CJ 430020 RO
STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
IN THE MATTER OF THE ADMINISTRATIVE SJR NOS. 4314 & 5909
WHITEHALL APARTMENTS, DOCKET NO.: CJ 430020-RO
(Refile of CI-430010-RO)
DRO DOCKET NO.: AL 410002 UC
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
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
The applicable law is Section 2520.11(e) of the Rent Stabilization
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
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.
JOSEPH A. D'AGOSTA