A hot bath is a cruel thing to deny an 85-year-old woman, but Mattie Roberts is not what you would call a complainer. When a pipe in the apartment upstairs burst and flooded last August, obliterating most of her bathroom ceiling, she squared her jaw and watched as the workman tramped in and out.

"We'll be back soon to fix it," they said.

So Mrs. Roberts settled back in front of the television and a snack tray crowded with prescription bottles, liniments and aches-and-cricks sundries and waited. "The bathtub was nice," she laments in a whisper that can barely contend with the TV in her immaculately kept one-bedroom South Bronx apartment. "I used to use that tub, but I can't use it now. They still ain't fixed that ceiling."

Mrs. Roberts' tub has handicapped accessible grip bars and anti-slide footholds. But it's useless, constantly filthy, a collector of plaster dust, waterbugs and whatever else happens to drop down from the 20-square foot void where the ceiling should be.

It's also a metaphor for a privatization scheme gone awry. Fixing the hole is the responsibility of the SEBCO Management Company, which won a $2.75 million contract from the New York City Housing Authority (NYCHA) to manage its Murphy Consolidated housing project, an 850-apartment jumble of townhouses, small apartment buildings and converted brownstones. In all, Murphy Consolidated's 72 buildings are scattered throughout a 25-block radius in the South Bronx neighborhoods of Crotona Park East, Longwood and Hunts Point. The Housing Authority has owned them for more than 15 years; most of the properties were taken by the federal government from landlords in foreclosure proceedings two decades ago.

SEBCO's chief--the man the city picked three years ago to oversee Murphy's management--is Father Louis Gigante, a former City Councilman who runs one of the Bronx's most powerful low-income housing empires. He also happens to be brother and confidante of reputed Genovese crime family boss Vincent "The Chin" Gigante.

For most South Bronx residents, the SEBCO name--short for Southeast Bronx Development Corporation--refers to a network of nonprofit development and social service agencies. The SEBCO Management Company shares the name--but it is actually a for-profit Gigante set up to manage the nonprofit's buildings. And the income from the NYCHA contract is going directly into the private company's bank account.

According to a 1989 investigation by Village Voice reporter William Bastone, the priest, who owns several Manhattan and upstate New York residences, used mob-connected contractors in the development of the 2,500-plus units SEBCO produced in the South Bronx. Still, even critics concede Gigante's management company keeps most of the buildings he developed in excellent condition.

The same cannot be said about the NYCHA properties managed by SEBCO. In two dozen interviews with City Limits, many residents say the new maintenance contract has been a failure. SEBCO-installed floors have buckled within months after they were put in; roofs in many of the Murphy buildings have chronic leaks; tenants claim that patch-up repairs in response to their heat and water complaints have left them cold. And then there's an assortment of smaller ills that go months without being repaired: cracked tiles, busted closet doors, unpainted walls, crippled oven-ranges and water damage.

In South Bronx communities awash in crack and heroin, SEBCO and NYCHA managers have allowed security doors and lobby windows to remain broken and unrepaired for months at a time. The lassitude encourages dealers to continue to peddle their wares in the buildings, despite claims that SEBCO management would clean up the buildings.

"This here is everybody's get-high building," says Mary Chambliss, who has lived in her first-floor Murphy Consolidated apartment on Hunts Point Avenue for seven years. Chambliss is especially incensed by the fact that across the street, in buildings SEBCO developed, vigilant maintenance and banks of strategically-placed security cameras have created a practically drug-free zone. "Second-class citizens, that's what we are," she says.

"I'm starting to wonder if things weren't actually better under the Housing Authority. And things were bad then," adds David Pyatt, a Bryant Avenue tenant who had to wait months to have the hole in his bathroom ceiling repaired. He says his stove has been broken for a year.

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It is hard to tell whether to blame SEBCO or NYCHA for the Murphy buildings' flaws. Calls to Father Gigante, who has reportedly been spending much of his time counseling The Chin in preparation for his upcoming trial, were not returned. And David Post, a SEBCO manager, referred all calls to the Housing Authority and hung up when pressed for answers.

But there is a lot more at stake here than Father Gigante's reputation. For years, public housing authorities around the country have been contracting out management services to private-sector companies. The SEBCO contract was the first of its size in New York City. If the pilot effort succeeds, NYCHA sources say, the city will consider farming out the management of more than 20,000 low-rise authority units to private managers.

Three years ago, as part of the authority's recognition that it had long mismanaged Murphy and other non-conventional housing projects, NYCHA Chairman Ruben Franco requested bidders for the new contract. He chose SEBCO from 11 companies that submitted bids. In part, the authority selected the firm because of its track record.

Two much smaller, non-conventional NYCHA holdings also were contracted to private companies. Neither has had the problems Murphy has had. Part of the reason is that Murphy has the poorest tenants of the group and the worst maintenance history,

So why were so many maintenance companies eager to take on the Murphy management contract?

Simple. They wanted to buy in on the ground floor of what could be one of the largest privatization gold mines in New York: the management of NYCHA'S vast stock of smaller apartment buildings.

"There's a very, very big pot of gold at the end of this," says one real estate executive who didn't want his name used.

"I think this is the model for the privatization of the 20 to 25,000 scattered site buildings NYCHA's been mismanaging for years," says Phil Thompson, a former high-ranking authority official who pushed for NYCHA to privatize management of its odd-lot buildings. "The idea is the turn all of these buildings over to community-based nonprofits and for-profits that would be a lot better at managing them."