The Real Estate got a copy of the instructions for the old form that BUILD filed with the IRS last year, and they read pretty much like the new ones. An applicant is only supposed to list grants it has received—or been pledged, if it is using the accrual method of accounting—in trying to prove that it has broad enough public support to qualify as a “public charity.”
“The organization’s public support component will be based on the support the organization has received to date,” the old instructions read.
The IRS gave BUILD a “pending” nonprofit status, according to the organization’s lawyer, Sharai Erima. The status is not unusual, according to tax specialists, as it takes years for an organization to attract broad enough support to convince the IRS that it deserves “public charity” as opposed to “private foundation” status. The latter organizations, which survive on an endowment or receive regular infusions of cash from a few donors, pay excise taxes on investment income.
BUILD and Forest City Ratner deny that any money has changed hands or pledges have been made. Erima told The Real Estate today that he included Forest City’s name and the $5 million figure because under the Los Angeles airport community benefits agreement, one of the few such agreements in existence, a single corporation—Los Angeles World Airports–is paying for the job training at the rate of $3 million a year.
During subsequent negotiations with Forest City Ratner on the Atlantic Yards CBA, Erima said, “We found out that they would not be willing to be the sole funder.”
Erima was admitted to the New York State bar in 1999. His registration, under his old name, Sharai Elegba, is currently delinquent, which means that he cannot legally practice law–although that does not mean he cannot fill out tax forms.
When asked about the registration status, which was confirmed with the court system’s Office of Court Administration as well as the Appellate Division, Erima said, “I have no further comment.”