Volume 22, Number 43 | The Newspaper of
Lower Manhattan | March 5 - 11, 2010
State agency hits I.P.N. with a ‘punch in the
stomach'
By Julie Shapiro
In a blow to Independence Plaza North tenants, the state Division
of Housing and Community Renewal decided last week that the Tribeca
complex should not be rent-stabilized.
The D.H.C.R. issued the advisory opinion to State Supreme Court
Justice Marcy Friedman, who has been hearing the battle between
I.P.N.’s tenants and owner for the past five years. Last year,
rather than decide the case herself, Friedman asked the D.H.C.R. for
advice. She can now either affirm or contradict the D.H.C.R.’s
pro-landlord recommendation.
Diane Lapson, president of the I.P.N. tenant association, said
the state’s decision felt “like a punch in the stomach.”
“It’s a big disappointment,” Lapson said. “But I believe we’re
correct and we will fight for it.”
The central issue is whether Independence Plaza’s 1,339 units
should have become rent-stabilized when I.P.N. owner Laurence Gluck
removed the complex from the Mitchell-Lama affordability program in
2004. For two years after Gluck took the building private, he
continued to receive a J-51 tax break from the city, which generally
requires apartments to be rent-stabilized. But Gluck argues that he
only continued receiving the tax break by mistake, and since he
discontinued the benefit and repaid his taxes, he does not owe the
tenants anything.
In her March 5 decision, D.H.C.R. Deputy Commissioner Leslie
Torres did not examine the question of whether the city Dept. of
Housing Preservation and Development should have allowed Gluck to
repay the tax benefit.
“It is not within the purview of D.H.C.R. to second guess or
overrule that decision,” Torres wrote.
Torres appeared particularly cautious about offering any
interpretation of the laws, saying that was the purview of judges,
not state agencies.
Instead, Torres said that given H.P.D.’s decision to allow Gluck
to repay the tax break, it was as though he had never received it.
And that, in turn, means that I.P.N. is not subject to
rent-stabilization, she said.
“I am gratified that the D.H.C.R. made the correct decision —
ruling that Independence Plaza is not rent stabilized,” Stephen
Meister, Gluck’s lawyer, said in a statement. “In the end, this is a
win for the tenants as well.”
Meister said the tenants are already benefiting from the 2004
agreement they negotiated with Gluck before he removed the building
from Mitchell-Lama, which offers them some rent protections. Meister
has said that the tenants would lose those protections if they won
their case, though the tenants dispute that.
Lapson, the tenant association president, said it is worth
fighting for rent-stabilization, because the 2004 agreement provides
fewer benefits than rent-stabilization would, and she knows of many
people who have been forced to leave I.P.N. because their rent got
too high.
Seth Miller, the tenants’ lawyer, said the D.H.C.R.’s decision
“does not stand the test of logic.” He thinks H.P.D. should not have
allowed Gluck to repay the tax benefit a few years ago, and even
though Gluck repaid it, I.P.N. should still be rent-stabilized,
Miller said.
It is unclear how soon Justice Friedman could take up the I.P.N.
case again and issue her decision. Even after that decision, the
losing side will likely appeal to the state’s Appellate Division.
After that, either side could petition the state’s Court of Appeals
to consider the case.
“A quick decision would be in everybody’s interest,” Miller said.
“As time goes on, the stakes get higher and higher.”
The U.S. Attorney in Manhattan last year concluded that I.P.N.
should have been rent-stabilized and filed suit seeking millions the
federal government says it overpaid Gluck in rent subsidies.
Lapson just found out about the D.H.C.R.’s decision on Tuesday,
and on Wednesday she was busy preparing flyers to plaster the
apartment complex. The bold-faced headline on the notice reads “DHCR
PASSES THE BUCK,” and the text below asks tenants for help in paying
for the continued legal expenses.
In a phone interview Wednesday, Lapson said she and others are
still adjusting to D.H.C.R.’s decision.
“The reason I was stunned is because I’m usually a very
optimistic person, and I always think that in the end truth and
righteousness will come forward,” Lapson said. “And I just don’t see
it yet.”
Julie@DowntownExpress.com |