SPRINGFIELD — The treasurer of a North End economic development nonprofit claims its president and director, Heriberto Flores, has siphoned off resources for his own benefit, imperiling the organization’s ability to serve residents.
The allegations are laid out in a civil lawsuit filed Thursday in Hampden Superior Court by Cecilio Rivera, treasurer of the Brightwood Development Corp.
The action seeks to prevent Flores and other defendants from pursuing the sale of assets still held by Brightwood, including the Jefferson Avenue School Apartments at 1368 Dwight St.
Brightwood has promoted economic development in the largely Hispanic neighborhood since its founding in 1977.
Residents of the apartments turned out Sept. 26 to protest a planned sale of buildings by Flores. The filing seeks a court injunction to prevent the Jefferson Avenue housing sale until the matter is reviewed by state Attorney General Andrea Joy Campbell or the court.
The 18-page complaint alleges improperly Flores used his role as president of the Brightwood board to steer proceeds from recent property sales to the New England Farm Workers’ Council, a different nonprofit that Flores also controls as chairman, president and CEO of Partners for Community under a management contract.
“We don’t have a lot left,” Rivera said of the assets of Brightwood. “There’s no equity any more. The operation is really going to be on a string. That’s why we have to defend what we’ve got.”
Rivera has served as a Brightwood director and as its treasurer for 18 years.
Flores could not be reached Friday for comment; his phone’s voice mailbox was full and not taking messages. He did not respond to a text offering him a chance to speak to the allegations.
At the Sept. 26 protest outside the Partners for Community office, he defended the property sales, saying he needed to pay down debts and obligations.
“I need a buyer with money and juice,” he said.
A message left with William Bennett, the attorney who represents the farm workers’ council, was not immediately returned.
Campbell, the attorney general, is also named as a defendant due to the role her office plays in overseeing the proper functioning of nonprofits in Massachusetts. A request for comment is pending.
Other defendants are members of the Brightwood board, including Sueleika Acevedo, who the filing identifies as Flores’ niece, and Daniel M. Knapik, the former Westfield mayor who was named Brightwood’s clerk and has played a public role in the sale of assets overseen by Partners for Community, including properties owned by Brightwood.
Knapik also serves as executive director of Partners for Community, where he is helping Flores shed properties acquired over many years, including the sale this month of 1628-1640 Main St.
A phone message left Friday for Knapik was not immediately returned. In an interview last week with The Republican, Knapik said the sale of Brightwood’s Jefferson Avenue housing to Peabody Properties Inc. is moving ahead, despite the challenge from tenants.
Rivera’s complaint alleges a campaign of “self-dealing” by Flores that drew away resources from nonprofits that came to be controlled by Partners for Community. Flores has acknowledged that the farm workers’ council, which he founded half a century ago, is in debt and needs rescuing.
The plaintiff claims nonprofits that came under Flores’ control “have been used to financially support NEFWC and other affiliate members after the loss of government-terminated funding.”
Brightwood became subject to a Partners for Community management agreement in 2017, putting Flores in the driver’s seat. Within three years, the filing says, Brightwood’s bylaws were being violated, including not holding annual or regular meetings.
“Following affiliation with Defendant [Partners for Community], there has been a marked decline in [Brightwood Development Corp.] operations in that it no longer operates local employment and training programs,” the complaint says.
“[Brightwood] no longer engages in new development projects; it no longer applies for new grants or community programs in the North End. … and its properties have been liquidated without accountability for the funds” to Brightwood by Partners for Community and the farm workers’ council, the filing says.
Along with managing farm workers’ council property sales, Knapik has been tapped to sell lots on Plainfield Street, Worcester Avenue and at the corner of Brightwood Avenue and Plainfield Street, according to Rivera.
Rivera’s complaint argues that Brightwood’s board took improper votes because it was in violation of its bylaws. It claims Knapik’s appointment is invalid.
Claim of ‘systematically depleting’ fund
Apart from Brightwood’s plight, Rivera claims actions by Flores pulled money from a different nonprofit, the North End Educational Development Fund. It too falls under Partners for Community management.
Rivera says that like the Brightwood board, the NEED panel, led by Flores, operated in violation of its bylaws by acting with an insufficient number of members. Three of the defendants, including Flores, “have consistently made so-called binding decisions for NEED over Plaintiff’s objections based on this improper constitution of the Board and in violation of the By-Laws,” the filing states.
In one instance, it claims, Flores and two other defendants approved a resolution that granted $400,000 of NEED monies to the farm workers’ council. Though characterized as a loan at 4% interest, no terms were given for when it would be repaid, the filing says.
Further, it argues that loaning $400,000 to the council was not allowable under the NEED bylaws.
It also alleges that the board moved to grant retroactive approvals for scholarships awarded in 2020, 2021 and 2022, though the complaint notes no board meetings were held during those years.
In March, Rivera sent a letter to Flores and two other NEED board members, Luz DeJesus and Ronald Krupke, requesting a copy of the management agreement between the nonprofit and Partners for Community.
“As treasurer … I hereby withhold my vote on any current and future business related to NEED until an accounting and review of all transactions related to the disposition of scholarship funds is complete,” Rivera wrote March 6.
In the complaint, Rivera says he has asked that the defendants “cease and desist violating the Bylaws and systematically depleting the assets of NEED … [and] misuse of NEED assets to the detriment of NEED, its members and the North End Community.”
The filing asked the court to invalidate the loan to the farm workers’ council and to bar it from selling or transferring assets.
Bid to block sale of residential properties
On the real estate front, the filing asks the court to prevent the planned sale of the Jefferson Avenue School Apartments, a 43-unit HUD Section 8 development in a former city school, and the 41-unit Borinquen Apartments on Main Street.
The Jefferson Avenue complex is a sponsored development of Brightwood Development Corp. The Borinquen building is a development of the farm workers’ council, with Flores himself a part owner through Flores Development LLC.
The Borinquen block had been owned by Brightwood, but was transferred to the control of the farm workers’ council, according to a person familiar with the transaction.
In a July 28 letter of intent, Peabody Properties and Affordable Housing and Services Collaborative Inc. proposed to pay $1,425,000 for both housing locations, plus assume debt associated with the properties.
The court complaint argues that though the proceeds would go to the farm workers’ council, that group “has no ownership interest” and such a deal would be a violation of the Jefferson Avenue School Associates Inc. bylaws.
Those proposed Jefferson Avenue sale would further drain Brightwood’s real estate assets, following the March sale of its headquarters at 2345 Main St. The property was assessed at over $300,000 and sold for $85,000.
That transfer followed an earlier unloading of Brightwood assets at Flores’ direction.
In March 2020, Brightwood’s holding in the Centro De Salud Medical Building at 380 Plainfield St. was sold. The medical building property was assessed at over $3 million and transferred for $1.4 million to Baystate Medical Center, the complaint says, “at grossly under market value.”
Net proceeds from the closing of $851,654 were paid to the farm workers’ council.
And in December 2021, the council sold Brightwood’s Plaza Del Mercado shopping area at 2460 Main St. to a property manager, Morgan Kaylee Corp., for $800,000. Proceeds of $294,395 went directly to the council.
