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THE BANK COMES CALLING -- Boston bank
foreclosing
on veterans' shelter. Other local bankers are
"shocked and appalled" at the decision.
Story here...
http://www.boston.com/
business/globe/articles/2007/07
/11/the_bank_comes_calling/
Story below:
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The bank comes
calling
By Steve Bailey, Globe Columnist
Kevin Cohee has set the bar very high for himself and his institution.
The up-by-the-bootstraps chief executive of OneUnited Bank took a small
struggling Boston bank, and through a series of aggressive mergers,
turned it into the nation's second-largest black-owned bank. But his
ultimate goal is more than to build just another bank. "You talk about
the turnaround of a company. We're trying to turn around a whole race,"
Cohee told Time magazine last year.
Last month Cohee made a splash on this page when he talked about plans
to open up to five new branches in Boston neighborhoods this year and
eventually dozens in other cities. While OneUnited has spent most of its
time trying to build a national franchise through Internet banking,
Cohee said he wants his company to be known as a Boston institution.
"You don't get any more Boston than us," he told the Globe.
What Cohee and his Boston institution are not interested in talking
about at all is why they are playing such hardball with a shelter for
the mentally disabled in Roxbury. Cohee, orphaned at the age of 8, has
always been known to play to win, but this is a bit much even for him:
threatening to foreclose on a shelter for the disabled over what amounts
to small change.
In April the bank filed a foreclosure notice against the Roxbury
Veterans Housing Limited Partnership, which operated Highland House in
two tired townhouses on Warren Street. It scheduled an auction for May
15, which has been postponed to at least Aug. 14 after agreement among
the bank, the city, the state, and other investors, according to court
documents. I have spent three weeks trying to get OneUnited to explain
its decision.
"We are giving them time to work out their problems," Joseph A. Gordon,
an outside attorney for OneUnited, finally told me yesterday, referring
to the nonprofit operator. But why the foreclosure action? "That is up
to the bank to answer."
The bank declines to answer. But others involved in trying to rescue
Highland House say the bank moved after the nonprofit operator failed to
file audited financials, putting it into technical default. The
operator, which is affiliated with the Veterans Benefits Clearinghouse,
a provider of services for Vietnam veterans, has problems and needs to
be replaced. (The state Department of Mental Health, for instance,
pulled 14 residents out of the shelter because of recurring issues.) But
the money at stake is small: The original loan was for $115,500, or
$343,000, all interest and late charges included, court papers show.
Jeffrey Goldstein, chief operating officer of Boston Capital Corp., the
deep-pocketed affordable-housing investment firm that was an original
investor in Highland House, says he is "shocked and appalled" by
OneUnited's threats to foreclose. The bank's actions, he said, show it
has "no interest in solving this issue and resolving the critical issue
of housing for some of the neediest in our population."
In a foreclosure, the bank is likely to come out whole. But the city and
the state have about $300,000 each at risk, and Boston Capital says it
still has some nominal amount in tax credits on the line. Reginald
Nunnally, an adviser with the city's Department of Neighborhood
Development, said he is optimistic that a new operator can be found and
the situation resolved. He estimates it will take only $15,000 to make
minor repairs and save the place for the kind of single-room occupancy
the neighborhood badly needs.
Nunnally hopes to meet with OneUnited next week to see what role, if
any, the bank plans to play in Highland House in the future. Here is
hoping he has more luck with OneUnited than I did. For a bank that wants
to become a Boston institution, it is a strange way to behave, indeed.
Steve Bailey is a Globe columnist. He can be reached at
bailey@globe.com or at
617-929-2902.
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Larry Scott --
