City approves I.P.N. sale
By Albert Amateau
New York City last week approved the sale of Independence Plaza North, setting the stage for the end of middle-class rent protections for many of the 3,000 residents of the Tribeca complex.
The May 5 action by the citys Dept. of Housing Preservation and Development action disappointed the I.P.N. Tenants Association and paves the way for the transfer of the complex from Harold Cohn, head of Duane St. Associates, to Larry Gluck, head of Stellar Management, for a price undisclosed but estimated at over $100 million, by some real estate sources.
Gluck told tenants last year that he intends to operate the 1,345-apartment complex for one year under the Mitchell-Lama subsidy program which keeps rents in the middle income range and then move to leave the program and eventually raise rents to market rate.
Tenants rents start at about $600 for studios, $800 for one-bedrooms, and $1,000 for two-bedrooms. Some residents pay monthly surcharges on their rents depending on their income.
Steve Vitoff, a spokesperson for Gluck, said the developer was pleased and not surprised by the citys approval of the sale, which still needs one more level of approval by the federal Department of Housing and Urban Development.
Vitoff added that Gluck is committed to cooperating 100 percent with tenants to minimize the financial impact of the transition. He estimated that two thirds of I.P.N. tenants would be eligible for federal enhanced rent vouchers, commonly known as sticky vouchers.
Nevertheless, Neil Fabricant, president of the I.P.N. Tenants Association, said he was outraged at the H.P.D. action two weeks before a scheduled May 23rd meeting between tenants and Daniel Doctoroff, deputy mayor for economic development, regarding the impending I.P.N. Mitchell-Lama buyout.
Is anyone in the administration listening to ordinary people? asked Fabricant, recalling that the tenants association had urged H.P.D. to reject the proposed sale. The tenants association wants to acquire the complex and organized a limited equity co-op that would guarantee affordable housing for all current tenants.
Tenant association leaders say the sticky vouchers are not a reliable guarantee of affordable housing because funding for the program depends on annual federal budgets and may be discontinued especially during bad economic times. There is a serious effort in Congress to lump sticky voucher funds into block grants to be given to the states for their general funds, said Fabricant. He said this would effectively end the voucher program.
I havent given up hope, he said in regard to the tenants desire to acquire the complex. Well know more after our meeting with Dan Doctoroff on May 23, he said.
Fabricant said he was outraged that H.P.D. approved the sale, despite the evidence that we submitted about years of mismanagement and corruption.
Cohn did not return several phone calls seeking comment on the matter.
H.P.D. said last week that the sale approval was not the same as approval of the Mitchell Lama buy-out. The buy-out cannot take place until a year after an owner files a notice of intent with H.P.D. to leave the program, and in the case of I.P.N., the notice may be filed only after the sale is final.
H.P.D. was legally obligated to approve the transfer of ownership after a thorough review by the departments inspector general, said Barbara Flynn, H.P.D. chief of staff. The review investigated any criminal charges that may have been filed against Mr. Gluck and whether or not he had a history of tenant harassment in any other properties he owns. H.P.D. did not uncover any negative findings and therefore approved the transfer, she said
Vitoff said that Gluck had engaged an independent consultant to look at the income levels of I.P.N. tenants applying for rent subsidies and found that 68 percent of those who applied would be eligible for the sticky vouchers. That doesnt mean that 32 percent will not be eligible, said Vitoff, noting that some I.P.N. apartments are vacant and some are occupied by I.P.N. employees. Moreover, some residents do not apply for subsidies because they know they are not eligible.
We estimate that 22 percent, or about 287 households out of 1,345 will not be eligible for rental assistance, said Vitoff. Stellar Management is prepared to make appropriate negotiations to minimize the financial impact of the transition, he said. They will be 100 percent available to help anyone with the paperwork who wants to apply for subsidies, he added.
The H.P.D. spokesperson also said the department would work with the new owners and tenants to negotiate reasonable rent increases after the complex leaves the Mitchell-Lama program.
Fabricant, however, said that at the Phipps Plaza complex on Second Ave. north of 23rd St., rents negotiated by the owner and H.P.D. for unsubsidized tenants doubled and tripled after the Mitchell-Lama buyout.