Valley Stream church in foreclosure battle

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When John Millwood, the senior pastor of the Apostolic Church of God 7th Day closed in late 2016 on the West Merrick Road property that would house his more than 200-member congregation, he said he felt it was God’s will for the group.

Formerly housed out of a storefront in St. Albans, Queens, the church and its leadership had been in search of a new home since at least 2010, Millwood said. He had originally tried to buy the building in 2014 when it served as a Knights of Columbus hall, but the deal fell through. Then, as he was nearing the purchase of a property in Hempstead, the opportunity to buy the Valley Stream plot arose again, this time from the Manhattan-based L&L Associates Holding Corporation after it had gained possession of it in December, 2016 through a tax lien purchase for roughly $200,000, according to land-sale records.

“We were pretty convinced, the fact that the opportunity came back; it was destiny, we felt,” he said.

Then, in October, 2017 L&L sued to foreclose on the church.

Millwood had paid L&L roughly half of the $725,000 sale price in cash, and took out a nearly $363,000 three-year mortgage for the remainder, according to court filings with the New York State Supreme Court.

He said he dutifully gave L&L his mortgage payments every month for a year, hand-delivering checks to the firm at its Garden City office. But while he was applying to Nassau County in November 2016 for tax-exempt status on the church, unbeknownst to Millwood, for four months, county and village taxes had begun to accrue on the property.

“They stamped it, and told us we were good,” Millwood said of the county officials. “We thought everything was fine.”

It wasn’t until next September that L&L stopped taking mortgage payments, and Millwood said he realized something had gone wrong. Soon, he received a letter that L&L was foreclosing on the property, and that he would need to appear in court. The letter, however, did not disclose the reason for the foreclosure, and it was only later that the county notified him that he had unpaid tax bills.

The church had owed roughly $83,000 in county taxes and nearly $18,000 in village taxes. Already strapped for cash after paying for half the property, Millwood went to his congregation to fundraise and pay the back taxes.

“We thought that by paying the taxes, it would make the problem go away,” he said, and county officials told him that pending the passage of a state bill that would retroactively grant the church tax-exempt status for the period when the county was processing its application, he would be reimbursed.

State officials said they expect to pick up Senate and Assembly versions of the bill during the next legislative session starting in January.

The Nassau County treasurer reported the receipt the taxes owed to it in February, 2018, and the village reported the receipt of the taxes it was owed in April.

At this point, however, L&L has said it is not interested in whether or not the taxes have been paid, according to court documents. Instead, it is seeking interest, punitive and attorney fees of roughly $70,000, arguing that the Apostolic Church had violated the terms of the mortgage and jeopardized L&L’s investment in the property, according to Christian Browne of the Uniondale-based law firm Sahn, Ward and Coshignano, and the church’s attorney.

“As soon as they found out taxes were technically in default they sued them for foreclosure,” Browne said. “Instead of calling and saying ‘I have a tax bill.’ He says, ‘Oh that’s a default under the terms of the mortgage.’ So they sue, immediately.”

Browne sought in late August a summary judgment from Nassau County Supreme Court Judge Arthur Diamond to have the foreclosure thrown out. Instead, he issued a summary judgment on behalf of L&L, saying that the church had violated the terms of the mortgage, and that the foreclosure proceedings could continue.

In his decision, Diamond wrote that Millwood and his congregation had made every attempt to rectify the situation, and would likely be refunded the missed tax payments pending the passage of state legislation. “Thus, in the interest of justice, this foreclosure matter should be dismissed.

“Unfortunately, the evidence before the court does not support such a decision in the interest of justice,” he continued, saying that the terms of the loan as presented to him did not contain a catch-up provision to allow the church to take care of outstanding tax payments.

Now, the future of the church building is in doubt, with congregants and leadership expressing anxiety over the foreclosure’s outcome.

At a recent Sabbath — held on Saturday as part of 7th Day Protestant tradition — Glenda Clarke, who has been worshiping with the church since 1996, said she felt Millwood and the congregation had been taken advantage of.

“[L&L] recognized the areas where we’re vulnerable,” she said, “and after meeting the financial needs they were looking for, now they’re thinking, ‘all right let’s see what else? Let’s keep pushing and see what we can get from them.’”

Peter Philippe, an associate pastor at the church, said that while the surrounding Valley Stream community has been largely welcoming, he acknowledged how vulnerable religious organizations could be when it came to securing real estate.

“Banks find it a bit difficult to give out loans to churches because of changing membership and how we bring in money,” he said. “I think [L&L] is sort of taking advantage of that situation.”

A spokesperson for L&L did not return a request for comment.

Browne said he had filed a motion in a Brooklyn appellate court, seeking a stay on the foreclosure pending an appeal on Diamond’s decision. But even if they manage to overturn the foreclosure, Millwood said the church would still have to make up nearly $100,000 worth of mortgage payments, plus interest that L&L had refused to take.

“I’m not going to say we’re scared,” he said, “but we’re very concerned.”

Clarke, who still has high hopes to use the building to not only to house the congregation, but to also host resources such as self-help and GED classes said the situation was devastating.

“When you take a leap of what we understand as faith, and you jump out and hope, hoping that things are going to work out, and then be met with this form of deception,” she said, “it can be very defeating.”