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Knights And Town Of Haverstraw Saw Writing on the Wall; Attorney General’s Office Received Raft of Complaints About Sale, Lawsuits Loomed
By Tina Traster
The long-contentious deal for the Village of Haverstraw Knights of Columbus to donate their building at 56 West Broad Street in the Village of Haverstraw has been scrapped.
In mid-2024, the Knights of Columbus were on the cusp of selling their building for $2.4 million to a developer that planned to tear down the existing structure and develop 100 affordable housing units, along with a parking deck for the Village of Haverstraw. As part of the deal, the Knights were offered a portion of the building in perpetuity to continue their charitable work.
“The deal is off. We will not be transferring the building to the town,” said Vargas.
Last May, without warning, the housing deal collapsed after the newly appointed Grand Knight, Joe Vargas negotiated secretly with Haverstraw Town Supervisor Howard Phillips, town attorney Bill Stein, and others to donate the building to the Town of Haverstraw. Phillips has been public about his opposition to affordable housing in the Village of Haverstraw and the Town at large and has been holding up two other major developers who are seeking PILOTs for affordable housing and workforce housing projects.
In an effort to thwart the sale of the building, the Town of Haverstraw offered the Knights a grab-bag of short-term monetary perks to cover their expenses and continued use of their office, conference room, and a closet, totaling about 1,500 square feet in the building once the donation was completed.
However, several obstacles stood in the way of Haverstraw’s endeavor to get the building donated, including a raft of complaints sent to the Attorney General’s Charities Bureau, which needed to give its approval for the deal.
Last Thursday, Vargas told the 581 Council the deal in its current form was dead.
“56 West Broad Street Angels Holding (the holding entity that owns the Knights’ building), has mutually agreed with the town not to transfer the building,” said Vargas. “The deal is off. We will not be transferring the building to the town.”
Vargas went on to say, “We continue to work with the town to come up with a legal agreement to fulfill our individual needs. We are continuing to speak with them to see what we can do to address our individual needs.”
What happens next is unclear, but Phillips and the town were aware that several complaints had been made to the Attorney General’s office about the effort to persuade the Knights of Columbus to donate its building. The $2.4 million deal would have kept the Knights’ charitable mission going for decades.
“I’m not elated,” said McGowan. “There are no winners here. I stood for my conviction.
Complaints were sent to the AG’s office because nonprofit organizations are required to show the AG’s office that a fair market transaction is taking place. The AG’s role is to determine that the terms of the transaction are “fair and reasonable.”
Among those who complained were Todd McGowan, the former Grand Knight who ushered the deal with the developer over the course of nearly two years.
“I’m not elated,” said McGowan. “There are no winners here. I stood for my conviction. It took a toll on how I’m treated. I’m like the 500-pound gorilla that no one wants to talk to. I see it as a loss for me personally but I would not change a thing, I didn’t feel (the donation) was right, I fought it knowing there would be a price to pay.”
Sources say town officials knew the deal was under scrutiny. Issues raised in complaints included depriving the Knights of an endowment, misuse of taxpayer money, civil rights issues, and the violation of the separation of church and state because the town would not have been able to offer a Catholic fraternal organization space in a town-owned building.
Prior to convincing the Knights to donate, the town 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. While awaiting a decision from the AG’s office, the Town upped the payments to $7,000 per month.
The two entities forged the deal that gave the Knights $7,000 per month (an 840 percent increase), 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.)
To date, the Knights have received $98,000 for rent, as well as $14,200 to replace a fire alarm system.
The town also paid for the Knights’ attorney to pursue approval with the Attorney General’s Charities Bureau.
What happens next remains unclear.
Vargas, at last Thursday’s meeting, told the Haverstraw council that the Knights of Columbus “District Deputy” had expressed concern over the transaction because the entire council membership had not voted on the original sale.
“As a result, the planned transfer of the building is off,” Vargas said. In early 2024, the entire council was told about the transaction but never took a formal vote. A source who attended that meeting said nobody on the council objected to the sale.
Sources present at the meeting say there was no major reaction to Vargas’s announcement but Ray Furlong said, “I thought Howie helps us out,” referring to Phillips.
Another member said, “So now we’re really back to square one,” but Vargas said he was still working with the town.
At one point, Vargas had said the council was “in turmoil.”
With $7,000 a month of town money flowing in, the council was flush. Vargas has been doling out more and more charitable monies for repair projects at local churches.
Prior to the decision to donate, the Knights sponsored weekly BINGO games to raise funds to pay their expenses and maintain the building. In last week’s meeting, Vargas told the council that “BINGO is the council’s lifeline; it keeps the lights on.”
The planned donation of the building, however, spread confusion and consternation among the Haverstraw Knights of Columbus, as well as the other seven councils in the county.
“To have that future endowment when you divest that building is a great thing to continue your mission, confidently knowing that you have a nice nest of money for many years to come,” said Bob Vyskocil, Grand Knight of St. Dominic’s Council in Blauvelt.
In September, several months after the sale that would have yielded much-needed affordable housing was scuttled, Kings Katherine LLC sent a letter to the Town of Haverstraw, saying it has discriminated against minorities, violated the separation of church and state, and is misusing taxpayer money.
“What is being done here is illegal and is callously suspect of rank discrimination against minorities,” the letter says.
Sources say the developer was planning to file a lawsuit within the next few weeks. Vargas has indicated the town officials may still be seeking a way to acquire the building or come to some mutually beneficial deal with the Knights. Even if Haverstraw endeavored to buy the building (the appraisal submitted to the AG’s office in September was roughly $1.5 million), the Knights would still need to find a non-town-owned space to continue their work.
