BY JOHN BAYLES | “The Appellate Court got it wrong,” said Ed Rosner, vice president of the Independence Plaza North (I.P.N.) Tenants Association, at 80 North Moore St. “It makes no sense. By virtue of that decision, no resident is safe.”
Rosner, who is also co-chair of the Mitchell-Lama Residents Coalition, was referring to the April 3 Appellate Division of the NYS Supreme Court ruling in favor of I.P.N. landlord Laurence Gluck.
The decision states that if a landlord receiving J-51 benefits, a tax break related to the renovation of apartments, decides to “retroactively” repay the tax, the affected apartments would no longer be rent-stabilized. In exchange for the tax exemption, building owners must provide certain benefits to their tenants, such as rent stabilization. Gluck had been receiving the tax abatements dating back to 1998.
According to the latest ruling, I.P.N. apartments are not rent-stabilized. The complex was already taken out of the Mitchell-Lama program — a separate state program that subsidizes middle-income families — in the mid-2000s.
Local politicians banded together in front of Independence Plaza North in Tribeca on May 3 to decry what they deem a “critical blow” to the future of affordable housing in New York City.
“Simply put, without affordability at I.P.N., our community would not be what it is today,” said NYS Sen. Daniel Squadron. “J-51 is not just meant to provide a tax break — it’s meant to ensure the kind of affordability and stability that I.P.N. has long provided and that makes New York the vibrant and diverse place it is today.”
Squadron stressed the need for a Court of Appeals hearing, which is critical for not only I.P.N. residents but for the tens of thousands of other affordable housing dwellers potentially affected by the ruling.
Indeed, an initial assessment found that the ruling would impact at least 4,140 apartments in 25 different developments throughout the city, according to legislators.
U.S. Representative Jerry Nadler said the city is faced with an affordable housing crisis, making it all the more crucial that developments such as I.P.N. remain affordable to low- and moderate-income families.
“The J-51 program has been a vital tool for maintaining affordability throughout the city and must be preserved,” asserted Nadler. “Moreover, owners who accepted tax breaks in exchange for a commitment to affordability should not now be given the opportunity to renege on that commitment.”
When Nadler was a state legislator, he was one of the sponsors of J-51, recalled Rosner, who is confident that the NYS Court of Appeals, the state’s highest court, will ultimately side with I.P.N.
“He knows its intent,” said Rosner. “He and other elected officials, as well as Community Board 1, are preparing to file [opposing testimony to the Court of Appeals] to overturn this outrageous decision.”
C.B. 1 Chair Julie Menin also expressed her disappointment with the decision and voiced concern that arbitrary rent increases could lead to eviction of long-time residents.
“Keeping affordable housing in our district is a vitally important priority for us,” she said.
The April ruling upheld a decision by a federal court judge almost a year ago, saying Gluck did not break the law when he deregulated I.P.N. and removed it from Mitchell-Lama while simultaneously receiving J-51 tax credits.
I.P.N.’s Tenants Association thought they had won the battle against Stellar Management, the company where Gluck serves as chief executive officer, when in August 2010, NYS Supreme Court Judge Marci Friedman ruled that the 1,328 units had been illegally deregulated because it received J-51 benefits both before and after exiting from Mitchell-Lama.
Further, the NYC Department of Housing Preservation and Development did not change the status when it permitted the landlord to “pay back” the post-exit tax benefits.
However, Gluck appealed that ruling on the basis that the city Department of Finance was responsible for the mistake that led to the J-51 tax credits being issued after the building had been removed from the Mitchell-Lama program.
He repaid the amount resulting from the J-51 tax credits, including interest, dating back to summer 2004.
Rosner and others are awaiting permission to file their appeal. But meanwhile, “We can’t expect tenants to move onto a park bench,” he said. “Between food and shelter, you are getting down to the basics.”
“Why do we continue to allow rich people to break the laws?” chimed in Vickie Green, a 36-year tenant at I.P.N., who is living on social security. “We want to see justice done.”
— Additional reporting by Bonnie Rosenstock
