air_conditioning_and_other_fees

MUTUAL REDEVELOPMENT HOUSES, INC. 570 Grand Street, New York 2, N.Y. December 7, 1960 Dear Cooperator: In July we advised you that we had a plan under con­ sideration to introduce central air cooling in the cooperative development of the ILGWU Houses. This would provide air cooling for the entire apartment rather than a single room and would eliminate the necessity of the individual cooperator purchasing his own air conditioning unit.

From the replies we received from cooperators as to the desirability of such an installation, 79% of the returns were in favor of the installation and expressed willingness to subscribe to a debenture bond issue. 21% were against or non-committal.

The replies that we received were based on a maintenance charge of up to $1.50 per room per month. During the last few months a great deal of time was given to the determination of the cost of the initial installation as well as the sub­ sequent costs of maintenance. A plan has now been developed that shows we are in a position to reduce the additional utility charge to 75¢ per room per month $ We therefore feel that the number of cooperators who would favor air cooling would be even higher.

The plan as presently developed is as follows: 1. Each apartment would be equipped with-a radiator that would supply heat in the winter and 9001 air in the summer.

2. For the time being the plan for installation of machinery for generating electricity in the development would be delayed. This would reduce the ca�ital investment to only $1,500,000, instead of $2,500,000 to $3,000,000.

3. To raise these funds, ten year debenture bonds paying an interest rate of four per cent would be issued and our member-cooperators would be asked to subscribe. The Housing and Redevelopment Board, under whose supervision the project is being built, has approved the issuance of such bonds.

4. Until such time as the cooperators will have completely supplied the funds needed, the International Ladies' Garment Workers' Union has agreed to underwrite the amount short up to $1,000,000. This will make it possible for the work to proceed without delay. The bonds to be issued to the Union will pay 5%.

In our opinion this presents a wonderful opportunity to provide air conditioning at a very low cost, an opportunity that -- if we miss it at this time -- will not occur in the future.

We are enclosing for you a subscription blank, to­ gether with a legal explanation from our attorneys of the bond offering, and we would appreciate your returning the subscription agreement with your bond subscription, a check or money order made out to Mutual Redevelopment Houses, Inc. in any multiple of $250., but not less than a minimum of $500.

Cooperatively yours, MU'I'UAL REDEVELOPMENT HOUSES, INC. ( ILGWU Houses) �� President

MUTUAL REDEVELOPMENT HOUSES, INC. Subscription Agreement Limited to Residents of the State of New York I'-----,-,,,..--------.---------,. hereby ( Please Print) subscribe at the prlncipal amount thereof for 4% Ten-Year cumulative Income Debentures (hereinafter called "the debentures") of MUTUAL REDEVELOPMENT HOUSES, INC. (herein­ after called the "Housing Company"), in the amount of

$__________ •

I am enclosing herewith my check or money order in the above amount in full payment of the su-oscription price.

I understand that the debentures will be issued as of the date the Housing Company receives the subs-cription price and that interest will accrue from such date. No payment of interest will be made until the expiration of at least one year subsequent to the date on which all residential buildings in the Project of the Housing Company are fully occupied.

Please issue the income debentures registered in the name(s) of ( Please Print) The Housing Company reserves the right at any time prior to the :lssuance of the debentures, for any reason deemed sufficient by the Housing Company in its sole discretion-. to repay the amounts theretofore paid on this subscription without interest, and upon such repayment all rights of the subscriber under this agreement shall cease and terminate.

I represent that I am a bona fide resident of the State of New York and that said debentures are not being purchased for resale to non-residents of the State of New York.

Dated:

New York, New York .1960.

Signature of Subscriber

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Address

MUTUAL REDEVELOPMENT HOUSES, INC. 570 Grand Street New York 2, N. Y. OFFERING CIRCULAR Limited to Residents of the State of New York To the Prospective Tenant-Cooperators of I.L.G.W.U. HOUSES: In view of the overwhelmingly favorable response to the recent questionnaire, the Board of Directors of Mutual Re­ development Houses, Inc. (hereinafter referred to as the "Housing Company 11 ) has decided to include a central air­ conditioning system, provided the tenant-cooperators will assist in the financing thereof, as more fully outlined later. It is proposed to modify the plans of the Project to provide for a central steam-operated system circulating hot water for heat in winter, and cold water for cooling in summer. The charge for utilities in each apartment would be increased by 75¢ per room per month for the cost of the program.

The installation of such central air-conditioning sys­ tem will cost approximately an additional $1,500,000, 1n which case the steam generation facilities are to be installed upon construction of the project. If, however, steam is to be pur­ chased from New York Steam Company, the increase in cost of the installation could be reduced to $1,000,000, but in that case, the yearly maintenance of this program would be considerably higher. Whether the Housing Company will install its own steam generating facilities will depend on the extent to which the tenant-cooperators assist in the financing of the air-condition­ ing program.

The Board of Directors has approved the issuance of not to exceed $1,500,000 4% Ten Year Cumulative Income Debentures for purposes of the program.

As a prospective tenant-cooperator you are now being asked to subscribe to the purchase of these Debentures . Siab­ scriptions will be received in multiples of $250.00, but not less than a minimum of $500.00.

Interest on the Debentures will be cumulative and payable annually on October 1st at the rate of 4% per annum, from the date of ihe issuance of the Debentures, payable, however, only out of 11 Available Earnings 11 as of the preceding June 30th as defined in the Agreement between the City of New York and the Hous­ ing Company dated as of March 25, 1959. This provides as follows:

I

"'Available Earnings' shall mean the accumulated eai-•nings of the Housing Company for the period commencing with the date of its incorporation and ending on the date as of which earnings are to be determined, after deducting, or excluding from income, (l)all expenses, taxes and assessments paid or accrued for such period, (2) all rent rebates, (3) all interest, (4) amortization on the mortgage loan, (5) depreciation to the extent� if any, that it exceeds such amortization and (6J all interest and dividend payments on the debentures and stock of the Housing Company made out of earnings during such period."

The Debentures shall be issue d to subscribers as of the date on which their payment of the subscription price is received by the Housing Company and interest will accrue from such date. No pay1;1ent of interest will be made until the ex­ piration of one year subsequent to the date on which all the residential buildings in the Project of the Housing Company have been fully occupied.

After repayment of the advances of the International Ladies' Garment Workers' Union discussed below, all or any of the Debentures may be prepaid at the option of the Housing Company at any time at the face value, plus accrued unpaid interest.

The Debentures will be payable at the office of the Housing Company. They will be in registered form, and the Housing Company will act as the registrar and transfer agent.

In order to enable the Housing Company to proceed with the arrangements for a central air conditioning system while the necessary funds are being raised from the tenant­ cooperators, the International Ladies r Garment Workers' Union 1s willing to advance to the Housing Company an amount not exceeding $1,000,000 to temporarily help finance this program.

Any amounts advanced by the Union and its affiliates will be evidenced by 5% Five-Year Cumulative Income Debentures. These Debentures may also be prepaid at any time, in whole or in part, at their face value plus accrued interest, and are to be paid before the debentures offered herein. No interest may be paid on the Debentures to be issued to the subscribers so long as any interest is unpaid on the Debentures issued to the Union and its affiliates.

Notwithstanding the cooperation of the Union, the Housing Company will hot embark upon the central air condition­ ing program unless it receives the substantial subscription to the Debenture issue from the prospective tenant-cooperators indicated by the replies to the questionnaire.

To subscribe to the Debentures, please complete and sign the enclosed Subscription Agreement and return it without delay to the office of the Housing Company, together with a check or money order for the Subscription price.