[NYtenants-online] West Side Cowardice: Pols Protect Careers, Not Residents
Tenant
tenant@tenant.net
Mon, 15 Nov 2004 15:41:53 -0500
NYtenants Online/TenantNet 11/15/04
=================================================================
In this issue...
1. West Side Cowardice: Pols Protect Careers, Not Residents
2. Preferential Rents will Hold in Some Circumstances
3. Case decision: 448 W. 54 St. Corp. v. Doig-Marx
=================================================================
WEST SIDE COWARDICE: POLS PROTECT CAREERS, NOT RESIDENTS
By John Fisher
The Bloomberg administration’s plans to develop Manhattan’s West Side are
like a classic Ponzi scheme. The deception is not only in the Doctoroff
junk bonds (which even Wall Street investment banks are avoiding), but also
in the idea that the schemes have meaningful opposition.
Behind residents’ backs, West Side elected officials are promoting the
Chelsea/Clinton neighborhoods as a sea of skyscrapers. Despite their public
protests, none of these elected officials really oppose the Mayor’s plans.
The sell out of the West Side has never been so clear. In September,
Christine Quinn and her Manhattan City Council colleagues voted to bulldoze
major portions of Chelsea/Clinton for an expanded Central Business District
of office towers.
Things are no better in the state Legislature, where in June
Assemblymembers Richard Gottfried and Scott Stringer participated in a mock
hearing that denied community groups the opportunity to testify against the
proposed doubling of the Javits Convention Center’s size, so it would
stretch from 34th to 42nd streets.
State Senator Tom Duane, long considered a tenant warrior, held a West Side
forum but failed to invite the opposition!
You could not escape the commercials or the mangled news coverage this
summer. The so-called public debate has been dumbed down to the clash of
the New York Jets versus Cablevision, owner of Madison Square Garden. Many
think the issue revolves around the proposed Jets stadium and nothing else.
But the stadium is just a small part of a much larger scheme to re-create
over 90 blocks of Chelsea and Clinton/Hell’s Kitchen. The Hudson Yards plan
(28th to 42nd streets, west of 8th Avenue) calls for 28 million square feet
of office towers -- the equivalent of 14 Empire State Buildings -- and 12.5
million square feet of luxury residential towers, an extension of the No. 7
subway to the Javits Center, and a new boulevard from 33rd to 42nd streets
that would displace businesses and residents. The West Chelsea plan (16th
to 30th streets, west of 10th Avenue) would create a Miami- like Co-op
Coast on the Hudson River.
For those who think a 75,000-seat stadium would create unacceptable traffic
on ten Sundays a year, consider the impact of 125,000-150,000 additional
people filling up the office towers every day. Add to that about 10-15,000
cars and trucks.
And with every new tower, it’s only a matter of time until tenants in
nearby rent-regulated apartments, public housing, and low-income co-ops
will feel increased displacement pressures. Small neighborhood stores won’t
stand a chance. Good-bye affordable food, hello more Starbucks. There’s no
room for low and middle-income residents on the Brave New West Side.
Indeed, the plans are so large and so onerous that many opponents, if faced
with the choice, would choose a stadium if the rest of it would just go
away. THAT IS, UNLESS YOU HOLD PUBLIC OFFICE. Just like “Through the
Looking Glass” where what’s up is really down, those elected officials
claiming to oppose the stadium are really in favor of the broader and more
destructive West Side plans.
HOW THE WEST SIDE WAS DUPED
For the last two years, Westsiders have been sheep being led to slaughter,
not by the likes of Mike Bloomberg or Deputy Mayor Dan Doctoroff, but by
their local elected officials: Christine Quinn, Thomas Duane, Richard
Gottfried, and others. It became necessary for them to get the opposition
out of the hands of community groups who might think for themselves and who
just might hold them accountable. It was no surprise last year when this
author received a call from Gottfried’s chief of staff, demanding we drop
our opposition to everything but the stadium. That was not acceptable.
Quinn, Duane, Gottfried, and Community Board 4 (whose members are appointed
by Manhattan Borough President Virginia Fields) created an opposition group
called Hell’s Kitchen/ Hudson Yards Alliance (HK/HYA). The result was to
weaken legitimate opposition and give the mayor most of what he wanted.
The group used a $50,000 grant from Deutsche Bank, which has a deal with
the Bloomberg administration to finance many of the luxury residential
towers. Created behind closed doors, HK/HYA was controlled by the elected
officials and one of Hell’s Kitchen’s landlord-developers, Joe Restuccia,
who just happens to acquire city-owned buildings in exchange for supporting
administration goals.
