Volume 22, Number 26 | The Newspaper of Lower Manhattan | November 6 - 12, 2009
Stuy case helps I.P.N.’ers, their attorney says
By Julie Shapiro
While lawyers, housing advocates and real estate experts ponder the impact of last month’s Stuyvesant Town decision, residents of one Tribeca complex are wondering what the decision could mean for them.
In the Stuyvesant Town case, the state’s highest court ruled that owner Tishman Speyer owed about $200 million in rent overcharges to tenants who should have been rent-stabilized because the Tishman was receiving J-51 tax breaks.
The J-51 program is also at the heart of a battle at Tribeca’s Independence Plaza North, a 1,339-unit complex where residents claim that they, too, should be stabilized because their landlord received an abatement. The I.P.N. tenants have been litigating their case since 2005, before the Stuyvesant case surfaced.
While there are differences between the I.P.N. and Stuyvesant cases, Seth Miller, who represents the tenants, said the Stuyvesant decision would be useful in his arguments.
“This convinces everybody that the J-51 law is going to be enforced as written,” Miller said. “That’s helpful, to have the sense that this is not a law that gets bent.”
The J-51 law requires landlords who receive the tax abatement to stabilize the rents while they are receiving the abatement and to notify tenants about the abatement, which I.P.N. owner Laurence Gluck did not do.
But Stephen Meister, who represents Gluck and is involved in the Stuyvesant case, does not expect the Stuyvesant case to influence the decision on I.P.N.
“There’s nothing to link the two cases,” said Meister, who launched the most recent unsuccessful Stuyvesant appeal on behalf of the Real Estate Board of New York.
Stuyvesant Town’s owners received about $25 million in tax breaks over 17 years, Meister said, while Independence Plaza’s owners received much less money over a shorter period of time. Harold Cohn, the former owner of I.P.N., started receiving the J-51 tax abatement of $7,550 a year in 1998 and Gluck continued receiving it after he bought the building in 2003.
Meister has argued that the city was supposed to discontinue the tax break when Gluck removed I.P.N. from the Mitchell-Lama middle-class housing program in 2004, but instead the city continued the tax break by mistake until 2006. Then, Gluck stopped receiving the benefit and paid back about $17,000.
The tenants say that regardless of the differences between the cases, and regardless of the size of the tax breaks Gluck received, the law calls for I.P.N. to be rent stabilized.
Judge Marcy Friedman has been hearing the I.P.N. case since 2005, but in April she turned the matter over to the state Division of Housing and Community Renewal. The agency has taken written submissions from the lawyers but has not heard oral arguments.
At Miller’s suggestion, Friedman set a rough deadline of January for D.H.C.R. to issue an opinion, after which time either side can ask her to order the agency to decide. Meister does not expect D.H.C.R. to decide before January. The agency did not return a call for comment.
Councilmember Alan Gerson, who is leaving office at the end of the year, said last week that D.H.C.R. may have been delaying its decision while the Stuyvesant case was pending, but there are no more reasons for delay.
“Now is the time to push D.H.C.R.,” he said at a Community Board 1 meeting.
An additional connection between the Stuyvesant and I.P.N. cases is that it was an I.P.N. tenant who discovered Stuyvesant’s tax break in the first place. The I.P.N. tenant, Ed Rosner, was doing research on other J-51s in the city and stumbled across the one at Stuyvesant.
Diane Lapson, president of I.P.N.’s tenant association, said she never would have guessed that the Stuyvesant case would be resolved first, but she is happy for the tenants who will benefit from it, both there and around the city.
“There was no accountability before,” she said. “Now at least I know people are watching.”
Rosner, too, was optimistic that the Stuyvesant decision presaged a positive outcome for I.P.N. tenants.
“Sometimes you live in hope and die in despair,” Rosner added, “but I think we’ll be okay.”