A Brooklyn nonprofit run by double-dipping twins has raked in millions of dollars housing homeless families in a dilapidated hotel where residents languish for years — and nature’s ring-tailed bandits run wild, whistleblowers say.
LCG Community Services collects about $4,500 a month from the Department of Homeless Services for each adult family it hosts in its small single rooms at Klara’s Family Residence, a raccoon-plagued shelter in Sheepshead Bay.
The rooms come with two or three beds and a bathroom but no kitchen. And the rest of the place doesn’t get much better.
The hotel has been in a state of disrepair, according to former LCG employees, who told the Daily News that in the past six months ceilings in some rooms collapsed from leaky pipes, mold has been found under carpets and raccoons have scuttled through the lobby and other parts of the building.
Meanwhile, LCG, which is supposed to help residents find permanent housing and provide case-management services, has done little for its clients, the whistleblowers say. LCG’s top executives are Mark and Solomon Lazar, the sons of Joseph Lazar, a former political ally of Mayor de Blasio.
Some residents have been at the homeless hotel for more than two years and have gotten no help finding permanent homes, according to internal documents and Melissa Fonseca, a former LCG housing specialist who was fired in April.
Fonseca told The News that LCG hired her to work at Klara’s in late January to help find permanent homes for residents. Three days into the job, she found serious deficiencies. Residents’ case files, she said, had little, if any, paperwork inside them.
Days before she was fired, Fonseca alerted DHS in emails and phone calls about her concerns that LCG didn’t do much for its clients.
“I am surprised and disgusted that DHS contracted with people like this,” said Fonseca, who worked as a housing specialist and case manager in homeless shelters for five years before she started at LCG.
“They weren’t there to serve the clients at all.”
On Wednesday, two days after The News asked DHS about Klara’s and LCG, the homeless agency said it would shutter the hotel shelter by the end of August. The agency said it had been aware of the shelter’s shortcomings and had already been reviewing the site.
“The conditions described are beyond unacceptable,” the agency said in a statement.
“Homeless New Yorkers working hard to get back on their feet deserve far better, which is why we’ll be officially exiting this location once and for all.”
DHS previously announced that it plans to phase out all of LCG’s cluster sites — private apartments used to house homeless families — by June 30.
LCG inked an $11 million contract with DHS in 2015 to run Klara’s until June 30, 2019. So far it has been paid nearly $7 million. Melissa Krantz, an LCG spokeswoman, said in a statement that until two or three months ago, DHS never gave LCG a target number of how many families needed to be placed in permanent homes.
She said she did not have a number of how many residents LCG placed in permanent homes in 2017. However, she said that since March 2018 two families have been relocated into homes and a home for a third has been identified.
Klara’s has about 100 residents living in some 60 rooms. Internal records show approximately 30 residents have been at the shelter for more than a year.
A resident — who The News is not naming — said he had been at the shelter for several months and has gotten little help from LCG. In the time he’s been there, he said, he’s only seen a case manager three times and a housing specialist once.
The resident is frustrated because he frequently sees management park expensive cars like a Jaguar, BMW and Mercedes Benz in the hotel’s lot.
“They don’t got no Toyota Camry,” he said.
Krantz said Fonseca is a disgruntled former employee who was fired for using racist language against a co-worker.
Fonseca denied using racist language. She said she was told she was fired for disorderly conduct but the real reason was because she asked questions and stuck up for the clients.
Other former co-workers backed up Fonseca’s account. A supervisor who spoke anonymously also said Fonseca did not act like a racist.
Last month, The News wrote about the Lazar brothers, who earn two incomes apiece from housing the homeless.
Each collects $249,000 a year as executives of LCG. The nonprofit also pays millions of dollars a year to the Lazars’ for-profit company, Razzal Hospitality and Management, to manage and provide maintenance at buildings where they house the homeless. Razzal manages Klara’s.
A former maintenance worker for Razzal provided photos of collapsed ceilings in rooms and a hallway of Klara’s that he said were due to leaky pipes. The roof also had to be replaced because it leaked, the worker said.
He also said carpeting throughout the hotel had to be ripped up because of mold beneath it.
The ex-maintenance worker additionally provided pictures of raccoons that had been trapped in a storage room in the hotel.
“That building has been riddled with raccoons for some time,” said the former worker.
LCG also had a current case manager at Klara’s speak to The News. The manager, David Lester, said the nonprofit has made progress in helping clients in recent months.
“We are maybe one piece away from being a well-oiled machine,” Lester said.
He said he had never been a case manager before being hired in January and that he and Fonseca had been brought in to “dispel the negative or prevailing culture that was here.”
“There had probably been a period of a lack of movement, a period of stagnation. I think everybody knows that,” Lester said.
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