[NYtenants-online] Times disses stadium ... Maybe, well maybe not

[Tenant]

NYtenants Online/TenantNet                                1/29/04
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IN THIS ISSUE ...

1. Brooklyn Mitchell-Lama Tenants Face Full Building Eviction
2. Don't get your hopes up (Bloomerang & Dotcommeroff)
3. Times: Phooey on Stadium (but is that what they really meant?)
4. Jets Redraw Plans for Stadium on West Side (Times)

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BROOKLYN MITCHELL-LAMA TENANTS FACE FULL BUILDING EVICTION
by Anita Karl

When the tenants of the 42-apartment rental at 20 Henry Street, Brooklyn 
were forced by their landlord to leave the Mitchell-Lama program on June 
13, 2002, they expected to receive steep rent increases. What they didn’t 
expect was that their one-year leases would not be renewed and that they 
would all be evicted when their building was sold to a new landlord two 
months later. But that is exactly what happened as they became the first 
Mitchell-Lama buyout to evict all its tenants.

“This is a moral and political abandonment of a whole building of tenants 
by our elected representatives and the legal system,” said James Kemp who 
had fought the buyout for many years. “Most people don’t even know that a 
whole community of people can be forced to move from their apartments 
regardless of age or income once their building becomes deregulated.”

All housing completed after January 1, 1974, including Mitchell Lama 
buildings that are bought out of the program, have no safeguards against 
landlords evicting tenants or charging as much rent as they like. Many 
Mitchell-Lama buildings in Manhattan, such as West Village Houses and 
Independence Plaza North, are now facing similar fights in an effort to 
prevent what has happened to 20 Henry Street from happening to them.

The tenants at 20 Henry Street (aka Middagh Street Studio Apartments) had 
been trying to avoid this outcome since August 1999 when their landlord, 
Penson Corp., had announced that it would leave the Mitchell-Lama program 
and convert their former factory building into luxury housing. Not even 
section 8 sticky vouchers were offered to qualifying tenants in this 
building to cushion the transition for those with lower incomes.

As tenants are evicted and the building empties out, some of the remaining 
tenants are still fighting for the right to argue their case in court. Most 
tenants had been given rent-stabilized leases with riders, some as early as 
1982. A previous court decision against the tenants argued that the tenants 
leases were merely a nonbinding error on the part of the landlord and 
therefore invalid. A decision on the tenants’ appeal is expected shortly.

Bolstering the tenants’ case, current HPD Mitchell-Lama regulations state 
that rent-stabilization follows a buyout; nowhere do these regulations 
explicitly state that buildings completed after January 1, 1974 are allowed 
to go to market rents after buyout. The regulations also state that after a 
buyout, qualifying senior citizens receive rent-stabilization benefits, 
such as SCRIE. Ordinarily, the stipulations of contracts and regulations 
would be valid arguments in court, but the tenants of 20 Henry Street found 
that badly framed laws can trump regulations and even signed contracts.

Tenants at 20 Henry Street also tried to prevent the buyout by arguing in 
court that the landlord had broken many essential covenants in his contract 
with the City of New York. The courts claimed that if the Department of 
Housing, Preservation and Development (HPD) had no problem with such 
covenant violations, the tenants had no legal standing to make this argument.

HPD’s Assistant Commissioner Julie Walpert has testified in the City 
Council hearings on May 22, 2000 and again on April 11, 2003 that a 
Mitchell-Lama developer may be in violation of many, if not all, aspects of 
his contract with the City of New York, and still buy out of the program, 
if he just paid back what he owed the City. Promises Assistant Commissioner 
Walpert made at these City Council hearings, specifically that senior 
citizens and low income residents would be granted protections similar to 
those enjoyed by rent-stabilized tenants, have never materialized. Senior 
citizens in their sixties and seventies will be evicted along with all 
other tenants of 20 Henry Street.

This noninterventionist approach has been HPD policy under both the 
Bloomberg and the Giuliani administrations. But help for tenants has not 
been forthcoming from Democratic representatives and elected officials 
either. Politicians have of course mouthed words of encouragement, but 
they've scrupulously avoided putting anything in writing that might be 
truly helpful. Democratic politicians, it seems, are as beholden to big 
time developers as their Republican counterparts in Albany.  Witness, 
according to City Councilmember Letitia James, the planned sell off of 1000 
homes and businesses in Brooklyn so that developer Bruce Ratner can 
build—at taxpayer expense—a stadium for his latest corporate acquisition, 
the New Jersey Nets. Marty Markowitz, the purportedly “pro-tenant” Borough 
President, has backed Ratner’s plan from the beginning.

