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Freedom From Religion Foundation Sends Second Letter; Town Of Haverstraw Ignores First Demand To Cease Donation Plan
Analysis
The Town Of Haverstraw can neither fund a religious organization nor can it provide exclusive space to it in a town-owned building, yet it plans to do just that.
Let’s consider the issue:
The Knights of Columbus owns its building at 56 West Broad Street in the Village of Haverstraw through a non-profit holding company set up to hold title to the building for the Knights’ benefit. Members of the holding company are members of the Knights, including the Grand Knight and four other high-ranking members. The holding company has the right to dispose of the property by a vote of its board, but it also must secure the approval of either the New York State Attorney General or the Court.
Last year, the Knights voted unanimously to sell their land and building to a Westchester-based affordable housing developer for $2.4 million. Part of the deal entitled the Knights to a $1/year lease in the new building for as long as they wanted to remain. The developer would build about 100 units of affordable housing, construct a parking deck on Village-owned land, and continue to provide space for community use in the new building. The Knights of Columbus would have a permanent home in the new building and have more than $2 million available to it to continue its charitable and religious missions.
The development team held a series of meetings with the Knights addressing questions and concerns. The Village was supportive of the project. A LOI (letter of intent) was executed. Contracts were drawn up and ready for signature. Then there was a change in the leadership of the Knights. A new Grand Knight took the place of the former Grand Knight who had led the original negotiations with the affordable housing developer.
Town of Haverstraw Steps In
The new Grand Knight and Haverstraw Town Supervisor Howard Phillips opened a dialog about the pending deal. The Knights were in financial trouble, struggling to pay their bills or meet their expenses. In a series of meetings held with town officials in private, a new deal was hatched. The Knights’ holding company would scrap the $2.4 million deal with the affordable housing developer and enter into a series of agreements with the Town of Haverstraw that: (1) would provide the Knights with a short-term financial boost from the town coffers to cover all of the Knights’ ongoing expenses; and (2) result in the Knights donating its property to the Town of Haverstraw. The donation is subject to approval by the New York State Attorney General Charities Bureau which is charged to make sure non-profit organizations that disgorge themselves of their main assets receive fair market value for their property.
First, the short-term financial boost. The Town of Haverstraw had been paying the Knights about $2,500 per quarter ($833/month) for the town to use part of the Knights’ building for meetings with seniors. The new short-term deal boosted that rental amount to $7,000 per month (an 840 percent increase) for the same use, and although the agreement was hatched in June of 2024, the town agreed to pay the rent retroactive to January of 2024. Payment was made in one lump sum to cover the back rent and payments continue going forward. The payments cover all the Knights’ expenses including phones, water, electric, insurance, pest control, landscaping, insurance and most importantly, property taxes due back to the town. (Should the NYS AG’s office reject the donation, the rent would automatically reset from $7,000 per month down to $2,000 per month.)
As part of the deal, the building would be donated to the town but the Knights can remain on the property in perpetuity; however its occupancy would be limited to its office, conference room, and a storage closet. The deal also allowed the Knights exclusive use of other parts of the property on a detailed schedule but precluded the Knights from allowing third-parties to use the space for a fee. In other words, the town would own the building as municipally-owned property and provide exclusive space in the town-owned property to the Knights of Columbus, a Catholic fraternal organization. The town would pay all of the Knights expenses. And to make sure that the deal goes forward, the town selected, hired and paid for both a law firm and a lobbying firm (at $400 an hour) to advise and represent the Knights in their application to the Attorney General.
The town also agreed that the Knights could continue to display their religious regalia on the to-be town-owned property after it takes title.
Here’s The Problem
A municipal government can neither fund nor provide exclusive space in perpetuity to a religious organization in a town-owned building. A town cannot pay an inflated rent to a religious organization as a subsidy to facilitate its religious mission and operating expenses. A town cannot provide an exclusive arrangement to one religion to display religious regalia, nor can it provide sanctuary to a chosen religion over others on town-owned property.
The Knights are walking into this deal (donation) with the town under the mistaken belief it can have all these things in the future – free space in perpetuity, exclusive rights to hold events, the ability to display its religious regalia, payment of its expenses, its lawyers and lobbyists paid for by taxpayers, and an inflated subsidy — all in a town-owned building.
The law is pretty clear that government cannot fund religious organizations or provide them with free space in government-owned buildings. The government cannot prefer Catholicism over other religions in the use of a town-owned building. The government cannot use taxpayer dollars to pay lawyers and lobbyists for a Catholic fraternal organization.
If the Attorney General approves the donation, it will only be a matter of time before a suit is brought by taxpayers or residents of Haverstraw objecting to government support of a religious organization.
The Freedom From Religion Foundation (ffrf.org – a national non-profit that advocates and litigates church/state constitutional issues and has won countless cases) has already alerted the Town of Haverstraw to its violation of the law and demanded that the town rescind the donation. Evidence has been provided to the FFRF showing the details of the town’s financial support for the Knights. Copies of text messages between Town Supervisor Howard Phillips and Grand Knight Joe Vargas have been shared with FFRF counsel. The Town of Haverstraw and its attorney ignored the first letter from the FFRF. A second follow-up demand was recently sent and also went unanswered.
The lawyers and lobbyists hired by the town to represent the Knights must see the problem. The Knights’ lawyer is either okay with the risk, complicit, or unaware of it. If a lawsuit succeeds, the Knights will be ousted from the building, its religious regalia removed, its exclusive access revoked. It will have given away its building with nothing received in return and no recourse.
Had the Knights of Columbus gone through with the deal with the affordable housing developer, it would have millions of dollars to pursue its charitable purposes and space in perpetuity. The Village (and town) would have had a valuable property on its tax rolls and a new parking deck. The community would have had public space and desperately-needed affordable housing units.
The only winner here is the Town of Haverstraw, which has orchestrated the donation without regard to the future of the Knights, its religious and charitable purposes, or its continued viability as an organization. And while the town will get a building, it’s getting at the nonprofit charity’s expense.
The Knights started this process with good intentions but will likely end up on the short end of the stick. They panicked. The bought fuzzy promises that cannot be kept. In the end, they will be the true losers because the Town of Haverstraw is taking advantage of a financially-strapped organization with some short-term relief. The Town of Haverstraw is misusing taxpayer money – knowing that in the end of the day, a court will be blamed for upholding the law. Town officials will claim they didn’t see the separation of church and state issue, and of course there is nothing that it can do about it now. They have been warned. They continue to be warned. But they choose to ignore the warnings.
The only hope for the Knights is that the Attorney General, Charities Bureau sees the folly of the deal and rejects the donation – recognizing that the Knights are getting less-than-nothing from the Town of Haverstraw for its donation.
