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DPU sets new limits to rates of interest on overdue bills

Boston Herald; Boston, Mass.; Oct 1, 1994; JEFFREY KRASNER;

Abstract:
The DPU's order comes in response to a request from Alphonse Mourad, owner of the Mandela Apartments in Roxbury. For years, Mourad has waged an angry battle against Boston Edison, alleging that the utility has overcharged the complex and generated excessive and inaccurate bills. He claimed that he had overpaid his bills by $29,000, but that Edison refused to disclose its accounting records.
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Copyright Boston Herald Library Oct 1, 1994
Commercial customers with overdue accounts at local utilities will see their total bills grow more slowly thanks to the efforts of the owner of a Roxbury apartment complex who has had a long battle with Boston Edison.
The Department of Public Utilities this week instituted new limits on the rate of interest gas, electric and phone companies can charge to their past due commercial accounts.
Instead of a flat 18 percent interest, the utilities' maximum interest will be set at the two-year Treasury bill rate plus 10 percent. The new rate, which goes into effect Nov. 1, will drop to 14.05 percent.

The DPU's order comes in response to a request from Alphonse Mourad, owner of the Mandela Apartments in Roxbury. For years, Mourad has waged an angry battle against Boston Edison, alleging that the utility has overcharged the complex and generated excessive and inaccurate bills. He claimed that he had overpaid his bills by $29,000, but that Edison refused to disclose its accounting records.

In its order, the three DPU commissioners argued that late payment interest charges should remain relatively high.

"While it is one of the Department's goals to make late payment charges more reflective of current interest rates, it is also important to ensure that late payment charges remain high enough to deter delinquent payment of accounts."
They rejected a proposal to let rates float at 8 percentage points over the two-year Treasury bill, and instead adopted a 10 percent premium, to be computed Feb. 1 of each year.
The order does not affect overdue accounts for residential customers, on which utilities are prohibited from charging interest.
But the commissioners warned utilities against harassing customers, saying it "expects companies to suspend late payment charges where a customer has a good faith and reasonably grounded dispute on billed amounts, and abate late payment charges where the amount in dispute is determined to be erroneous."

Mourad is also in federal court, fighting a request by Boston Edison that the 276-unit apartment complex be placed in receivership.
The DPU has permitted 18 percent interest since the 1970s. Victor Aronow, attorney for Mourad, said 18 percent interest is no longer justified.
DPU Chairman Ken Gordon said yesterday he favors considering a change in the rate of interest charged.

But Gordon rejected the notion that compound interest is unfair. "This is common practice and has been since Roman times."
Unpaid bills are usually added to the basis used in utility rate requests, he said. "The commission's sympathy goes out - not to the company's shareholders - but to ratepayers."
Residential customers cannot be charged compound interest. The DPU treats Mandela as a business because apartments do not have individual meters.
Edison spokeswoman Sheila Eppolito said the company will not publicly discuss any issues between itself and any particular ratepayer. However, she said the utility has complied with regulators.

"It is up to the DPU how we charge customers and the rate we charge. All that has to be approved by the DPU."

Aronow said a study by the Goodman Group shows Edison's billing practices have been unreliable. "We believe there's a question of whether V&M really owes anything at all."
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Court agrees Mandela landlord owes $190G


Boston Herald; Boston, Mass.; Jul 8, 2003; Jerry Moskal; Abstract:

Documents in the 2-year-old case said [Alphonse Mourad] was the sole owner of V&M, a Subchapter S corporation in Watertown that owned the 276- unit Mandela Apartments on Washington Street in Roxbury. V&M went bankrupt.

"We agree with respondent that (Mourad) is obviously confusing V&M Management with himself," [Robert P. Ruwe] wrote. "The record demonstrates that V&M Management, and not (Mourad), filed a petition for reorganization in bankruptcy."

The IRS had claimed that Mourad realized an almost $2.1 million capital gain on the sale of V&M's assets in 1997. Mourad denied that he received any of the proceeds from the sale of V&M.