Middagh Street Studio Apartments at 20 Henry Street were originally 
conceived by architect Lee Pomeroy, as live/work studios where artists 
could adapt the moderate size space to suit their needs. This project 
became Brooklyn's first government-sponsored artist’s housing under the 
Cadman Plaza Urban Renewal Plan in 1975. However for 24 years, from 1977 to 
2001, priority was never given to artists, in violation of Penson’s 
contract with the City of New York. The architect’s plans which shows the 
1972 zone variances granted by the City so that these live/work studios 
could be created in a non-residential factory building have disappeared 
from the files at the Board of Standards and Appeals. These lost drawings 
could have helped the tenants prevent the conversion to luxury housing of 
this once factory-zoned building.

The tenants’ singular and admittedly small victory happened on January 1, 
2001 when artists were again given priority on the waiting list for 
apartments. HPD acknowledged that the apartments the landlord had been 
illegally warehousing should be offered to qualified artists. Three of the 
six artists who moved into the former candy factory at that time have 
already been evicted.

Another group of about 12 tenants is trying to negotiate a small settlement 
with the new landlord to at least cover moving expenses ($5500 or more 
depending upon months given up on the lease). To get this money, all rights 
to tenancy are forfeited upon signing the contract. Tenants would also give 
up all legal rights to go to court against the landlord and would be put in 
a state of eviction which even the slightest malfeasance, such as paying 
rent a day late, could forfeit the settlement, but not restore the rights 
already given up. With such a tight rental market for regulated apartments, 
tenants are worrying whether they should sign away all their legal rights 
in the hopes of getting some moving money.

What all tenants do agree on is that no one should have to experience what 
they have during the past 4 1/2 years. People should have the right to stay 
in the neighborhoods around which they have built their lives and not be 
abandoned by their elected representatives to the brutal logic of the 
market. Neither should laws that politicians create under pressure from 
real estate interest groups force tenants to move to far-flung areas, 
removed from friends and familiar surroundings. Rent stabilization laws 
should, in fact, be strengthened to protect all tenants, even those whose 
apartments were built after 1974.

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DON'T GET YOUR HOPES UP

Despite what you read below, the New York Times is not rooting for 
Manhattan's West Side.

While the paper now claims the stadium is an Albatross that would waste 
public money, they fail to make the same observation for the #7 subway and 
the Javits expansion -- even though they are equally flawed projects with 
even greater demand for taxpayer dollars.

The Times' editorial was driven by real estate interests and supports MTA 
and Federal funds being used to build the $2 billion #7 subway extension. 
If you remember from our last newsletter, Dan Doctoroff and the NYC 
Partnership issued a doctored report [no pun intended] with the same goals 
at the expense of the East Side Access and Second Avenue Subway projects. 
Federal transportation dollars are pretty well spoken for already. The MTA 
has no money and is expected to raise the subway/bus fare again next year. 
Doctoroff also expects the MTA to simply give the rail yards and its 
development rights (estimated at being worth around $700 million) to the 
project for all of one dollar.

But a growing number of developers see the stadium as a red herring and 
that their Sea of Skyscrapers (now being advocated by City Councilmember 
Christine Quinn, State Senator Tom Duane and Assemblymember Richard 
Gottfried, among others) will have an easier road to fruition without a 
stadium. While Doctoroff originally thought his warm & fuzzy Olympics was 
needed to push his plans through, many now see that and the stadium as an 
impediment. Apparently so does the Times.

Remember, this entire plan has little to do with a stadium. It's about 
creating a new Central Business District (CBD) on the West Side and 
bulldozing major parts of Clinton/Hell's Kitchen and Chelsea. The stadium 
is just a small part of the overall agenda. If you notice, the Times rails 
against the "hodgepodge" of Hell's Kitchen, similar to many small 
neighborhoods in NYC. But as many said six years ago when Joe Rose pursued 
his vision of an anal-retentive antiseptic Eighth Avenue rezoning, they 
like the hodgepodge. It makes the West Side unique and worthwhile.

The very first thing developers do when they want to bulldoze communities 
is to pretend they don't exist. Hence the false statement that the area is 
sparsely inhabited (really 20,000 according the US Census) and known as 
"Hudson Yards" -- a name existing nowhere except with the cobwebs of Dan 
Doctoroff and the Times Editorial Board.

