Bunch of ‘keep’skates in Harlem
Nonprofit hoards cash as its execs prosper
Congressman Charles Rangel’s favorite Harlem nonprofit has handed out hardly any cash in the last year, instead sitting on $55 million in taxpayer money and failing miserably in its mandate to spur development.
Critics contend the Upper Manhattan Empowerment Zone is hoarding cash in order to stay in business and continue to dole out bloated salaries to its staff.
The nonprofit has lent out just $215,000 to small businesses since July 2010, a stark drop from the $2.1 million in loans it made a year earlier. Grants are down, too, to $2.9 million from more than $4.7 million the previous fiscal year.
The group has about $55 million left in its coffers, from an original pot of $249 million in federal, state and city funding. But with no additional taxpayer funding expected, and their federal mandate slated to expire by law on Dec. 31, 2011, insiders believe UMEZ execs are desperately clinging to cash reserves to extend the group’s life — and their livelihoods.
“They’re sitting on a chunk of cash so they can pay their fat salaries,” said one Harlem insider. “You would think with the economic climate, they would be able to figure out how to invest money in the community to create some jobs,”
While Harlem entrepreneurs are denied assistance, the nonprofit’s execs are living high on the hog. Its director, Ken Knuckles, is paid $243,949 and stands to get a retirement package of more than $500,000.
UMEZ spokesman Fred Winters blamed the funding slowdown on tough economic times and a drop in construction financing.
“UMEZ was never designed to be the principal financier of projects, but more to leverage public and private financing and to work as a consultant,” said Winters.
Rangel wrote the legislation in the 1990s that created empowerment zones nationwide to revitalize poor neighborhoods.
UMEZ, with about 16 staffers soaking up $2 million in annual salary, has lent millions to lure businesses to upper Manhattan or to help existing ones
A smiling Rangel gripped an oversized check for $1 million at a March 2010 ceremony for a loan to the Best Yet supermarket, which opened on Frederick Douglass Boulevard.
But since July 1, 2010, UMEZ has approved only a $120,000 loan to Harlem Vintage, a wine store, and $95,000 to Society Coffee and Juice, a cafe, according to a loan report filed with the state.
Grants have been approved for just a handful of programs including the National Jazz Museum, Northern Manhattan Arts Alliance and the New York Women’s Chamber of Commerce.
By ISABEL VINCENT and MELISSA KLEIN
Last Updated: 7:02 AM, August 28, 2011