Copyright Boston Herald Library Jul 8, 2003
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WASHINGTON - Alphonse Mourad, former landlord to Boston's indigent, may become $189,745 poorer himself under a recent U.S. Tax Court decision.

On Wednesday, Judge Robert P. Ruwe upheld an Internal Revenue Service ruling that he owed taxes on the $2.1 million in proceeds from the sale of his bankrupt company, V&M Management Inc. Mourad, a Hyde Park resident, said he plans to appeal the ruling.

"I'm also going to sue the IRS for more than $20 million," he said. But Mourad said he can't afford a lawyer and hopes that one will agree to represent him on a "pro bono" basis.

Mourad has 90 days after Ruwe issued his 13-page opinion to appeal.

Documents in the 2-year-old case said Mourad was the sole owner of V&M, a Subchapter S corporation in Watertown that owned the 276- unit Mandela Apartments on Washington Street in Roxbury. V&M went bankrupt.

Mourad contends that Beacon Management, which now runs the apartment building, and the V&M bankruptcy trustee, Stephen S. Gray, should pay the back taxes and penalties.

However, Ruwe agreed with the IRS that while Mourad's former company filed for bankruptcy Jan. 8, 1996, Mourad was not granted personal bankruptcy protection.

"We agree with respondent that (Mourad) is obviously confusing V&M Management with himself," Ruwe wrote. "The record demonstrates that V&M Management, and not (Mourad), filed a petition for reorganization in bankruptcy."

Mourad claims he never received any proceeds from the sale of his bankrupt company. He charged that Beacon and not he got the benefit of a $17 million low-income housing tax credit.

"If (Beacon) becomes the owner and he gets the tax credit, why doesn't (Beacon) pay the taxes?" he said last week.

The IRS had claimed that Mourad realized an almost $2.1 million capital gain on the sale of V&M's assets in 1997. Mourad denied that he received any of the proceeds from the sale of V&M.

An IRS spokesman declined to comment on the case.
Mourad, a Lebanese immigrant, has created a Web site - www.bostonmandelascandal.com - to tell his story.
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Beacon, residents to own Mandela

Boston Herald; Boston, Mass.; Sep 27, 1997; BERNARD WOLFSON;

Abstract:
Opening a new chapter in the troubled history of lower Roxbury's Mandela housing development, a federal bankruptcy judge yesterday awarded the project to a new partnership owned jointly by Beacon Properties and Mandela's tenants.
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Copyright Boston Herald Library Sep 27, 1997
Opening a new chapter in the troubled history of lower Roxbury's Mandela housing development, a federal bankruptcy judge yesterday awarded the project to a new partnership owned jointly by Beacon Properties and Mandela's tenants.
Bankruptcy Judge Carol J. Kenner's ruling cut all ties between Mandela and its former owner, Alphonse Mourad. Mourad lost the housing project to a court-appointed trustee after he filed for a Chapter 11 bankruptcy reorganization last year amid charges of gross mismanagement.
The new limited partnership between Beacon and the Mandela Residents Cooperative Association gives each 50 percent equity. The tenants group can buy out Beacon for $1 within five to seven years.

The partnership has a capital budget of $18 million, including $4 million for Mourad's creditors and $11 million to renovate the 276-unit, 10-building affordable housing project. A consortium of investors will put up the $11 million to obtain tax credits.
Mourad charged that the tenants were being duped by Beacon, the city of Boston and the state. He said they want the site for more lucrative commercial development.
But the deal stipulates that in exchange for tax credits, Mandela must remain an affordable housing development.
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Councilors press BRA on $200G pledged to low-income tenants

Boston Herald; Boston, Mass.; May 5, 1995; DAVID WEBER;

Abstract:
Two city councilors are demanding Boston Redevelopment Authority records to explain what happened to $200,000 pledged to preserve affordable housing for a group of subsidized Roxbury tenants.

But BRA director Marisa Lago said there is a simple reason why the money was never given to the tenants when it was promised by former BRA officials in 1986.
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Copyright Boston Herald Library May 5, 1995
Two city councilors are demanding Boston Redevelopment Authority records to explain what happened to $200,000 pledged to preserve affordable housing for a group of subsidized Roxbury tenants.

