Westchester DA probes once thriving Yonkers nonprofit now buried in debt. What happened?

It has been a pillar of Yonkers for a century, a busy hub of community programs praised and funded not long ago for its mentoring work with young men of color by former President Barack Obama's foundation.

The nonprofit Nepperhan Community Center was thriving then, employing more than 100 people at its peak and offering a large slate of services for everyone from young kids to seniors, supported by $4 million a year in state and federal grants in addition to the Obama funds.

Then came a swift financial tailspin.

The situation had grown dire over just a few years. The Obama foundation had cut ties. Debt was spiraling, with piles of unpaid rent, utilities and payroll taxes. Worker paychecks had bounced. The center had even lost its nonprofit status after failing to file tax returns for three years, rendering it ineligible for further government funding.

Finally, in the wake of a damning report in March by the city's inspector general, Yonkers officials stepped in to rescue the operation. Mayor Mike Spano announced last week that the city — which owns the community center's building on Warburton Avenue — effectively will become its temporary operator, redeploying city workers to keep programs running until a new nonprofit is put in place to resume control.

"That's an important place, and we need to preserve it," Spano said in an interview on Tuesday.

In the meantime, local and federal investigations are under way to determine what what wrong, including a criminal probe by the Westchester County District Attorney's Office and Yonkers police. The Internal Revenue Service is investigating the center's failure to pay more than $300,000 in taxes, city officials say.

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How did things go so wrong at Nepperhan Community Center?

The first warning sign for city officials came in September 2022, when the Obama Foundation sent them a letter saying it was canceling a 2018 grant agreement because of financial disarray at the Nepperhan Community Center, where some workers hadn't been fully paid and paychecks had bounced.

That revelation was a blemish on a program that has otherwise earned the city accolades: its chapter of My Brother's Keeper, a national program funded by the Obama Foundation to nurture boys and young men of color.

Yonkers started its chapter in its school system in 2016 under former superintendent Edwin Quezada, and it was one of four nationwide that were recognized for their success by Obama himself in May 2023. The Nepperhan Community Center collaborated with the city government and school district on the program, but it was replaced in that three-way partnership by the Yonkers YMCA after the 2022 letter from the Obama Foundation, Spano said.

The community center had been paid more than $1 million over two years for My Brother's Keeper, including $650,000 from the foundation, $400,000 from Yonkers and $100,000 from Westchester County, according to the March report by Inspector General Liam McLaughlin. How exactly that money was spent is unknown: McLaughlin's report said the center had kept no accounting records and wouldn't cooperate with the investigation.

The only person who helped with the probe, according to the report, was Jim Bostic, the center's former executive director.

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How did center's former executive director try to save it?

Bostic, in a phone interview with the USA Today Network on Tuesday, said the center's financial collapse was a wrenching disappointment for him, having grown up in Yonkers as a beneficiary of its programs and then spent 27 years of his career shepherding and expanding those services.

"It was much more than a job to me," he said.

Asked what went awry, Bostic said, "Number one, COVID happened."

The state froze funding during the pandemic, and the center found itself stretching resources to keep its doors open, Bostic said. Soon, it couldn't make payroll.

Bostic said he left his job at the center in October 2022 by agreement with its board of directors. He had taken no pay during his last year to try to help the center's finances, he said.

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Bostic, who is also a church pastor, had come to the post after coaching basketball at New Rochelle High School and Iona College and playing pro basketball for a short stint in the 1970s. He spoke proudly about the center's growth on his watch, saying he steered it out of past debts and built an agency with 150 employees — up from six when he started — and more than 20 programs.

It sponsored a championship football team. It gave out turkeys at Thanksgiving and toys at Christmas. It hosted gatherings of civic groups and religious organizations.

"It was just an all-purpose, all-around community center," Bostic said, its name synonymous with his own because of his long leadership.

Yet it was spending far beyond its means, starting well before the pandemic, public tax documents show.

Yonkers center was in massive debt after runaway spending

According to the last federal return it filed, the center's expenses exceeded its income by more than $300,000 each of the previous two years, leaving it $360,000 in debt by the middle of 2020. The center filed no returns for the next three years and lost its tax-exempt status in January of this year as a result.

Spano calls the center a cherished Yonkers institution and told the USA Today Network he's determined to keep it going. The city will solicit proposals from nonprofits interested in taking over its operation.

For now, it's in the hands of city agencies. Officials say the Department of Parks, Recreation and Conservation is holding recreation sessions and fitness classes for seniors at the center several times a week, and plans to start programs for kids in cooperation with the city's Youth Bureau. The Office for the Aging is serving meals to seniors, hosting bingo and other activities, and arranging special events such as concert trips.

Staff writer Diana Dombrowski contributed to this report.

Chris McKenna covers government and politics for The Journal News and USA Today Network. Reach him at cmckenna@gannett.com.

This article originally appeared on Rockland/Westchester Journal News: Yonkers takes over Nepperhan Community Center as DA probes nonprofit