ADM. REVIEW DOCKET NO.: BJ 430022-RO 
                                    STATE OF NEW YORK
                      DIVISION OF HOUSING AND COMMUNITY RENEWAL
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          ------------------------------------X 
          IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
          APPEAL      OF                                   DOCKET      NO.:
                                                 BJ 430022-RO   
                                              :
                                                 DRO       ORDER       NO.:
                                                 AI               430126-OM
              KASHANCO                 INTERNATIONAL                 CORP.,
                 
                                                  

                              PETITIONER      : 
          ------------------------------------X 

                   ORDER AND OPINION DENYING ADMINISTRATIVE APPEAL


               On October 6,  1987  the  above-named  petitioner  filed  an
          Administrative Appeal against an order  issued  on  September  4,
          1987 by the District Rent Administrator, 92-31 Union Hall Street, 
          Jamaica, New York, concerning the housing accommodations known as 
          213 East 84th Street, New York, NY, Various Apartments.

               The issue herein is whether the District Rent  Administrator
          properly denied the  owner's  application  for  a  major  capital
          improvement rent  increase  based  upon  the  installation  of  a
          concrete sidewalk.

               The District Rent Administrator's  order,  appealed  herein,
          denied the owner's application for a  major  capital  improvement
          rent increase based upon the installation of a concrete sidewalk.

               This order was based upon a finding  that  the  installation
          claimed in this proceeding does not constitute  a  major  capital
          improvement. 

               On appeal, the petitioner-owner alleges, in substance,  that
          a new sidewalk  does  qualify  as  a  major  capital  improvement
          pursuant to a prior decision under Administrative  Review  Docket
          No. CPTA 22,191.





               After a careful consideration  of  the  entire  evidence  of
          record the Commissioner is of the opinion that the administrative 
          appeal should be denied.

               Section 2522.4  of  the  Code  effective  May  1,  1987  and
          Operational Bulletin 84-4 provide, in pertinent part, that for an 
          installation to constitute a major capital improvement,  it  must
          be, among other criteria, deemed depreciable under  the  Internal






          ADM. REVIEW DOCKET NO.: BJ 430022-RO 
          Revenue  Code.   Operational  Bulletin  84-4,  effective  as   of
          November 13, 1984,  also  relates  to  the  processing  of  major
          capital improvement rent increase applications filed pursuant  to
          Section 2202.4 (formerly Section 33(1)) of the Rent and  Eviction
          Regulations. 

               In a prior proceeding under Administrative Review Docket No. 
          ARL 01810-Q, issued July 25, 1985, the Commissioner  specifically
          held that the installation of sidewalk was properly disallowed by 
          the District Rent Administrator because such installation is  not
          deemed depreciable  under the Internal Revenue Code.  In view  of
          the foregoing, it is clear that the District  Rent  Administrator
          correctly  denied  the  owner's  application   in   the   instant
          proceeding and that such determination is not  inconsistent  with
          prior decisions. 

               The  Commissioner  notes  that  in  the   proceeding   under
          Administrative Review Docket No. CPTA 22,191, cited by the  owner
          on appeal, the District Rent Administrator's  order  was  issued,
          and the owner's administrative appeal  was  filed,  approximately
          one year prior to the effective date of Operational Bullet n  84-
          4, which established certain standards applicable  to  both  rent
          stabilized  and  rent  controlled  buildings  including  that  an
          installation had to be  deemed  depreciable  under  the  Internal
          Revenue Code in order to constitute a major capital  improvement.
          Accordingly, that decision no longer represents  Division  policy
          on this case.

               THEREFORE, in accordance with the  provisions  of  the  Rent
          Stabilization Law and Code; the City Rent Law and  the  Rent  and
          Eviction Regulations; and Operational Bulletin 84-1, it is

               ORDERED, that this administrative appeal be,  and  the  same
          hereby is, denied, and  that  the  order  of  the  District  Rent
          Administrator be, and the same hereby is, affirmed.

          ISSUED:
                                                                        
                                          ELLIOT SANDER
                                          Deputy Commissioner
                                          




                                                    

    

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