community gardeners in Crown Heights, Brooklyn. They were distressed. They had continuously grown food and flowers and found solace on a patch of earth in their neighborhood since 1979. Now the land was in peril.

Unpaid tax debt on the nonprofit garden would soon be sold as a lien to a private investor-backed trust via the city’s tax lien sale. If left unpaid, the debt could lead to the trust initiating foreclosure. Gardeners were planning their first-ever bake sale to pay off the taxes, and they weren’t sure if it would be enough to keep the garden from disappearing.

Taking on the case as an attorney, Paula helped this Crown Heights garden get out of the tax lien sale and into the hands of Brooklyn Queens Land Trust (BQLT), a network of community gardens that, together, have bigger administrative capacity. BQLT raised money, paid the bills, and ensured that the garden would get the nonprofit tax exemptions entitled to it going forward. But the problem wasn’t over.

Soon after, Paula got a call from elders at a second garden having the same problem. Then a mosque, a community center, a synagogue, a theater, a choir hall, a church, and it went on. Each nonprofit-owned place was enduring a nightmarish situation of its own due to the same government practice: the New York City Department of Finance tax lien sale. Paula turned to the public data to understand the scope of the problem.

It is well known that nonprofits are exempt from paying property taxes in New York State. Less well known is the tax lien sale process. The tax lien sale in New York City started in 1996. Through it, each year the Department of Finance (DOF) bundles all the outstanding bills --unpaid taxes, water and sewer bills -- and sells the whole bunch to a private investment fund as liens, which is the right to enforce debt through collection and foreclosure. Wealthy individuals and corporations alone can buy into the fund to grow their wealth.

Through the sale, the city government gets paid 72 cents for every dollar of debt and private investors get triple-A investments plus the right to charge interest, collect debt, and initiate foreclosure leading to sale of these properties at auction to the highest bidder. Unfortunately, this sale routinely and mistakenly included nonprofits entitled to tax exemptions. At auction, these nonprofit-owned properties could be sold to anyone.

We know 300 nonprofits had debt sold by the city to the investment trust because advocates painstakingly went through the public data. Every year since Paula first got that call from the Crown Heights garden, it was like a bell would ring 90 days ahead of the sale, and staff from advocacy organizations, with help from volunteers, would begin to dig through the DOF’s spreadsheets, separating out the charities, hunting down their contact information, and reaching out by any and all means. Dreaded phone calls went something like: ‘Um, hi, you don’t know me, but your lovely theater might be at risk of foreclosure? Here’s who to call and what to do to get off the list.’

At first, advocates would whittle DOF’s lists (both sold and to-be-sold lists) down to all properties not classified as residential or utilities, then compare what remained to property ownership records to find which were charities and to locate contact information. In 2017, in response to advocates' requests, the City Council mandated that DOF publish a list specifically of the charities headed to each year’s lien sale. But these lists left out the owners’ names, so advocates still had to hunt those down in order to get in touch.

At the same time, 596 Acres set other strategies into motion: publicizing maps of all the nonprofits at risk in past and current years, meeting with City Council members, hosting events that brought together DOF staff with the leaders of at-risk nonprofits, creating guides for nonprofits to navigate the process, working with the DOF’s newly-minted taxpayer advocate so they would be prepared to assist nonprofits, and coordinating press pieces.

TakeRoot Justice and 596 Acres organized the impacted nonprofits and their supporters into the Protect Our Places Coalition, which had meetings and rallies on the steps of City Hall each year. At these rallies, leaders of impacted organizations would speak, often in conjunction with opportunities to testify before the City Council on the new bill, known as Intro. 245, that the coalition was working on to stop the problem. Paula had joined TakeRoot Justice as a staff attorney in early 2017.

After roughly six years of work and legislative wrangling, Intro. 245 was finally passed on February 27, 2020, and thankfully goes into effect today. The Protect Our Places Coalition had a final gathering on the steps of City Hall that February day, celebrating with speeches and music, and expressing gratitude for all who came together to correct this injustice, including the elected officials who truly can be the people’s lawmaking champions.

Organizations contributed to this winning campaign from far reaches of New York City: from Brooklyn, 1100 Bergen Street Community Garden in Crown Heights, Masjid Al Aman in East New York, and Devoe Baptist Church in Williamsburg; from Queens’ Merrick Marsden Community Garden in Jamaica, Haven Ministries in Far Rockaway and Al Muneer Foundation in Hollis; from the Bronx, Mary Mitchell Center in Crotona; from Manhattan, Hebrew Actors’ Foundation in the Lower East Side; and many others. These groups advocated tirelessly for the survival of their own spaces. Doing so together, they connected the dots between their individual nightmares to push for system-level change.

Aligned technical assistance and umbrella organizations contributed by supporting at-risk organizations in their networks, connecting organizations to city officials, and helping draft legislation. Elected advocates helped individual nonprofits in their districts while championing the new law, led by City Council Member Antonio Reynoso and members of the Council’s Progressive Caucus.

Today’s victory is a chance to reflect on how individual struggles against bureaucratic practices can be scaled up to make legislative change, with the help of many advocates. It’s a moment to gain inspiration from a winning campaign that moved from case-by-case problem solving to big-picture change by considering the elements that led to its success, including persisting on the path year after year.

It is also a moment to appreciate the belief at the heart of the work: small charity organizations across our city provide neighbors with invaluable services in decentralized, locally-relevant ways. The city should support their capacity to own, develop, and operate property that provides for their neighbors and that becomes the setting where we form strong connections to one another. Our connections are essential for our resilience. Even as we continue this work from home, our networks have never been more important than they are today.

Mara Kravitz was an organizer with the Protect Our Places Coalition between 2016 and 2020, working for 596 Acres and TakeRoot Justice.

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