But BRA director Marisa Lago said there is a simple reason why the money was never given to the tenants when it was promised by former BRA officials in 1986.

Lago said the $200,000, part of a sum residents at the Mandela development hoped to use to establish a tenant-owned cooperative, was dependent upon landlord Alphonse Mourad selling the property in 1986. That sale fell through.
Under the agreement at the time, Lago said, the BRA was free to use the $200,000 for other affordable housing projects if the Mandela development, formerly known as Westminster-Willard, received other subsidies.
Lago said that condition was fulfilled when the federal Department of Housing and Urban Development subsidized 100 percent of the units there.

However, councilors Richard Iannella and Gareth Saunders said the BRA, whose five board members are appointed by the mayor (four) and the governor (one) is not accountable. The councilors said they want a detailed accounting of how the $200,000 was spent.

"These people (tenants) feel neglected and they want to know what happened to the money," said Iannella, chairman of the council's Planning and Economic Development Committee.
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Developer sues for late fee changes

Boston Herald; Boston, Mass.; Dec 22, 1992; MICHAEL E. KNELL;

Abstract:
[Alphonse Mourad] blamed late penalties and compound interest - which are not charged to residential customers - for much of V&M's huge utility debts.

Mandela Apartments include 276 units and about 1,500 low-income tenants. Mourad has argued that the definition of commercial customer is too broadly interpreted.

Mourad filed a complaint with the DPU in February. He said he went to court because the DPU would not issue a decision on his request for changes.
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Copyright Boston Herald Library Dec 22, 1992
The developer of the Mandela Apartments has sued state officials and local utilities, asking for changes in how late fees are assessed.
V&M Management Co. and its president, Alphonse Mourad, last week filed suit in Superior Court against the state Department of Public Utilities, Boston Electric Co. and Boston Gas.
The suit asked that interest rates be dropped from their current 18 percent, that utilities be forbidden from charging compound interest and be forced to read meters each month rather than issue estimated bills.

Mourad blamed late penalties and compound interest - which are not charged to residential customers - for much of V&M's huge utility debts.
Mandela Apartments include 276 units and about 1,500 low-income tenants. Mourad has argued that the definition of commercial customer is too broadly interpreted.

DPU officials declined comment. The office of the Attorney General, which often represents state agencies, also washed its hands of the matter.
"We don't ordinarily represent the DPU in disputes against individual ratepayers," AG spokeswoman Elizabeth Hyman said.
Boston Edison spokesman Michael Monahan declined comment on the specifics of Mourad's case, but issued a defense of Edison practices.

"The procedures which we use are all in accordance with state regulations," he said. "Most importantly, the procedures are in place so that customers who do pay their bills in a timely fashion do not subsidize those who choose not to."

Mourad filed a complaint with the DPU in February. He said he went to court because the DPU would not issue a decision on his request for changes.

Landlord cries foul over late fees Slams 18% interest charged by Edison
Boston Herald; Boston, Mass.; Dec 2, 1992; MICHAEL E. KNELL;
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Alphonse Mourad, controversial owner of several properties including 1,500-unit Mandela apartments on Washington Street in Roxbury, argues that the 18 percent interest charged on late payments could kill his business and others that fall behind.

Utility officials will not discuss Mourad's situation, but they reject the notion that their billing is unfair. After supplying a product and a service, it costs utilities money when the bill isn't paid, [William Lippincott] said.

Mourad filed a complaint against both Edison and Boston Gas with the Department of Public Utilities, asking officials to revise rates for late payments.
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Copyright Boston Herald Library Dec 2, 1992
One of the city's feistier landlords says his dispute with utilities and state officials is a battle to stop a rip-off 18 percent rate for late payments.

Alphonse Mourad, controversial owner of several properties including 1,500-unit Mandela apartments on Washington Street in Roxbury, argues that the 18 percent interest charged on late payments could kill his business and others that fall behind.

Mourad said he has paid $1.1 million to Edison, but still owes $259,815, including $186,000 in interest.

