Volume 18 • Issue 11 | August 5 - 11, 2005

Owner must offer better rent deal, I.P.N. leaders say

By Ellen Keohane

A somewhat skeptical crowd of more than 200 residents of Tribeca’s Independence Plaza North apartment complex gathered on Tuesday night at I.S. 89 to learn more about a tax abatement program that could potentially make their apartments eligible for rent stabilization.

Recently the tenant association discovered that I.P.N.’s former owner applied for and received a reduction in city real estate taxes in 1998. Laurence Gluck, who purchased the complex two years ago, is still receiving this tax reduction, which is known as a J-51 tax abatement, said Diane Lapson, president of the I.P.N. Tenant Association.

If an apartment complex receives a J-51 tax abatement and they notify the tenants in their leases, then the building should be rent stabilized for as long as the tax abatement lasts, Lapson said. Gluck’s attorney, Stephen Meister, wrote in a letter to Lapson that she was mistaken, and that all tenants are not eligible for rent stabilization, and even if she is right, under J-51 abatement rules, the restrictions would expire in 40 months.

Seth Miller, the tenant association’s attorney, however, said because Gluck never informed the tenants of the J-51, the apartments would stay rent stabilized until the tenants and their successors leave.

“When we found out about the J-51, we were shocked,” Lapson said. The landlord never told the tenant association about the tax abatement, and neither did the city’s Department of Housing Preservation and Development, or the U.S. Department of Housing and Urban Development, she said. The J-51 also did not show up in the title search.

H.P.D. did not confirm the one point both sides agree upon – that the former owner applied for J-51benefits – and would not comment on which side was reading the law correctly.

“We do not have any specifics at this point regarding the existence of any J-51 benefits at I.P.N.,” Carol Abrams, H.P.D. spokesperson, said in an e-mail statement.

The tenant association learned of I.P.N’s J-51 status from Carole Ule, the lawyer for the West Village Houses Tenants Association, which is a former Mitchell-Lama development.

Independence Plaza used to be part of the Mitchell-Lama program, which was created in 1955 to provide affordable housing for middle-income residents. Landlords have the option of buying out of the program after 20 years, upon payment of any outstanding mortgages and taxes. In June of 2003, I.P.N.’s new owner Gluck announced his plans to leave the program in a year’s time.

Following Gluck’s announcement, Mayor Mike Bloomberg and City Council Speaker Gifford Miller helped negotiate a settlement agreement between Gluck and I.P.N’s tenants.

As part of the agreement, which was reached in March of 2004, tenants could apply for federal rent assistance vouchers, more commonly known as “sticky vouchers,” which would cover the portions of their rents that exceeded one-third of their income. Those who did not qualify for sticky vouchers could enroll in the city-regulated Landlord Assistance Program, which would maintain their rents at current levels, with periodic rent increases similar to rent stabilization. New tenants moving into the complex would have to pay market rate.

With news of the J-51 tax abatement, tenants at the meeting wondered if the settlement agreement was really necessary — and if rent stabilization would have been a better option.

“Had we known about this before, we wouldn’t have had to struggle so much to keep our apartments,” said Tara Ramroop, a 51-year-old I.P.N. tenant who attended the meeting.

During the long process of negotiating with Gluck, some residents were evicted and others had to move, Lapson said. “We still have 19 tenants in court because they were never put into the right categories,” she said.

There aren’t tremendous differences between the settlement agreement and rent stabilization, said Miller, the tenants’ attorney. However, for new I.P.N. tenants who are paying market rates, the difference in rent could be enormous, he said.

In addition, the sticky vouchers, which many I.P.N. tenants receive to help subside their rent, are also vulnerable to federal budget cuts, said Miller. And under rent stabilization, tenants’ garage rent could also be rent stabilized depending on the situation, he said. However, there’s no reason to cancel the 2004 settlement agreement, Miller said.

“We have no choice but to report what we discovered to our tenants. The landlord’s attorney basically told us we better back off or they have threatened to break our original deal negotiated after months of meetings,” Lapson wrote in an e-mail to Downtown Express. “Which makes me think there’s more to this story,” she said.

For now, residents were encouraged to join the tenant association and submit their questions and concerns in writing. “We’ll probably have another meeting in a few weeks and will continue discussing our options,” Lapson said.


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