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Paul Millus Quoted in the Long Island Herald, "I.P. Working Out Settlement of 1990 Suit"

Feb 7, 2017Litigation & Dispute Resolution

Nearly 27 years after the federal government filed a lawsuit against the Village of Island Park for its alleged misuse of housing program funds aimed at helping members of minorities obtain homes in the community, residents have raised questions about unimplemented terms in the case’s settlement.

During a four-year span beginning in 1979, the village built 44 homes under the Section 235 Housing Program, which was set up to ensure housing for lower-income families through federally subsidized mortgages. The program was funded in part by Community Development Block Grant funds provided by the Department of Housing and Urban Development, and partly by mortgage subsidies paid by HUD, which was expected to increase diversity in Island Park.

But a 1990 lawsuit filed in the U.S. District Court for the Eastern District of New York accused village officials and residents of manipulating the program so that houses would be awarded to friends and relatives, instead of African-Americans, Hispanics and other minorities. The government sought $5.4 million in damages.

Defendants in the suit included former Mayors Michael Parente and Jacqueline Papatsos, former Trustees Charlotte Kikkert, Philip Taglianetti and James Fallon, and others in the village.

In 2012, the village board voted to settle the suit under undisclosed terms. Two years later, in March 2014, a consent decree was filed in court, ordering Island Park to pay $1.96 million to the government.

“The village admits and agrees that it must remedy the effects of its conduct which has ‘perpetuated segregation in the village’ and ‘discriminated against African-Americans by denying them the opportunity to purchase single-family housing within the village,’” the decree said, “a right protected by the Fair Housing Act.”

At recent board meetings, residents have pressed village officials to report its progress on complying with court documents. “… We’re waiting on the feds to sign off on it,” Village Attorney Anthony Cornachio said at the Jan. 19 meeting. “It’s almost like they forgot about it …”

Initially, money was to be put into three interest-bearing accounts, according to the decree. One was to include $300,000 for a fair housing administrator, which the village was ordered to appoint within 120 days to help train village officials on fair-housing practices and provide support to African-American homebuyers, among other duties.

The village was also supposed to pay $568,000 to a second account, and a third was to have an initial deposit of $32,000. The remaining $1.06 million was to be paid in monthly $13,600 payments over 78 months, beginning this June.

Paul Millus, an attorney for Garden City-based Meyer Suozzi, which represents the village in the case, said that insurance funds covered the required $900,000 for the three accounts. In terms of hiring a fair housing administrator, the first person the village recommended for the job was turned down, Millus said, and the U.S. attorney’s office is reviewing another possible candidate. Millus added that the village has done everything possible to cooperate, and has “left the ball in their court.”

“Things are in somewhat flux, but in the end, we’re complying,” Millus said. “…I know it seems like it’s taking a long time, but this case was also in existence for many, many years, so relatively speaking, it’s not.”

At the time the decree was written, three African-Americans owned single-family homes in the village, the document said. The court proposed a goal of ensuring that 17 homes in the village were bought and occupied by African-American after the two-year outreach effort led by the fair housing administrator. According to the U.S. Census Bureau, in 2010, Island Park was 83.4 percent white and 1.9 percent black.

Though Millus said he has no problem with the village appointing a fair housing administrator, he added that Island Park has already seen an increase in home ownership by minorities during the last few years. “It’s almost as if what happens is, just by virtue of demographic changes and so forth, everything is accomplished almost on its own,” he said.

But Harbor Isle resident Richard Schurin, a partner at a Garden City law firm, said the village should be held to following through with the decree’s orders. “Island Park is my address, and my kids go to Island Park schools,” Schurin said. “The state of the village concerns me, and the reputation of the village concerns me.”

Residents have also publicly inquired how the remaining payments, originally slated to begin this June, will affect them as taxpayers. Millus said that the taxes the village will raise would be increased “in a reasonable percentage over a period of time.”

Mayor Michael McGinty, who took office in 2014, shortly after the decree was filed, told the Herald that he has worked tirelessly to try to minimize the property tax impact on residents.

“If there’s one thing we know, property taxes have to be controlled through spending cuts and new revenue sources,” McGinty said, “and that’s a full-time job in and of itself.”

The U.S. attorney’s office and HUD declined to comment on this case.