"What was good in the 1970s when interest rates were high - is that good in 1992 when there is a recession and the prime lending rate is 6 percent?" said Mourad, a veteran of conflicts with local officials.

"They respond, `just pay your bill.' That's not the issue." Mark Cooper, research director of the Consumer Federation of America, agreed that the 18 percent rate is unfair in a time of low inflation and interest rates,

"I think 18 percent is outrageous," he said. "We're outraged that the credit card folks are still getting 18 percent."
But Cooper acknowledged that late payments have skyrocketed.

William Lippincott, manager of credit collection at Boston Edison, said businesses whose payments used to lag a month are often 60 days behind. Those which used to lag 60 days are now three months behind, he said. "It's a reflection of the economy."

Utility officials will not discuss Mourad's situation, but they reject the notion that their billing is unfair. After supplying a product and a service, it costs utilities money when the bill isn't paid, Lippincott said.

Late payment interest makes up for the cost of collecting bills as well as for carrying debts that are never paid, he said.
The rate was last changed in the 1970s. Since then, the Department of Public Utilities has routinely ratified it with each new utility rate case, said director Tim Shevlin. "We could say no, but we don't."

But if rates for late payments are lowered, they would encourage non-payment, he said. "Utilities are not in the business of extending credit. They are not lenders, so it's not relevant that the prime interest rate is only 6 percent."
Besides, if a business doesn't pay for the power it uses, the ratepayers will, Shevlin said.
What utilities should charge depends on how the cost of unpaid bills is defined, Cooper said. Is it the cost of the utility's borrowing short-term money to make up the shortfall? Or it is only the lost income for money the utility didn't have in the bank?

Short-term savings rates are about 3 percent.
Cooper recommends a rate similar to mid-range borrowing rates, now about 12 percent.
Mourad also has wider concerns. He said he believes utilities support city efforts to run him out of business so that Mandela can eventually be leveled as part of a high-profit redevelopment of the area.

Mourad said he fell behind in his utility payments while he was spending nearly $800,000 in legal fees fighting the city and the Boston Redevelopment Authority.

"If they had not cost me that money, I would not owe the utilities money today," he said.
Mourad filed a complaint against both Edison and Boston Gas with the Department of Public Utilities, asking officials to revise rates for late payments.

Landlord sues city housing aide for branding him a `slumlord'
Boston Herald; Boston, Mass.; Oct 28, 1992; JOE SCIACCA;
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Alphonse Mourad, owner of the federally subsidized Mandela apartment complex in Roxbury, is suing [Raymond L. Flynn] housing adviser Peter Dreier for the city official's labeling of him a "slumlord."

Mourad's suit, filed in Middlesex Superior Court, charges that Dreier has also accused the landlord of "failing to pay his bills, corruption, mismanagement, milking, ripping off, taking out improper loans and stealing money."
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Copyright Boston Herald Library Oct 28, 1992
A Boston landlord battling city efforts to seize control of his property has sued a ranking aide to Mayor Raymond L. Flynn for slander, prompting the aide to in turn call him "a kook."
Alphonse Mourad, owner of the federally subsidized Mandela apartment complex in Roxbury, is suing Flynn housing adviser Peter Dreier for the city official's labeling of him a "slumlord."
Mourad's suit, filed in Middlesex Superior Court, charges that Dreier has also accused the landlord of "failing to pay his bills, corruption, mismanagement, milking, ripping off, taking out improper loans and stealing money."
Dreier yesterday dismissed the suit as "harassment," and let loose on Mourad one more time.

"He's a kook. He's basically got his back against the wall and he's going to lose his building," the Flynn aide said.

"The fact that he is a slumlord is not just my opinion. It's based on his track record. Truth is the best defense," Dreier said.

Mourad faces the loss of the Mandela complex in a bid by the city to have the 276 apartments placed into state receivership because of conditions in the development.

