By JEREMY OLSHAN

Co-ops are often ‘Contradictory Operations.’

On one hand, co-ops are mini-municipalities; they have citizens (shareholders), governments (boards of directors), constitutions (offering plans), taxes (maintenance fees), regular elections, and debt.

On the other hand, co-ops are for-profit corporations; they have major stockholders (sponsors) and inequities (one apartment does not equal one vote).

At their best, co-ops are democratic communities. At their worst, they can become totalitarian states.

For several years, a group of homeowners at Anita Terrace, a 559-unit co-operative apartment in Rego Park, has been struggling to wrest control of the co-op board from Visutton Associates (the sponsor), who they claim have, among other offences, allowed the building to deteriorate to an unsafe condition. The sponsor currently owns 40 percent of the apartments in the building, those which have yet to be sold.

"The sponsor has already made his money on the co-op," said Abram Gin, president of the Anita Homeowners Association. "So now he is going to let it fall to pieces."

Gin, a Russian immigrant who at one time owned dozens of buildings in Manhattan and the Bronx, rallied the support of homeowners throughout the complex. So in 1997, when the elections for Board of Directors were held, the homeowners association was able to win four out of the seven seats.

But rather than abdicate control of the co-op board, the sponsor, Peter Mesos and his partner Leonard Zangas, chose to take the Homeowners Association to court.

Mesos protested the co-op’s original offering plan, which stipulated that after the first five years, regardless of how many of the apartments had been sold, he would only be able to vote for three of the seven board members. Mesos called the stipulation "unfair."

"It was outrageous," said Paul Appel, attorney for the Homeowners Association. "The offering plan restricted his vote, but he has played all kinds of games to try and get around this fact."

Judge Charles Thomas ruled in favor of the homeowner’s association at State Supreme Court in January of 1998, and ordered a new election to be held within 10 days. The sponsor’s attorneys were able to delay this election, and have twice appealed Thomas’ decision. Over a year later, the election has yet to occur.

Damage Control

Gin contends that while this matter is being delayed in the courts, life-threatening conditions have developed in the complex. The Homeowners Association commissioned an architectural firm to study the three Anita buildings and they were greatly disturbed by the results.

When an architectural firm inspected Anita Terrace, they found that the conditions in the parking garage posed a "clear and present danger."

Having thoroughly studied the structural integrity of portions of the co-op, architects at the Manhattan firm of Kagan Stewart Robotham concluded that "a danger exists to the life, health and safety of the residents of the building. The basic problem is that maintenance has been neglected for many years as evidenced by the following observations…"

The two greatest problems, according to the report, were the water tower, and the parking garage, both of which pose urgent, life-threatening risks.

So the Homeowners Association turned to newly elected Assemblyman Michael Cohen, who promptly contacted the city’s Department of Buildings (DOB).

Soon after the DOB inspected the site, the water tower was removed, and the parking garage was condemned. This meant that all of the homeowners who had paid for a parking spot in the building were now forced onto the street.

Damage Control, Part II

Peter Mesos, the principal sponsor, claims that while there are problems in the building they were not severe, and certainly did not warrant its condemnation.

"Mr. Gin is a real troublemaker," said Mesos. "Everyone knew there were problems in the garage, but he got an engineer to write a biased report just to try and strong arm me."

Mesos went on to argue that Gin’s intentions were less than noble. "He has a personal vendetta against me," said Mesos. "He has stirred up a lot of problems in this building and he will probably eventually get control of it."

Several tenants in the building agree.

"Mr. Gin has caused pain and suffering to numerous tenants who now have nowhere to park," said one tenant, who spoke on the condition of anonymity. "The garage was not a danger, it didn’t have to be this way."

Gin, with the help of Assemblyman Cohen, has arranged with the Department of Sanitation to indefinitely suspend alternate side parking rules around the building until the garage is repaired.

At the same time, a battle of the newsletters has ensued between the Homeowners Association and the building’s management. Mesos distributed newspaper clippings about Gin’s real estate dealings in the late 1980s and early 1990s, and his subsequent declaration of bankruptcy.

To members of the homeowners association, this is little more than petty muckraking. "Abram [Gin] was never convicted, or indicted," said Howard Schwartz, treasurer of the Homeowners Association. "He was investigated by the IRS and the FBI, but he came out as clean as a whistle."

To fight fire with fire, Schwartz and Gin reprinted positive articles from the New York Times and other papers about Gin’s past in the Homeowner Association’s newsletter.

But many involved believe these personal attacks to be detracting attention from the safety of the residents and insuring that the homeowners are able to hold a fair election.

"The issue is not Mr. Gin’s infidelity, lack of trustworthiness, or alleged fraudulent activities," said Assemblyman Cohen. "The issue here is that a clear and present danger exists at Anita Terrace."

Officials At Bat

Concerned for the welfare of the people of Anita Terrace, and that the sponsor may have engaged in criminal activity with regard to refinancing the co-ops mortgage, Assemblyman Cohen called on State Attorney General Eliot Spitzer to act in the matter,

"An additional $4 million of the sponsor’s debt was added onto the co-op’s mortgage, using the entire building, not just the unsold shares as collateral." Cohen told Spitzer.

Cohen set up a meeting between the Anita Terrace Homeowners Association and the Attorney General, whose office is currently investigating the matter.

A new election is scheduled for March 29, at which time both sides are confident that the homeowners will take control of the board of directors. Gin says that once this occurs, they will pursue additional legal action against the sponsor to recuperate some of damage that has been done to the co-op.

Mesos on the other hand, believes that Gin has his own personal agenda, and will control the co-op board like puppets.

The Homeowners Association calls this charge "ridiculous," and said that there is no co-op d’état in the works.

The Homeowners Association plans to obtain proxies from 200 shareholders, ensuring that their candidates win seats on the board.

Before You Fly The Co-op

While the case of Anita Terrace is an extreme example, problems between co-op shareholders and the sponsors are all too common in Queens and elsewhere.

"The sponsor in too many situations, even when he is nominally not supposed to, still remains in control," said Appel.

One of the biggest problems, say Co-op experts, is that would be homeowners do not carefully study the co-op’s prospectus, said Joel Zand, a co-op attorney who will soon launch "co-oplaw.com," an informational web site devoted to co-op issues.

Anita homeowners couldn’t agree more. "I spoke to someone who just moved in a few weeks ago," said Howard Schwartz. "Nobody ever told him what was going on here, and that there was litigation pending."