The Legal Aid Society and Kasowitz Benson Torres LLP, with the financial support of Thorobird Companies LLC, secured an important settlement for The First Union Baptist Church of the Bronx, a decades-old church located at 2064 Grand Concourse in the Bronx. After protracted litigation and hard-fought negotiations, the Church, which has faced the risk of losing its historic building since 2012, will retain its current location in a settlement that will also provide 45 units of much-needed affordable rental housing in a rapidly gentrifying community.
“This is a perfect example of collaborating to build sustainable communities while at the same time protecting those vital institutions that maintained stability during the turmoil of economic and social unrest. The people in our communities should not be put on the auction block in the name of economic development when property values rise. We can achieve balanced economic development without furthering economic disparities by making opportunities available to everyone,” said Susan Chase, Staff Attorney with the Community Development Project at The Legal Aid Society.
“Kasowitz Benson Torres is extremely gratified to have had the opportunity to help save First Union Baptist Church in a win-win resolution that will return the Church to a sound financial footing and also provide housing to 45 low-income New York residents and their families,” said David J. Abrams, Partner of Kasowitz Benson Torres and Chair of the firm’s Pro Bono Committee.
“Thorobird Companies is thrilled to have played a part in helping the Church remain in its current location. Helping this neighborhood institution by assisting in its strategy of recovery over the past three years, providing the settlement capital and planning the rebuild of the church along with needed affordable housing is true revitalization in this community,” said Thomas Campbell, Managing Member of Thorobird Companies LLC.
In 2012, the Church filed for bankruptcy, and the original mortgagee sold the note. One month before the final payments were due, the Church defaulted on a payment to its mortgagee, which immediately recorded the deed to the Church property that it held as security in lieu of foreclosure.
Facing an imminent shutdown, the Church contacted the Community Development Project of The Legal Aid Society, whose Pro Bono Practice reached out to Kasowitz to represent the Church to challenge the recording of the deed. After extensive discovery and a trial on the merits in 2017, at which Thorobird Companies testified on behalf of the Church, the bankruptcy court ordered title to be restored to First Union Baptist Church. After the U.S. District Court for the Southern District of New York reversed the decision, the parties fully briefed an appeal to the U.S. Court of Appeals for the Second Circuit on an important unsettled issue of New York real property law. Ultimately, Kasowitz and Legal Aid negotiated a highly favorable settlement with the Church’s mortgagee with the help of affordable housing developer Thorobird Companies.
Under the settlement agreement, Thorobird paid off the Church’s debt and received title to the Church property in exchange for agreeing to build affordable rental housing units on the site and for giving a deed back to the Church at the completion of the renovation of a 4,500-square-foot Church space.
“First Union is a community institution that stood firm and provided resources when the Bronx was burning, through drug epidemics and gang violence. We are so grateful for the expert legal advocacy of the Kasowitz team along with Ms. Chase of Legal Aid in negotiating this complex transaction. Now we will be able to continue our legacy of service to the community,” said Reverend Dr. James E. Wilson, Jr., the Church’s Senior Pastor since 1974.
Susan H. Chase, Staff Attorney with Legal Aid’s Community Development Project, serves as co-counsel to the Church.
The Kasowitz team representing the Church includes Partner David J. Abrams and Associate Andrew Elkin, as well as Special Counsel David Szeker and Sara Saylor Ho, who handled the real estate closing and development transactions.