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Court Filing: Longstanding Mamaroneck Church Seeks Bankruptcy Protection

The Strait Gate Church on Madison Street has filed for bankruptcy and the case is now being heard in Federal Court.

Mamaroneck's well-known Strait Gate Church is seeking bankruptcy protection.

The case is now before a federal judge in White Plains, with the next hearing slated for Friday. The Madison Street religious institution quietly filed for Chapter 11 bankruptcy in October, a move that would allow it to reorganize and pay off creditors over time.

The filing cites estimated liabilities of $1 million to $10 million and church assets estimated at the same amount. Among the creditors with the largest unsecured claims are J.P. Morgan Chase, which is owed $75,421, and Body-Lawson Associates, a Manhattan architecture firm, which is owed $68,500.

The church has a long history in Mamaroneck and is known for taking stands on controversial social issues, from homeless shelters to day laborers. Founded in 1932 by Elder John Brown, it is now led by the founder's grandson, Bishop Wayne L. Powell, who took over the church's leadership in 1984.

In the 1970s, Strait Gate opened the first homeless shelter in the county's Sound Shore area, which, according to a news account at the time, closed after strong community protest.

In 2007, the church hosted a day laborer hiring site run by the Hispanic Resource Center, a source of much debate among Mamaroneck officials and residents.

HRC's Executive Director Zoe Colon said today no one at the church said anything openly to them about the court filing.

"I knew they were having financial struggles, but I didn't know they were filing for bankruptcy or even considering it," she said.

Larchmont Patch was unable to obtain comment from Strait Gate. The phone number listed for the church is answered by the Resource Center.

The idea to open the labor site followed a 2006 lawsuit against the Village of Mamaroneck in which six day laborers accused the police of harassment.

"We decided we needed to open a worker center and they were the only ones who came forward and offered their space," Colon said of the church. The HRC did not pay rent. It was a "great partnership" that  showed an alliance between the Hispanic and African American communities, she said.

Since April 1, the labor site is at 623 Mamaroneck Ave., the HRC's new home, so all of the center's programs can be under one roof. The last time Colon spoke to anyone at the church was last week, when they discussed a time to meet so the HRC could thank them for having hosted the site.

Bishop Powell is now closely monitoring the church's current bankruptcy proceedings and is in attendance at the hearings. On Friday the court will hear a petition from Hudson Valley Bank to lift the stay on foreclosure that was issued to protect the church's assets at the time the bankruptcy was filed.

Hudson Valley Bank is the mortgagee for an eight-acre parcel of land owned by the church at 380 Mamaroneck Ave. in Harrison.

Last year, the church decided to develop the land and filed plans for a seven-home development called Harrison Hamlets. Since that time, the church's attorney, who was spearheading the development, has been disbarred, and the project was abandoned due to the bankruptcy.

At stake for the church is not only the vacant lot in Harrison, but any church assets that may have been used to secure the loan.

The church's attorney confirmed they are seeking to block the lifting of the stay. They hope to sell the land in question, thereby gaining some much needed liquidity. It appears, however, that there is only one offer for the land, and that is for a small parcel for a Harrison resident who lives on land adjoining the site and plans to keep the parcel in its natural state.

The church will face difficulties in seeking a commercial developer for the site as there are wetlands and heavy rocks on the site and environmental concerns from Harrison and Mamaroneck residents over flooding issues from the Mamaroneck River, which runs through the site, emptying into the Long Island Sound.

The decision regarding the lifting of the stay of foreclosure will be decided Friday.

In the meantime, the church is continuing to operate as usual.

The church's bankruptcy firm, Rattet, Pasternak and Oliver-Gordon, refused to comment while the case is proceeding.

Sandra Larriva contributed to this report.

Sandra Larriva May 19, 2010 at 08:06 PM
A source has informed Patch that there is currently no hearing date rescheduled as the church is coming up with alternate plans for how they want to dispose of the land. Stay tuned for more info.

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