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1AST MiDTOWN PIAZA
HOUSING COMPANY, INC.


319 EAST 24th STREET • NEW YORK, N.Y. 10010 TEL (2121 6^9-434:
FAX (212) 639-7635
27, August 2007 To All Cooperators.
Subject: Assessment and Maintenance Increases
The purpose of this memo is to clarify for all shareholders the current economic condition of EMP. Several flyers have been issued recently by a small group that has made outlandish accusations or has twisted the facts to conform to their particular agenda. The Board believes shareholders deserve a simple, straightforward and truthful response.
Every Board member wanted to avoid the increases. After all, we have to pay them, too. But the facts required making a difficult decision that was needed to keep EMP financially sound. It is a fact that many of the same people who are criticizing these increases now, have criticized prior Boards for not increasing maintenance and properly maintaining EMP over the years. Fuel, insurance, employee wages and other costs have skyrocketed over recent years. It is simply childish to believe or argue, as this small group now seems to be doing, that increases or assessments are not necessary. The increases are needed, and HUD agrees.
Assessment: The Board voted to request an assessment of 20% of the annual maintenance on September 25, 2006 as was reported in the minutes. The Board also issued a special notice to all shareholders on October 16, 2006.The assessment required HUD approval; hence, the Board officially in writing requested approval on January 19, 2007. Management's memo of July 24, 2007 notified all shareholders of the assessment to be paid in 3 equal payments on August 1, Sept. 1 and Oct 1. Please note that although the Board requested an Assessment of 20%, HUD approved an increase of only 10.5%, slightly more than half of our request. Therefore, the approved assessment will not cover half our bills. HUD advised us to apply for the balance from our reserves. We will still be behind in paying our bills.
Maintenance Increase: On July 11, 2007, the Board formally requested a 44% increase in maintenance based on HUD guidelines for maintenance increases. If the higher increase were approved, our agent, a former HUD executive, assured the Board that it was not obligated to impose the full amount. The advantage to requesting the higher increase was that EMP would have saved the costs and approval time of re-applying to HUD rf in future years we need additional money. In fact, HUD approved a 26.5% increase on August 9, 2007. The Board notified all shareholders in our Memo of August 14, 2007 that a 20% increase would be imposed on November 1, 2007 after the assessment is fully paid. At no " 'AU- o^ard intend to impose a maintenance increase other than
The Board was elected by the shareholders to properly manage EMP and act in their best interest. The Board has a fiduciary responsibility to keep EMP financially sound, and both increases are required to do that. They are needed to pay our outstanding bills and the expected costs of maintaining our property. They are not for the major construction needed to repair our deteriorating buildings. We still need to raise $20 to $26 million dollars for these repairs.
Until now, the privatization issue has been one of ideology and what kind of monetary impact privatization will have on cooperators. It is unfortunate that a small group of mean-spirited members of the anti privatization group have now decided to make unwarranted and unsubstantiated personal attacks on the Board of Directors. These smear tactics are what an organized group with a fundamentally unpopular agenda uses to change the subject.
J^jrold B Fox
President
Board of Directors