Downtown Express file photo by Vadim Shepel
Children wait for the football to come down outside Independence Plaza.
Judge ‘punts’ I.P.N. decision to state housing agency
By Julie Shapiro
Both sides declared victory this week in the Independence Plaza North rent-stabilization battle after the judge hearing the case passed the decision on to a state agency.
Judge Marcy Friedman had been weighing evidence on the middle-income Tribeca complex since 2005, but last week she decided to give the case to the state Division of Housing and Community Renewal instead of making a decision herself.
“We’re calling it a non-decision,” said Stephen Meister, the lawyer representing I.P.N. owner Laurence Gluck. “She’s punting.”
The D.H.C.R. will now be the one to decide whether Independence Plaza’s 1,339 units should be rent-stabilized, as the tenants contend. Friedman will then affirm the D.H.C.R.’s decision.
Many view the Democratic D.H.C.R. as much more tenant-friendly than it was under Republican Gov. George Pataki’s administration, and therefore more likely to side with the I.P.N. tenants.
“This is basically a win for the tenants,” said Ed Rosner, a vice president of the I.P.N. tenant association who is also a lawyer. “This is all going to be good for us.”
But Meister, Gluck’s lawyer, also called Friedman’s decision a positive one. Meister said the D.H.C.R.’s technical expertise points toward a victory for Gluck, since the law is on his side.
Nancy Peters, spokesperson for the D.H.C.R., would say only that the agency had received Friedman’s decision and was reviewing it. She would not give a timeline for when the D.H.C.R. will weigh in.
The central question is whether Independence Plaza should have become rent-stabilized after Gluck removed the building from Mitchell-Lama rent protections in 2004. The reason the tenants think their apartments are rent-stabilized is because Gluck received a J-51 tax break from the city, which requires landlords to provide rent protections.
But Meister says Gluck does not owe the tenants anything since the city cancelled the tax break in 2006 and Gluck repaid the $7,550 a year he had received. Meister said the city was supposed to cancel the tax break automatically when the building exited Mitchell-Lama two years earlier, but accidentally did not.
Judge Friedman initially held the same view, but in her recent decision she cited new evidence indicating that the city did not have to discontinue the tax abatement. Friedman reviewed letters from the city Dept. of Housing Preservation and Development that “cast a completely different light on the issues,” she wrote in her decision.
In a 2006 letter, former H.P.D. Commissioner Shaun Donovan (now secretary of Housing and Urban Development in the Obama administration) wrote that the city’s decision to end the abatement was based partly on “equitable and public policy considerations.” The letter, to Borough President Scott Stringer, shows that H.P.D. was not mandated by law to end the abatement, Friedman wrote.
The tenants say that means they should have been rent-stabilized starting in 2004 and should remain rent-stabilized until they leave their apartments, even though Gluck is no longer receiving the tax break. The tenants think Gluck knew about the tax break and chose to cancel it when the tenants found out about it so he would not have to provide them with rent-stabilization.
Meister, though, questioned Friedman’s interpretation of Donovan’s letter. Just because the letter did not mention the legal reasons behind ending the J-51 does not mean those reasons do not exist, Meister said.
If the tenants disagree with the H.P.D.’s decision to end the tax break, they should have sued H.P.D., not Gluck, Meister said.
H.P.D. deferred comment to the city’s Law Dept., which declined to comment.
Meister said he was surprised by Friedman’s decision to turn the case over to the D.H.C.R., since she had previously refused to do so. In her decision, Meister said D.H.C.R.’s expertise would be helpful in deciding the increasingly complicated case.
Friedman’s decision comes a month after another judge ruled that thousands of apartments at Stuyvesant Town should be rent-stabilized because owner Tishman Speyer Properties is receiving J-51 abatements. This week, the state Court of Appeals agreed to hear an appeal on that case, which Meister is lodging on behalf of the Real Estate Board of New York.
Meister guessed that it could take a year for the D.H.C.R. to wade through the facts in the Independence Plaza case and make a decision.
Rosner, the tenant leader, said he expected D.H.C.R. to be quicker than Friedman in making a decision — since it would be hard for the agency to be any slower.
“Things should move more rapidly now,” he said.