If you copied that text from Wikipedia, they haven't gotten around to recognizing that before September 1975, Spenard was a police service area of the borough, with the cops provided by APD under contract.  In other words, they were city cops, but weren't enforcing city laws.  So there may have been idiosyncrasies in the law which allowed this sort of thing to thrive, as was the case with the Eastchester Flats a generation before.  Since you mention VECO, they were themselves headquartered in Spenard for many years, having taken over the headquarters of still another failed financial institution.