More recently we've seen the same sickness in Brooklyn where the Times' 
developer Bruce Ratner is pursuing the building of a basketball arena for 
the New Jersey Nets. That plan would expand downtown Brooklyn into the 
equally at-risk neighborhoods of Prospect Heights and surrounding areas, 
and displace 864 residents through Eminent Domain. At least in Brooklyn, 
unlike Manhattan's West Side, the elected officials are fighting the plan.

While the Times' editorial does mention - for the very first time - that 
Tax Increment Financing (TIF) is dubious, it's glossed over. So to with 
questions of office space demand and competition with downtown WTC-area 
development goals. Likewise, creating a substantial tax for the hotel 
industry and maybe also taxing restaurants, theaters and taxis does not 
seem to raise any eyebrows with the Times.

These are major issues the Times has never considered. Times reporters now 
have no excuse not to expose the flaws in the overall plan, or to 
scrutinize the maniacal assertions of Doctoroff and crew. What is the 
ultimate tax bite and debt burden for New York taxpayers? How will it 
impact other projects in the city? Will NYC go down the tubes if the size 
of the Javits isn't doubled? Is the predicate assertion for all this 
nonsense -- that NYC needs 45 million square feet of Class A office space 
-- true or phony?

And as tenants have discovered this past year, when real estate values and 
taes go through the roofs, so does the rent.

While the Times has incrementally moved in a better direction, could it be 
too little, too late?

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A STADIUM TOO FAR
NY Times Editorial
January 26, 2004

Few would argue that the last remaining expanse of undeveloped space in 
Manhattan should remain a hodgepodge of sparsely inhabited and underused 
buildings, parking lots and rail yards west of Midtown. So it was welcome 
news when, early in his administration, Mayor Michael Bloomberg called for 
dramatic changes to the area commonly known as Hudson Yards. Central to the 
plan was a stadium that would be home to the New York Jets, additional 
space for the Javits Convention Center and a setting for the 2012 Olympics, 
if the Games were awarded to the city. The stadium is being presented as an 
anchor, but as the plan and its financing have evolved, it is starting to 
look more like an expensive albatross.

There are good reasons to press ahead with other parts of the plan, 
starting with an extension of the No. 7 subway line and the creation of 
parks, which would finally make the area an accessible and desirable place 
to live or work. An expansion of the Javits Center is needed, but that 
seems better accomplished by extending the center, not by adding the 
looming space of an adjacent stadium. It's doubtful that a stadium would 
attract the kind of regular convention business the city desires. The Jets 
usually play eight home games a season, leaving a lot of down time to fill.

The Jets need a new home ­ their lease to share the New Jersey Meadowlands 
stadium with the Giants is running out ­ and the owners want to return to 
New York. But that desirable goal does not by itself justify the cost or 
the compressed timetable of the current plan, which would tie up too many 
public resources at a time when there are precious few. While the Jets 
would pay up to $800 million to build the stadium itself, public money 
would be needed to place a platform over the rail yards, as well as to 
install the air-conditioning and retractable roof needed for convention 
business. The public tab would be at least $600 million, and the overall 
cost more than twice that of other recently erected football stadiums.

The rush to a decision on a stadium is being driven in part by New York's 
quest to be the host of the 2012 summer Games. One of the best arguments 
for seeking the Olympics was the impetus it would give the city to push 
forward on needed projects like parks and subway expansion. But that does 
not mean it makes sense to build an expensive and possibly unnecessary 
stadium just to keep the Olympic bid alive. One option would be to 
refurbish Shea Stadium and move the Olympic dream there. The No. 7 
extension should be built as soon as possible, but with maximum aid from 
the Metropolitan Transportation Authority and federal government. The 
hurried pace the Bloomberg administration is contemplating could leave the 
city to go it alone, absorbing an expense estimated to be at least $1.6 
billion.

To recover its huge investment, the city may feel the need to fill the area 
with overly tall, overly dense office buildings. Taxpayers could find 
themselves footing the ultimate bill if occupancy falls short of 
expectations in the development, which would compete for tenants with 
planned developments in Lower Manhattan and Brooklyn.

The Jets are keen on being in Manhattan and on the Hudson. It keeps them 
within easy reach of New Jersey fans. More, it would be the prime home turf 
in the business, perfect for building the highest-priced luxury boxes in 
the National Football League. The team should get a stadium to call its 
own, but building it elsewhere ­ perhaps in Queens ­ would save hundreds of 
millions of public dollars while also providing a desirable Olympics venue. 
The current price tag for placing America's most exclusive 50-yard line in 
Manhattan is too high.


