CJ 430020 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

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          IN THE MATTER OF THE ADMINISTRATIVE    SJR NOS. 4314 & 5909
          APPEAL OF                              
                                                 ADMINISTRATIVE REVIEW
            WHITEHALL APARTMENTS,                DOCKET NO.: CJ 430020-RO
                                                  (Refile of CI-430010-RO) 
                                                
                                                 DRO DOCKET NO.: AL 410002 UC 
                                PETITIONER     
          ----------------------------------X                           
            
          ORDER AND OPINION REMANDING PROCEEDING TO THE RENT ADMINISTRATOR
                              FOR FURTHER CONSIDERATION

          This Administrative Review Order and Opinion is issued as a result 
          of a petition in the Supreme Court, pursuant to Article 78 of  the
          Civil  Practice  Law  and  Rules,  in  the  nature  of   mandamus,
          requesting expedited processing.

          At issue is whether the subject apartments are  exempt  from  rent
          regulation as a result of an alleged substantial rehabilitation.

          The owner commenced the initial proceedings on December 11,  1986,
          by filing an application requesting the Administrator to determine 
          whether the subject accommodations known as 250 West 100th Street, 
          New York, New York are exempt from the Emergency Tenant Protection 
          Act (ETPA),  as  a  result  of  substantial  rehabilitation  after
          January 1, 1974.

          In the applications, the owner set forth, in substance,  that  the
          subject building had been converted from a  hotel  containing  225
          Class B  single  rooms  to  a  building  containing  187  Class  A
          apartments, at  a  cost  of  over  $2,000,000.00;  that  the  work
          involved, among other items, the construction of a new  roof;  the
          installation of two automatic elevators;  the  installation  of  a
          master television antenna, with  connections  to  each  unit;  the
          entire plumbing system was rehabilitated; a new refuse  chute  and
          compactor was installed; that each unit has  private  cooking  and
          bathroom facilities, as opposed  to  the  common  facilities  that
          existed  in  the  hotel;  that  brand  new  kitchen  and  bathroom
          equipment was purchased and installed in every apartment; that all 
          new sheetrock walls and partitions had to be  erected;  that  each
          apartment, and hallway areas received new thermal aluminum windows 
          and sashes; and, that each apartment received new apartment  doors
          and interior doors.

          With the application, the owner submitted copies of  the  old  and
          new certificates of occupancy; and, various  contracts  and  bills
          for material and equipment purchased for the building.

          Subsequently,  in   response   to   a   notice   from   the   Rent
          Administrator, the  owner  submitted  copies  of  approved  plans;
          altered building application and permit; and,  rent  roll  showing






          CJ 430020 RO

          names of tenants, dates of occupancy, and rents paid.

          On August 16, 1988, the Rent Administrator issued an order denying 
          the owner's application, finding that exemption was not warranted, 
          based on the information in the file that the work  completed  did
          not meet the requirements of substantial rehabilitation within the 
          meaning of the Code and the Regulations.

          In the owner's petition for administrative review of  that  order,
          refiled and perfected on October 11, 1988, the owner contended  in
          substance, that the  Rent  Administrator's  order  was  arbitrary,
          capricious and irrational; that, as a result  of  the  substantial
          rehabilitation, the original 250  Class  "B"  units,  with  common
          cooking and bathroom facilities, were converted into 187 Class "A" 
          apartments with private cooking and bathroom facilities; that  all
          of the service systems and the physical structure  of  the  entire
          building were either improved or replaced; that the taxes assessed 
          against the subject building increased from  $55,937.48  in  June,
          1982, to $225,989.52 in June, 1984; that this increase was due  to
          an increase in the assessed value of the building of $1,799,000.00 
          during the same two year period; that it  had  been  held  by  the
          courts  that  an  increase  in  the  number  of  units  is  not  a
          prerequisite to a finding of exemption as a result of  substantial
          rehabilitation; that the intent  and  purpose  of  legislature  in
          enacting  an  exemption  for  substantial  rehabilitation  was  to
          encourage the rehabilitation of  sub-standard  housing  units  and
          under-utilized buildings; and, that the factors to  be  considered
          in determining if an exemption is warranted include  a  comparison
          of the old and new certificates of occupancy, the nature and scope 
          of the work actually  performed;  a  comparison  of  the  cost  of
          rehabilitation to  the  cost  of  acquisition  and  the  size  and
          condition  of  the  building;  and,  the  owner's  good  faith  in
          undertaking the rehabilitation.

          On June 19, 1989, the Commissioner issued  an  order  and  opinion
          denying the owner's appeal, finding that the subject building  had
          not been substantially  rehabilitated,  and,  therefore,  did  not
          warrant exemption from rent reduction.

          In the ensuing Article  78  petition,  the  Court  overturned  the
          Commissioner's  PAR  determination  as  arbitrary  and  capricious
          asserting that DHCR had departed from its previous holding in 
          ARL-4590-Q (Various Tenants of 45-15/17 21st Street,  Long  Island
          City) without any explanation for such departure.  The  Court,  in
          remanding the proceeding for further consideration,  directed  the
          DHCR to determine whether the work claimed to have been  done  was
          actually performed.








          CJ 430020 RO

          Thereafter, the petitioner filed another petition in  the  Supreme
          Court, pursuant to Section  78  of  the  Civil  Practice  Law  and
          Regulations, in the nature of mandamus requesting that  processing
          be expedited.

          The applicable law is Section 2520.11(e) of the Rent Stabilization 
          Code.

          The Commissioner is of the opinion that this proceeding should  be
          remanded to the Rent Administrator for further processing as there 
          is a need for further investigation and fact finding.

          On remand, the Administrator is  to  notify  the  tenants  of  the
          proceeding, and to afford them an opportunity to  respond  to  the
          owner's applications.

          Investigation is to be made whether the work alleged to have  been
          done by the owner in the subject building was actually  done.   In
          addition, the Administrator is to ascertain  whether  or  not  the
          building was occupied or vacant prior to the start of the  claimed
          work, and its physical condition prior to the start of that  work.
          As these factors may be determinative of  the  issue  herein,  the
          Administrator is directed to make a finding on  these  items,  and
          shall constitute the factual basis  for  determining  whether  the
          building is entitled to exemption from rent regulation.

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

          ORDERED, that this petition for administrative review be, and  the
          same hereby is, granted, to the extent of remanding this matter to 
          the Rent Administrator for expedited processing in accordance with 
          this order and opinion.

          ISSUED:


                                                                        
                                          JOSEPH A. D'AGOSTA
                                          Deputy Commissioner
    

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