OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA

                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          ------------------------------------X   ADMINISTRATIVE REVIEW
          APPEAL OF

          George Pollack                          
                                                  RENT ADMINISTRATOR'S
                               PETITIONER         DOCKET NO: LS000635OM


          On July 21, 1987 the above named petitioner-tenant filed an 
          administrative appeal against an order on issued July 13, 1987 by 
          the Rent Administrator (Gertz Plaza, Jamaica, New York) concerning 
          the housing accommodations known as 35 East 38 Street, New York, 
          New York wherein the Administrator granted a major capital 
          improvement (MCI) rent increase based on the installation of a 
          cooling tower.

          The owner commenced the proceeding below by filing its MCI 
          application in July of 1985.

          The petitioner-tenant objected to the owner's application 
          contending, in substance, that the rental tenants had no input into 
          the decision to replace the cooling tower; the owner-applicant also 
          owned the parking garage which was a part of the building; the 
          garage benefitted from the improvement as it was ventilated by the 
          same cooling tower which ventilated the building, therefore the 
          income from the garage should be included; and the owner may have 
          failed to maintain the former unit to the extent that it had to be 

          The Rent Administrator's order granted the owner's application and 
          authorized a rent increase for the cooling tower upon a finding 
          that the work completed complied with all qualifying criteria 
          established for an MCI.

          In this petition, the tenant contends, in substance, that 
               (1) the installation is a replacement of a previously    
                   existing cooling tower that was not maintained       
               (2) the owner omits from the rental income the rents     
                   received for the garage located in the               
                   building which also benefits from this               
                  installation; and

          ADMIN REV. DOCKET NO. BG410243RT

               (3) the cost for this installation should be paid from   
                   the normal rental income.
          The owner did not submit a response to the tenant's petition.

          After careful consideration of the entire record, the Commissioner 
          is of the opinion that this proceeding must be remanded to the Rent 
          Administrator for further processing.

          It is the established position of the Division that the work 
          performed herein meets the definitional requirements of an MCI for 
          which a rent increase may be warranted, provided the owner 
          otherwise so qualifies.

          The record discloses that the owner submitted to the Administrator  
          various documentation in support of its application, including 
          copies of the contract, invoices, the contractor's certification, 
          and cancelled checks. The owner also certified that no commercial 
          tenants benefited from the installation.

          However, the Commissioner notes that the petitioner-tenant had 
          alleged in the proceeding below that the garage also benefited from 
          the cooling tower installation, but that the Administrator failed 
          to investigate this claim. Accordingly, this proceeding must be 
          remanded for the purpose of determining whether the garage (which 
          is a part of the subject premises) benefits from the cooling tower 
          installation and, if so, for such further action as deemed 

          THEREFORE, in accordance with the Rent Stabilization Law and Code,  
          it is

          ORDERED, that this petition be, and the same hereby is, granted to 
          the extent of remanding this proceeding to the Rent Administrator 
          for further processing in accordance with this order and opinion. 
          The automatic stay of so much of the Rent Administrator's order as 
          directed a retroactive rent increase is hereby continued until a 
          new order is issued upon remand. However, the Administrator's 
          determination as to a prospective rent increase is not stayed and 
          shall remain in effect until the Administrator issues a new order 
          upon remand.


                                                  JOSEPH A. D'AGOSTA
                                                  Deputy Commissioner


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