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OAG Says Knights’ Holding Company Can’t Simply Amend Its Charter To Lease or Sell Principal Asset
By Tina Traster
For nearly three years, the Knights of Columbus (Haverstraw Council) have made a series of unsuccessful attempts to either donate or rent 56 West Broad Street in the Village of Haverstraw to the Town of Haverstraw. In a desperate Hail Mary, the nonprofit corporation holding title to the building for the Knights is asking a court to give it permission to change its charter because it is trying to unburden itself from the financial pressure of owning and operating a building the Knights can no longer afford to maintain.
On Friday, the holding company for the Knights’ principal asset (56 West Broad Street Angels Holding, Inc.) filed a lawsuit in Rockland County Supreme Court asking a judge to allow the “charitable” nonprofit to change its status to a “non-charitable” nonprofit, which would give it the flexibility to lease or sell the building. However, the Office of the Attorney General (Charities Bureau) had already rejected the proposed amendment in December 2025. While nonprofits are permitted to clarify their missions, they are not generally allowed to make a “fundamental and unauthorized re-designation of the organization’s type and purpose.”
The Knights of Columbus Haverstraw Council was established as a charitable entity under New York law in 1901 and is celebrating its 125th anniversary this year. The OAG determined the holding company, 56 West Broad, chartered in 2003, has no other purpose than to benefit the Knights. Changing that purpose would leave the fraternal order vulnerable to the whims of another organization that would be free to use the asset as it pleases, without review by the Charities Bureau.
“The organization was established—and continues to function—as a charitable entity under New York law,” according to the OAG. “Specifically, the organization appears to function as a “disregarded entity” or passive holding company for the beneficial interest of the Haverstraw Council-Knights of Columbus. In such common governance structures, the holding company is controlled by the underlying charity and is treated under the law as similarly charitable. That determination is supported by the existing Certificate of Incorporation, the associated corporate context, and language in the entity’s Bylaws.”
Ironically, the Knights in 2024 were poised to legally sell their building to an affordable housing developer for $2.4 million. For more than a year, the Knights were negotiating with Kings Katherine LLC, which planned to build 100 affordable housing units, a parking deck, and allocate space in the building for the Knights in perpetuity.
At the time, Supervisor Howard Phillips, along with a quorum of town officials, held a private meeting at the 11th hour with Joe Vargas, the then-new Grand Knight, where the parties hatched a deal for the Knights to forego the sale and donate the building to the Town of Haverstraw instead. The Knights, saying their Catholic Fraternal organization was on life support, latched onto a deal that would make them flush — at least in the short term.
Phillips in June 2024 offered them $7,000 monthly until the donation deal was completed, plus the town inexplicably paid the Knights’ “back rent” of $56,000 for the first six months of 2024. The temporary deal also included taxpayer money to install a $14,000 fire alarm, as well as paid the Knights’ attorneys’ fees.
In 2024, the Knights received taxpayer money totaling more than $120,000.
The proposed donation of the building angered the developer, tax watchers, defenders of the Constitution’s separation of church and state, Village of Haverstraw officials who have been champions for affordable housing, and the former Grand Knight who had shepherded the original sale. Phillips had been vocally opposing affordable housing in the Village of Haverstraw, making efforts to also but unsuccessfully thwart WestHab and The Chair Factory sites. (Both projects are underway and will add more than 400 affordable units to the village.)
Town of Haverstraw taxpayers, meanwhile, were funding legal fees for the Knights, which needed approval from the OAG’s office to complete the donation. But after many months of a stalled effort to get approvals, the Knights and Phillips came up with a new plan to lease the building for 25 years, rather than take title through a donation. The proposed leasing arrangement included a one-time payment to the Knights of $20,000, $500 in monthly rental payments, and the absorption of the fraternal order’s expenses, including the Knights’ real estate taxes, insurance premiums, and utilities.
The Town will also assume the cost of maintenance of the entire building, including plumbing, heating, electric service, HVAC and the building’s roof. Under the lease, the Knights will have continued use its office, the rec room and meeting room, and a storage closet.
The annual property taxes on the building at 56 West Broad Street in the Village of Haverstraw are more than $30,000. By many accounts, taxpayer support of a Catholic fraternal organization raises questions about the use of taxpayer funds and the separation of church and state.
The lease says that the Town will use the Knight’s facility for the Haverstraw Senior Citizens Recreation Program.
But the Knights found themselves back to square one, needing OAG approval for the latest scheme. As time dragged on, it became apparent that the Knights would not receive approval from the OAG for the leasing agreement, likely because the proposal ran into the same issues surrounding the charter change for the holding company.
The OAG rejected the proposed amendment to the certificate of incorporation on Dec. 15 2025 and has not heard from the entity since.
Now 56 West Broad Street Angels is hoping the court will green light its plans.
“Under N-PCL Article 8 (Amendments and Changes), the applicant could alternatively seek court approval of the amendment, in which case the Attorney General would be a necessary party,” said a spokesperson from the OAG’s office. “It sounds like this is what they are saying they are doing, but OAG has not received any indication that such a proceeding has been commenced.”
The OAG said the “order to show cause has not yet been signed by a judge, and it has not been served to our office.”
In the lawsuit, which is being funded by Haverstraw’s taxpayers, 56 West Broad (the holding company) is seeking “to amend their Certificate of Incorporation to accurately reflect its proper classification as a non-charitable corporation under the N-PCL” saying that it is “not a charitable corporation, insofar as its sole purpose and sole corporate activity is to serve as a title holding company.”
56 West Broad argues that the change from charitable to non-charitable would obviate the need for approval by either the Attorney General or the Court, allowing it to move forward and lease the building to the Town of Haverstraw. It relies in part on how the IRS determines exemptions from taxes as justification for the change in status. It implies that it was inaccurately classified, and fails to mention to the Court that the AOG had already rejected the proposed revisions.
In the alternative, if the Court does not grant the change in its Certificate of Incorporation, 56 West Broad is asking the Court to approve of the lease to the Town. In support, it offered a “rental analysis” from a certified appraiser dated August 5, 2025, concluding that with the Town paying a $20,000 lease fee to the Knights, and the Town paying for all of the maintenance, insurance, taxes, etc., the lease within the “range of effective market rent” and that the terms are fair and reasonable to the holding company, and by extension to the Knights.
“In the end, Howard (Phillips) just wants to buy this building,” said one insider. “That’s what this whole thing has always been about.”
