E.D.E.N.'s PRIVATE HOSPITAL property tax exemption scam

Submitted by mabeldog on Fri, 03/10/2017 - 14:59.
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Flush with a "loan" of $889,000 she scored in January from the Community Development Department of the city of Cleveland (whose funding is soon to be eliminated by President Trump's proposed HUD budget cuts), the Emerald Development "Economic" Network's director Elaine Collins (earning over $200,000 per year in salary and benefits) was sitting in the catbird seat. In March she snapped up an office building at 2070 W. 117th Street in Lakewood from the Latter Day Saints for $350,000 which WAS paying $15,000 per year in property taxes, but will soon be added to the over 100 properties EDEN owns classified fraudulently as Private Hospitals. And the $15,000 Cuyahoga County WAS collecting on the building will be eliminated. Enquiring minds want to know. HOW is EDEN getting away with cheating the impoverished school children of Cleveland out of millions and millions of dollars in property taxes? EDEN does NOT operate hospitals. Or group homes. Or nursing homes. Or drug rehabs. They do not pay any medical staff, drug counselors or social workers. They do not have community meals or job training. They funnel federal HUD funds into their bank accounts TOTALLY free of ANY taxes. AND free of ANY responsibilities. NONE of the "private hospitals" EDEN owns provide ANY kind of services for their tenants. 99% of their budget of $27 million comes directly from HUD in the former of a variety of very lucrative Section 8 vouchers. In SHARP CONTRAST our WORLD RENOWNED Cleveland Orchestra has a budget of $50 million dollars and with that they have a staff of 200 people including some of the best musicians in the world. EDEN also gets "loans" from the city of Cleveland and the state of Ohio Department Mental Health and Addiction Services, which do not have any repayment schedule attached to the loans.They employ 55 people at their main office at 7812 Madison who all process paperwork to keep those federal funds flowing. They were clearly very confident that their fraud would NOT be exposed. And why not? They had been getting away with it for MORE THAN TWENTY YEARS. After all on their Schedule A from the IRS 990 from 2014, where they checked off the reasons for PUBLIC CHARITY STATUS, the ONLY box checked off is Box 7 "an organization that normally receives a substantial part of its support from a GOVERNMENTAL UNIT" They do NOT check off box 3 "a hospital or co-operative hospital service" ONLY BOX 7. Also their recently amended articles of incorporation filed with the Secretary of State in April 2014 describe their services as providing "housing and housing related services and opportunities to low-income, mentally ill and disabled persons...and the administration of financial and other types of housing services."In other words EDEN "assists" their tenants to troll for as much free goobermint money as they can get. Nothing whatsoever about providing any on site mental health services. 

And what about the chain of 10 Heroin Hotels run jointly by EDEN and Cleveland Housing Network which are filled with active drug users getting high and living large at the taxpayers expense? How exactly do those obscenely expensive homeless shelters where EDEN collects $600 per unit from SSI and HUD, qualify as property tax EXEMPT private hospitals. The tenants are not even required to be sober.

Let's compare those drug infested crime dens called "private hospitals" to the apartment complex run by Mt. Sinai Baptist church at 7600 Woodland. Their articles of incorporation through the Secretary of State are "to provide elderly or disabled persons housing facilities and SERVICES DESIGNED TO MEET THEIR PHYSICAL, SOCIAL AND PSYCHOLOGICAL NEEDS". That sounds MUCH MORE like a private hospital. But Mt. Sinai pays $74,984.40 in property taxes. And they are paid up for the whole year.

