Volume 20, Number 41 | The Newspaper of Lower Manhattan | Feb. 22 - 28 , 2008

I.P.N. tenants work to file 1,300 documents in rent suit

By Julie Shapiro

The legal battle over rents at Independence Plaza North has been going on for years, but tenants recently learned of a new twist: To keep their hope of lower rents alive, each tenant has to file a rent overcharge complaint by June.

Previous actions taken by Independence Plaza tenants were made as a group, but this time each apartment will have to submit separate, complicated paperwork. At a meeting Feb. 13, about 200 tenants gathered to ask questions and rally against Laurence Gluck, the complex’s owner.

“It’s a David and Goliath situation,” said Rhona Drossman, 57, who has lived at Independence Plaza for 30 years. “Gluck has very deep pockets and he feels his money we’ll talk.” Drossman paused, then said, “We’ll show him that’s not so.”

Gluck, principal at Stellar Management, removed the 1,339-unit complex from the Mitchell-Lama affordable housing program in 2004, but tenants were able to negotiate new rent protections. However, the tenants contend that their apartments were eligible for better rent-stabilized protections because Gluck was receiving a tax abatement.

The tenants have to fill out the rent overcharge complaint if they want to lock in their 2004 Mitchell-Lama rents before the state Division of Housing and Community Renewal’s four-year time limit expires. That way, if the tenants succeed in becoming rent-stabilized, their base rent will be as low as possible. The form requires tenants to submit four years of cancelled rent checks.

“It’s a long struggle and it requires courage,” said Seth Miller, the tenants’ lawyer. “At this point, it also requires participation. In the end, I’m confident we will win this struggle.”

He wants to have all tenants’ paperwork by March 15 to ensure making the June deadline.

Borough President Scott Stringer spoke at the meeting, uniting the audience in applause. Stringer urged Independence Plaza tenants to stick together and not fall prey to divisive misinformation spread by the landlord.

“Let’s not just let them get away with this,” Stringer said. “Let’s have a sense of outrage.”

At the end of his speech, Stringer asked the crowd, “You’re still ready to do some battle, right?” From around the P.S. 89 auditorium came the resounding response: “Yeah!”

Diane Lapson, president of the tenant association, also riled the group. She told the tenants about a threatening letter she received from Gluck warning her not to hold the meeting that night.

“You know what? Bring it on, Mr. Gluck — bring it on,” Lapson said, to cheers from the audience. “We’re not scared and we’re not going anywhere.”

Gluck did not return two calls for comment.

The atmosphere at the meeting grew tense at times, especially when tenant leaders requested tenants help pay for legal fees. The tenant association is asking for $300 from longtime tenants and half a month’s rent from more recent tenants paying market rent.

“This is going to cost a lot of money,” tenant leader Elissa Krauss told the audience. “We have a vicious opponent.” She reminded tenants that filing the complaint won’t guarantee that they get money back. “The only guarantee is if you don’t file an overcharge complaint, you definitely will not get a rent reduction.”

The tenants filed a lawsuit against Gluck in 2005 when they found out he’d been receiving J-51 tax abatements without providing tenants with rent stabilization, as is required. Landlords can receive J-51 abatements when they make improvements to apartments. Judge Marcy Friedman, who is hearing the case, has not issued a decision, and said in September that she needs more information.

The tenants were especially surprised to hear of the J-51 abatement, because they had just negotiated an affordability settlement with Gluck the year before and had no idea he was receiving the abatement. Had they known, the tenants would have had far more leverage, they said.

Still, the tenant association succeeded in negotiating some rent protections back in 2004. Tenants under the negotiated Landlord Assistance Program, which limits rent increases to government-approved rates, are currently paying stabilized rents. But, under the agreement, the LAP tenants will see their rents increase at a faster rate starting in 2013 — something rent-stabilized tenants wouldn’t have to worry about.

Other Independence Plaza tenants are receiving federal vouchers, a program with stringent income requirements and tricky paperwork. A handful of tenants were recently removed from the program after failing to report a small amount of income, such as from a son’s summer job, Lapson said. Another problem with the voucher program is that it depends on the whims of the federal budget, Krauss said.

So, although the tenant association declared success after negotiating these agreements with Gluck several years ago, both voucher and LAP tenants would benefit from rent stabilization, Krauss said.

Independence Plaza started receiving the J-51 tax abatement in 1998 and it was scheduled to last for 14 years. But in 2006, Gluck cut off the abatement and repaid the city all the benefits he had accrued since buying the building. He has said he didn’t know the previous owner was receiving the abatement, and since he repaid the city, he believes he doesn’t owe the tenants rent-stabilization, tenants said.

As if the issue weren’t complicated enough, another question has entered the mix: Are J-51 rent-stabilized apartments subject to luxury decontrol? Ordinarily, when rent-stabilized apartments top $2,000 a month and the annual household income tops $175,000, the apartment ceases to be rent stabilized. But J-51 apartments have long been seen as exceptions to this rule — until recently.

In August, state Supreme Court Judge Richard B. Lowe ruled that apartments at Stuyvesant Town, whose owner receives J-51 abatements, were subject to luxury decontrol and did not have to remain rent stabilized. The Stuyvesant tenants are appealing, and until the case is settled, the state D.H.C.R. and the city Department of Housing Preservation and Development have said they won’t step in.

State Sen. Thomas Duane got involved while advocating for tenants at One Bank St., which receives a J-51 abatement. Duane plans to introduce legislation requiring J-51 properties to be rent stabilized and officially exempting them from luxury decontrol. The fate of the more than 40,000 city buildings receiving J-51 abatements hangs in the balance.

The good news for Independence Plaza tenants is that Friedman, the judge hearing their case, said in September that J-51 requires apartments to be rent stabilized, regardless of how high the rent grows. But since the state and city housing agencies are keeping quiet for now, Independence Plaza tenants can’t count on their support.

As they filed out of last week’s 90-minute meeting, several Independence Plaza tenants said they were overwhelmed by the information presented and daunted by the form they needed to fill out. But most tenants seemed resolved.

“I believe we should fight,” said a man, 58, who has a salt-and-pepper beard and has lived in Independence Plaza for 30 years.

Drossman, another 30-year-resident, said rent stabilization is just the latest in a series of battles the tenants have fought against the landlord. Gathering up her cancelled rent checks and pitching in for legal representation is a small price to pay, she said, if it helps maintain the I.P.N. community.

“We’ve been through a lot together,” Drossman said, alluding to 9/11, when Independence Plaza was evacuated. “There’s a tremendous sense of family.”

Deborah Stewart, who has lived at Independence Plaza since 1991, left the meeting feeling unsettled.

“It’s really scary that we don’t really know what our status is,” she said.

Stewart, who pegged her age at “near 50,” wishes Gluck had let tenants buy their apartments, as sometimes happens when buildings exit Mitchell-Lama. Owning her own apartment would give her more stability, she said, but it’s impossible to find something affordable. “There’s nowhere to go,” Stewart said.

With reporting by Chris Lombardi

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