Officials have charged that Mourad has failed to keep the development up to safety and health codes, misused federal rent subsidy funds and attempted to stop tenants from organizing.
Mourad has said that receivership would displace low-income tenants and has slammed City Hall for allegedly trying to "gentrify" the neighborhood by replacing Mandela with luxury housing.
He has blamed the city for refusing to negotiate a fair tax for the property in an effort to force him out.

Roxbury landlord denies charge of failure to keep up apartments
Boston Herald; Boston, Mass.; Aug 17, 1994; BILL HUTCHINSON;
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Abstract:
Alphonse Mourad, owner of V&M Management Co., blasted the attorney general's request for summary judgment from Suffolk Superior Court Judge Catherine White that would put his Mandela housing development into state receivership.

Mourad - whose run-ins with city government date back a decade - accused the attorney general's office of helping push a "hidden agenda" to replace affordable housing in Roxbury with luxury housing for middle- and upper-class people.

V&M attorney Victor Aronow said the violations [Leslie Greer] cited were the result of an "overzealous" inspector, who cited missing door stops as criminal violations.
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Copyright Boston Herald Library Aug 17, 1994
The owner of a Roxbury housing development - accused by an assistant state attorney general in court yesterday of being a bad landlord - portrayed himself as a savior of affordable housing and the target of development-hungry politicians.

Alphonse Mourad, owner of V&M Management Co., blasted the attorney general's request for summary judgment from Suffolk Superior Court Judge Catherine White that would put his Mandela housing development into state receivership.
Mourad - whose run-ins with city government date back a decade - accused the attorney general's office of helping push a "hidden agenda" to replace affordable housing in Roxbury with luxury housing for middle- and upper-class people.
But Assistant Attorney General Leslie Greer told the court, "We are here and we were brought into this case four years ago by the tenants."
She said some Mandela tenants complained of poor living conditions and long delays in requested repairs. She also accused V&M of "stifling" tenant attempts to organize.

Inspections of the 276-apartment complex have "found numerous violations of the state sanitation code, the state building code and the state plumbing code," Greer said.
But some 60 Mandela residents at the hearing bristled at the idea of receivership and said it would ruin their opportunity to own their apartments.

Mourad has agreed to sell the complex to a cooperative of residents trying to secure money from the federal Department of Housing and Urban Development.

"The residents definitely want to own their (apartments) and they are willing to fight for it," said Helen Aizprua, president of the Mandela Residents Cooperative Inc.

Aizprua and other residents characterized their relationship with Mourad and V&M as "excellent."
V&M attorney Victor Aronow said the violations Greer cited were the result of an "overzealous" inspector, who cited missing door stops as criminal violations.

"That's what the attorney general's case is all about. It's about screw holes and missing door stops," said Aronow.
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Beacon, residents to own Mandela

Boston Herald; Boston, Mass.; Sep 27, 1997; BERNARD WOLFSON;

Abstract:
Opening a new chapter in the troubled history of lower Roxbury's Mandela housing development, a federal bankruptcy judge yesterday awarded the project to a new partnership owned jointly by Beacon Properties and Mandela's tenants.
Full Text:
Copyright Boston Herald Library Sep 27, 1997
Opening a new chapter in the troubled history of lower Roxbury's Mandela housing development, a federal bankruptcy judge yesterday awarded the project to a new partnership owned jointly by Beacon Properties and Mandela's tenants.
Bankruptcy Judge Carol J. Kenner's ruling cut all ties between Mandela and its former owner, Alphonse Mourad. Mourad lost the housing project to a court-appointed trustee after he filed for a Chapter 11 bankruptcy reorganization last year amid charges of gross mismanagement.

The new limited partnership between Beacon and the Mandela Residents Cooperative Association gives each 50 percent equity. The tenants group can buy out Beacon for $1 within five to seven years.

The partnership has a capital budget of $18 million, including $4 million for Mourad's creditors and $11 million to renovate the 276-unit, 10-building affordable housing project. A consortium of investors will put up the $11 million to obtain tax credits.
Mourad charged that the tenants were being duped by Beacon, the city of Boston and the state. He said they want the site for more lucrative commercial development.

But the deal stipulates that in exchange for tax credits, Mandela must remain an affordable housing development







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