So where DID it all start? Through a partnership of two enterprising gals who were experts on gaming the system. On March 2, 1992 the Executive Director of Aftercare Residential Services, Wendy DiGregorio transferred a portfolio of 11 properties to the newly established Emerald Development Economic Network's founding director Kathryn Kazol. EDEN got the buildings for FREE but even BETTER, the "private hospital" designation which was attached to the 11 properties was carried right over to EDEN too. F.Y.I. Aftercare Residential was one of many non profits set up in the late 1970's and early 1980's to provide group homes for the mentally challenged adults released when the state mental hospitals closed. Their articles of incorporation filed with the Secretary of State on January 3, 1978 stated exactly that. "To provide a mental health service and ....to provide suitable housing for persons discharged from psychiatric hospitals." With a wink and a nod, and of course no follow up from the Cuyahoga County Fiscal Office, Kathryn Kazol started accumulating "private hospitals" at break neck speed. With free money from every possible government entity from local to HUD.  The "EDEN-owned Scattered Site Housing" is where ALL the private hospitals, with the exception of the Heroin Hotels, are hidden. And the waiting list is permanently closed. PERMANENTLY. No one ever moves out?? OR DIES?? Really?? OR is it something else? Are they FINALLY getting nervous perhaps?  Would Director Collins rather leave those vacant units in the "hospitals" vacant. Rather than be exposed.

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Potential resolution to real estate tax avoidance by E.D.E.N. ?

As I understand it, the City of Cleveland provides 15 year real estate tax avoidance (non-free market tax waiver purported to induce development which, in 15 years, will purportedly add to public tax revenues) to all the new condo's - increasing the developer's profits, skewing the free market to the disadvantage of sales of existing homes, and forcing the City's historic tax payers to pay more than their "fair share" - the loyal (or stuck) residents of Cleveland are being screwed IMHO.  This is at least a violation of our constitutional right to "equal protection".  

Is the new condo real estate tax exemption different from  E.D.E.N.'s?

Besides the City of Cleveland,  E.D.E.N. is operating "private hospitals" in other NEO communities.    How about other states?    Are any of the individuals involved/profiting from E.D.E.N. connected with other NEO folks?   Thinking of the resent FBI corruption investigations in NEO.  

What legal challenges regarding their real estate tax exempt status has E.D.E.N. faced?   Is their avoidance of real estate taxes legally supportable?   Is E.D.E.N. a for-profit or non-profit business?

If E.D.E.N. is housing the homeless, the mentally ill, the addicted - all these services would be eligible for both state and federal compensation.  These are all tough issues to resolve.  Is E.D.E.N.'s  non-payment of local real estate taxes a reasonable exemption if they provide a legitimate philanthropic service?  Churches are exempt from local real estate taxes - is that fair to aethiests - or any of us?   

Here is a link to the Agenda - Ohio Department of Mental Health and Addiction Services which pdf describes services provided by E.D.E.N. and other similar NEO organizations. 

iF MT. SINAI HOSPITAL IS PAYING REAL ESTATE TAXES ON SIMILAR OPERATIONS...THAT'S SIGNIFICANT - CALLING INTO QUESTION E.D.E.N.'S NON PAYMENT.

CLEVELAND, Ohio -- In a dispute that pits the right to know against the right to privacy, some Cleveland suburbs want a nonprofit group to pinpoint hundreds of addresses occupied by mentally or physically disabled people who have struggled with homelessness.

The Emerald Development and Economic Network, which administers federal rent subsidy for the tenants, has resisted appeals from 19 older communities represented by the First Suburbs Consortium.

The cities say disclosure would help them keep an eye on single-family rental houses that multiplied in recent years as the real estate market weakened. Officials say they don't need names or other personal information on the tenants, just their locations.

They have pressed for an agreement like one they reached with the Cuyahoga Metropolitan Housing Authority in 2006. That deal, brokered by the late Rep. Stephanie Tubbs Jones, calls for the parties to collaborate on inspecting houses and expelling bad landlords and tenants from the much larger Housing Choice Voucher Program, also known as Section 8.

 
 
 
 
 

"We want to make sure the house is up to snuff," said Rick Wagner, housing manager for Cleveland Heights. "Taxpayers' money is paying the rent, so the house should meet community standards."