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TO AVOID COMPETING WITH GARDEN, JETS REDRAW PLANS FOR STADIUM ON WEST SIDE
by Charles V. Bagli
NY Times, January 28, 2004

At the urging of state and city officials, the Jets have redrawn their 
plans for a $1.5 billion football stadium on the West Side of Manhattan so 
that it will not compete for events with Madison Square Garden.

The Jets had designed a 75,000-seat stadium with a retractable roof that 
could be converted into a combination exhibition hall and arena, for which 
the team hoped to book conventions, ice shows, circuses and other sporting 
events. The stadium itself would face the Hudson River and sit on a 
platform over the West Side rail yards, between 11th and 12th Avenues, from 
30th Street to 34th Street.

The Garden's complaints emerged as the developer Bruce C. Ratner signed a 
contract to buy the Nets for $300 million and move them to a proposed $485 
million arena in downtown Brooklyn.

But the Dolan family, which controls Cablevision, the publicly traded 
company that owns Madison Square Garden, the Knicks and the Rangers, 
expressed its misgivings about the Jets project in a meeting with Mayor 
Michael R. Bloomberg this month and with the Pataki administration, 
according to state and city officials. They feared that the Jets would be 
chasing the same kind of events as the Garden, effectively cannibalizing 
the market.

The Jets, in turn, have reconfigured the stadium, eliminating plans for an 
arena and re-emphasizing its connections to the Jacob K. Javits Convention 
Center by providing even more space for conventions. Jets executives say 
that under the new arrangement the stadium could provide 200,000 square 
feet of exhibit and meeting space, up from 110,000 square feet under the 
previous version.

"There's been a lot of cooperation between the state, the city and the Jets 
about the stadium," said Charles A. Gargano, chairman of the Empire State 
Development Corporation and the Convention Center Development Corporation. 
"This will alleviate the Garden's fears - and keep the stadium available 
for as many dates as possible for Javits Convention Center use."

L. Jay Cross, president of the Jets, said that the team had been moving 
away from the arena concept as it learned more about the convention 
business. Eliminating the arena, he said, saves money and allows them to 
enlarge the exhibition space, allowing them to book more shows.

"If our neighbors are happier too, it's a bonus," Mr. Cross said. "We've 
come to believe more fully in the building as a convention center. The 
sweet spot for convention business is about 200,000 square feet, the median 
size of a trade show."

Cablevision, which has not taken a public position on the proposed stadium, 
declined to comment on the latest development. But the company is 
continuing to review the project. Still, according to government officials 
and real estate executives, the Garden is talking to Brookfield Financial 
Properties about building a new garden on Ninth Avenue and 31st Street and 
with Related Companies about a nearby site, at the back of the James A. 
Farley Post Office.

The reconfiguration is only the latest attempt by the Jets and state and 
city officials to appease potential opponents of the stadium, which would 
require at least $600 million in public funds.

The hotel industry, for one, has long wanted to expand the Javits 
Convention Center, which runs between 34th and 38th Streets to 42nd Street 
in order to attract larger, more lucrative conventions and fill hotel rooms 
and restaurants. They feared that doubling the size of the Javits to 
roughly 1.34 million square feet would lose out to the city's push for the 
stadium, which also figures in New York's bid for the 2012 Summer Olympics. 
Some industry executives also doubted that the stadium would be used much 
as a convention hall.

Hoteliers became alarmed weeks ago when city and state officials proposed a 
smaller, or two-phased, convention expansion that would go only up to 40th 
Street. To try to mollify the hotel industry, the Jets and city officials 
had talked about building a convention hotel and ballroom at 34th Street. 
That has been scrapped.

State and city officials now say that the current proposal for Javits 
expansion, nicknamed Javits Lite, would provide a total of 1.1 million 
square feet, with another 200,000 square feet at the stadium.

There are still some concerns about using the stadium as a convention hall. 
State and city officials are proposing to raise the city hotel tax by $2 
per night per bed to pay for the expansion. The hotel industry favors a 
mechanism that would include a tax on restaurants and taxis.

"It may not be the perfect solution today, but it's definitely a partial 
solution" said Jonathan Tisch, chairman of NYC & Company, the city's 
convention and visitors bureau, and chief executive of Loews Hotels. "It 
gets us closer to where we need to be as a competitive convention city."