In The Press

Independence Plaza Tenant Association leaders are doggedly seeking political support to stave off the proposed sale of the complex and what they fear will be unaffordable rent hikes, the group’s president told a gathering of about 250 tenants on Feb. 13.

IPN’s owners want to sell the three-building complex to developer Larry Gluck, who says he intends to withdraw, or “buy out,” IPN from the state Mitchell-Lama housing program that keeps rents below market level. After a buyout, which must be approved by the city, Gluck would be free to charge market rents.

IPN Tenant Association President Neil Fabricant speaks to tenants on Feb. 13. At left is Alan Epstein, a lawyer hired by tenants, to help them structure their own hoped-for purchase of the complex. Photo by Carl Glassman.

The tenant association hopes to block the sale, or at least prevent the buyout, by coming up with an alternative deal for the tenants to buy the complex, Fabricant said at the association’s meeting in a theater of the Borough of Manhattan Community College.

Through a mix of lobbying and public pressure, the association is seeking to win support from Downtown elected officials, particularly the powerful speaker of the State Assembly, Sheldon Silver, and from Daniel Doctoroff, deputy mayor for economic development.

“We are going to hold politicians who can do something about this highly accountable," Fabricant said. “We will put their feet to the fire.” The association is focusing its “energy on telling the political establishment that we are a mighty mighty force that is just beginning to wake up,” he said.

And the association, which has found a vocal advocate in Councilmember Alan Gerson, is making some progress, Fabricant told the tenants.

The proposed IPN sale has been under review since last fall by the city’s Department of Housing Preservation and Development (HPD), an agency that IPN tenant leaders have long claimed ignores tenants’ interests. Fabricant said he believed that Deputy Mayor Doctoroff’s office had taken an interest in IPN and that the review of the sale was now “out of HPD’s hands.”

“That’s a very positive step,” he said. “HPD was going to railroad us right out of here.”

A spokeswoman for the Mayor’s office did not return a phone call seeking comment.

The tenant association has also rounded up support from Community Board 1, local PTAs and community organizations, city tenant coalitions and affordable housing advocates.

With help from a team of legal and financial consultants, the association is trying to devise a tenant-led purchase of IPN that would deliver to the Cohns, or Gluck, fair market value for the complex. The deal could involve tax credits, low-interest loans, government loan guarantees, subsidies or bonds.

IPN could then remain a Mitchell-Lama rental or be converted to a limited-equity co-op, or could be a combination.

“We believe that we can structure a deal where we can be protected,” Fabricant said.

“The idea is to offer people a menu of options to stay in their apartments—-either to purchase at a price below market, or to rent, maintaining rents with as modest an increase as possible,” Alan Epstein, a partner at Manatt, Phelps & Phillips and a lawyer for the tenant association, said at the meeting.

The tenant association is also preparing a bill to present to the City Council that would protect tenants. Fabricant declined to discuss details of the proposed legislation, but said it would provide “a powerful mechanism to change the economics of a deal for anyone who wants to buy out, so if they try to do it without tenants’ approval, there will be a big, big price to pay. We’re confident the bill is valid, but we need the political will and the political organization to get it passed.”

Tenant associations at other city Mitchell-Lamas have fought buyouts in court, but Fabricant said that litigation would be a last resort. While lawsuits have slowed buyouts at other buildings, he said, they led to “lousy settlements.”

“Not one has been able to stop a buyout,” he said. “We’re not looking for litigation, going back and forth in court, and then ending up with a bad deal.” But, he added, “if we lose in the political arena, we’re definitely going to court.”

One tenant, Ken Lane, suggested that the association begin a rent strike, a tactic that IPN tenants used in 1980 to fight a rent increase.

“It will show Larry Gluck that he is buying into a place that has a unified tenant body that won't accept anything and everything he wants to do,” Lane said.

But Fabricant said he did not believe a rent strike was a good strategy to stop the sale.

“We need to get them [Cohn and Gluck] worried about something, and in the end, what they will worry about is what we present to the Mayor, to Doctoroff. If we get legislation passed, they’ll worry because then they have to overturn it.”

Since making known his intention to buy IPN last September, Gluck has tried to reassure tenants, saying that he has no intention of forcing anybody out and that most tenants will be protected from rent hikes by government rental assistance programs.

Echoing Gluck’s assurances, an HPD official said at a meeting of Community Board 1’s Tribeca Committee on Feb. 7 that about two-thirds of IPN tenants will qualify for government rent subsidies, known as enhanced or “sticky” vouchers, which will keep their rents afforable if a buyout goes through.

Gary Sloman, the director of operations for HPD’s Division of Housing Supervision, acknowledged that an owner is not obligated to accept the subsidy program but said that his agency would “strongly encourage the owner to accept the program.”

“I can’t imagine any motivation for an owner not to be in the program,” Sloman said. “Rents would be set at a high market level, the owner would probably avoid litigation and he would probably be assured of a steady stream of income from the tenants.”

The vouchers cover the difference between the amounts that tenants pay and market-level rents. Under the program, rents paid by tenants are set by the government and depend on household size and income, and cannot exceeed 30 percent of income.

But IPN tenant leaders remain skeptical, saying that Gluck may indeed decline to accept the vouchers -- or may accept them temporarily while he renovates and upgrades the complex, only to then opt out of the subsidy program and bring in wealthier residents who can afford market rents without government assistance. The tenant association also warns that the subsidy program, which must be renewed by Congress every year, could be cut in the future because of budget constraints.

“Forget about the idea that you’re protected out of the goodness of the landlord or HPD,” Fabricant told tenants at the meeting.

The association also worries that the roughly one-third of IPN tenants not covered by the subsidy program could be priced out of the complex after a buyout. Gluck has said that tenants who can afford it will be charged higher rents, but that reasonable increases will be negotiated with the tenant association.

Under new HPD regulations that went into effect on Feb. 1, an owner must give HPD one year’s notice of his intention to buy out from Mitchell-Lama. Previous rules required only six months notice.

Gluck must take ownership of IPN before he can apply for a buyout. There is no deadline for the city to approve or deny Gluck’s purchase.

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