The disagreement dates to 2009, but talks have been held as recently as a few weeks ago.

Cuyahoga County officials, who process the program's federal funding, back EDEN.

Both EDEN and the county cite the U.S. Department of Housing and Urban Development's opinion that releasing the information on the disabled could violate civil rights and anti-bias laws, including the Fair Housing and Americans with Disabilities acts.  In a 2012 letter to the county, a HUD official said disclosing the information would also be "a poor policy and program choice" that could "undermine local and national efforts to prevent and end homelessness.

EDEN officials have proposed alternatives for collaboration, but they and the county say providing addresses is out of the question.

"The county's position is the funder's position," said Rick Werner, the county's director of health and human services. "Until HUD changes the regulations or their interpretation, we are bound, and so is EDEN, to abide by it."

EDEN assists tenants living in about 2,400 apartments and single-family houses spread across Cleveland and 32 suburbs.  Slightly more than 1,000 of those are in the suburbs, but nearly two-thirds are clustered in Lakewood, Euclid and Cleveland Heights.

The cities don't seem to have had many encounters with EDEN tenants, but officials say they might not have known that the program was subsidizing the rent.

Euclid Mayor Bill Cervenik said he opposed a failed effort to hold up EDEN's funding at the county level. He said the city's housing staff does not think the houses are a significant problem and added that Euclid has "other ways of finding rental property."

Shaker Heights Law Director William Gruber said the cities have no intention of stirring neighborhood opposition or engaging in discrimination. He said sharing the addresses would serve interests on both sides of the debate.

"We can be their eyes and ears out there," he said. "We have someone to go to if there's a problem."

EDEN Executive Director Irene Collins and Chief Operating Officer Elaine Gimmel say the units they subsidize represent a minuscule piece of the suburban rental market, but the agency wants to be a good neighbor.

They have agreed to ensure that every unit has a certificate of occupancy from the cities, though that guarantees only that the rental is registered. The agency also bars use of property that is tax delinquent or in foreclosure and employs licensed inspectors who check units up front, annually and as problems arise.

EDEN has offered to scan mass lists of problem properties or examine individual cases so it can decide privately whether the agency is connected and needs to take action. But the cities consider those suggestions to be cumbersome and impractical.

The tenants' mental disabilities are considered severe, but Collins said the risk is "not significantly higher than for anybody else living next door to you." She and Gimmel said case managers monitor the tenants, though they acknowledge that the managers are spread thin.

EDEN wants to avoid evicting tenants, if possible.

"We're in the business of keeping people housed," Collins said. "That would be a last resort."

Gruber said the cities want to go straight to HUD, after they find the best contact within the bureaucracy. He suggested that federal officials may not have a full understanding of what the cities want.

Meanwhile, First Suburbs Director Jennifer Kuzma said she hopes to make cities more familiar with EDEN, the agency's clients and its services.

"I think, ultimately, we all have the same goal -- to get help to our residents who need it," she said.

 

 

EDEN

EDEN isn't a tax avoiders. That is absurd.

the PSH program is part of HousingFirst. The goal is to eliminate homelessness.

I toured the PSH by MetroHealth, and met a wheelchair bound former Marine. He had been homeless before getting his efficiency apartment.

There is on site mental health services, AA, VA and other services. That is how Permanent Supportive Housing (PSH) works.

In areas where they have gone in, PSH is a stabilizing factor.

The person in the apartment is a tenant and has the same rights as any one else.

EDEN has never tried to be a hospital.

You may have found an obscure category by someone but they have always been up front.

The drop out rate in PSH is 2%. Most tenants use the supportive services. It is far easier to stay sober, get a GED, or a job, when the person has a home.

 Neighbors don't complain about PSH. People do respond thought, to fear mongering and misunderstanding. 

To call these PSHs heroin hospitals is so off base that it is hilarious.

Taxes

a PS: for this property, the LDS paid zero taxes.