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November 8, 2002

Dear Shareholders:

The shareholders' meeting to be held next Thursday night, November 12, 2002, could well be the most important meeting our co-op will ever hold. The value of all our apartments, and of the co-op itself, is at risk. I urge you to come to the meeting and to vote for a new board of directors.

1. As most of you already know, the co-op has had to pay the sponsor's legal fees of approximately $367,000 when the co-op lost its case in the federal district court. This is a huge loss for the co-op. Coupled with its own lawyer fees, the co-op has spent approximately half of the year's maintenance receipts on this case. (The board decided to appeal the loss, so the sponsor will also seek its fees on the appeal).

2. Despite all its previous losses and lawyer's fees, the co-op has started a new litigation against me. I am entitled under state law and the co-op's own bylaws to collect my legal fees in this case as well. Lawyer's fees are high, and the co-op will suffer yet another substantial and unnecessary and unnecessary outflow of cash

3. When the board sought to terminate the garage lease, it assured shareholders (1) it would win easily and (2) it would only have to pay minimal legal fees of the sponsor if it lost. Both of these statements have proven to be untrue.

4. The board has had to pay substantial legal fees to its own lawyers - in the federal case, in the appeal of the federal case, and in the new litigation it has brought against me recently. In addition, the board refused to provide me, a shareholder, with the board minutes and list of all shareholders, necessitating more litigation. A court has now ordered the co-op to provide the information to me.

5. The co-op's insurance company now says it won't cover the co-op's losses from all of this litigation against me, because the board neglected to notify the insurer of the claims as required by the co-op's policy.

6. To minimize the financial shock of the large legal fees the co-op incurred, unidentified board members have lent the co-op $200,000 to pay the sponsor's judgment. The board says this is an interest free loan. However, they failed to give other key details such as:

          a.          who were the people making the loan,
          b.          how much did each person lend the co-op,
          c.          when must the loan be repaid
          d.          is there a lien on the co-op for the loan,
          e.          did the bank holding the co-op's mortgage consent to the loan transaction; if not, the failure of the board to get its consent may constitute a default under the mortgage.

7. The shareholders are entitled to tax abatement refunds under state law; the board failed to make appropriate refunds of the real estate tax abatements, presumably due to a lack of funds.

8. Co-op maintenance has significantly increased and will inevitably continue to increase as more substantial legal costs are incurred. Needed building services and repairs will be cut or foregone, and the quality of life in the building will deteriorate.

9. The board has been less than candid with the shareholders about all of these matters, in order to keep themselves in order to keep themselves insulated from criticism and oversight.

Whether or not you have given a proxy to the board, please attend the meeting on November 12 and vote, after listening to the discussion (if you attend and vote, your proxy is void and you can vote any way you wish). I believe your vote will affect the value of your investment and the future viability of this co-op.

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