The HK/HYA plan is very similar to the Mayor’s plan. It has the same amount
of office space, the subway extension, the boulevard, and the doubling of
the Javits Center. Other than lacking a stadium and putting towers on
different corners, you could barely tell the difference.
Dick Gottfried tried to sell their plan at the Regional Plan Association’s
April conference (where community groups were not invited). While HK/HYA
was selling itself as being against the stadium, they were not telling
Westsiders what they really supported.
In 2003, CB 4 (run by the same people who run HK/HYA) told City Planning
and the mayor they could accept all of Hudson Yards except for the stadium.
By giving away everything at the outset, they undermined any meaningful
opposition. That left little room for subsequent negotiations, and now they
can’t understand why the mayor and Doctoroff are ignoring them.
Now another group, the New York Association for Better Choices, has
emerged. It includes HK/HYA, but it is controlled by Cablevision, owners of
Madison Square Garden. They also support everything except the stadium.
Cablevision’s hijacking of the opposition allows the mayor and the Jets to
raise legitimate questions of MSG’s own tax-free status, weakens the
opposition, and frames the debate on narrow issues.
Cablevision’s goal is not even the stadium, but the retractable roof that
makes it competition for MSG. If the roof went away, Cablevision might
fold, and then were would we all be?
APPROVAL PROCESS A STACKED DECK
In June, Bloomberg’s Hudson Yards plan started going through the Uniform
Land Use Review Procedure (ULURP) with public hearings by CB 4, the borough
president, City Planning, and the Council.
On Sept. 21, the Manhattan Borough Board approved the plan. The Borough
Board is composed of the community boards, the Manhattan Councilmembers,
and Borough President Virginia Fields. They voted unanimously with one
abstention to bulldoze much of the West Side. While they asked for some
affordable housing, that is unlikely to happen. The approved plan would
guarantee a wall of luxury high-rises, and would likely result in a net
loss of affordable housing. A small percentage of affordable housing is not
an excuse for tearing up neighborhoods.
Councilmember Christine Quinn, breaking her pledge not to accept developer
campaign money, also voted to clear out much of her district and ultimately
many of her constituents. Going along with Quinn were Councilmembers Alan
Gerson, Gale Brewer, Phil Reed, Robert Jackson, Bill Perkins and Eva
Moskowitz. Margarita Lopez was counted as an abstention, but said she would
have voted for it had she been there. Gifford Miller, as speaker, does not
vote with the Borough Board, but he has already signaled strong support for
the plan.
And when given an opportunity to pass a resolution against the stadium,
they declined to do so. Despite all their complaining, Councilmembers do
not want to go on record as actually fighting the stadium.
The net effect of the Borough Board vote is more political than binding. It
advances the Hudson Yards plan and tells Manhattan residents that their
representatives value developer campaign donations more than they do their
constituents, and they are willing to sell out neighborhoods on a whim.
Quinn is running for City Council Speaker when Miller is term-limited out
in 2005. Reportedly, she wants his support, along with that of the
construction unions and developers.
There are separate tracks for approving the Javits expansion and the
stadium. The Senate and Assembly must agree on a Javits bill, but the only
hearing on it was one-sided. While the rationale for doubling the Javits’
size is jobs, the convention industry is shrinking nationally, and the glut
of new and expanded convention centers across the country are sitting empty
or selling space at rock-bottom prices. Assemblymembers Gottfried and
Stringer -- who claim the public view has taken a back seat -- participated
in the hearing where community opposition testimony was prohibited.
The stadium needs even less approval, as it has to pass only the MTA board,
the Public Authorities Board and the MTA Capital Program Review Board.
Assembly Speaker Sheldon Silver could veto it, but there’s no vote and no
referendum. For that and the Hudson Yards, is Gottfried protecting his
flank and the interests of Speaker Silver? Rent-regulated tenants know from
hard experience how resolute the Assembly really is.
Aside from its impact on the West Side, the cost of entire plan (stadium,
Javits, subway, Hudson Yards, etc.) is topping the $9 billion mark, most of
which is public money. Add to that the Olympics costs and you get near $12
billion before cost overruns and inflation. If Quinn and others were really
interested in stopping the stadium, all they need to do is introduce
legislation in City Council that would prevent any city money from being
used for the stadium. If it’s really that simple, why haven’t they done so?
-- the above article is a slightly edited from the version that appeared in
the October 2004 edition of Met Council on Housing's "Tenant/Inquilino" and
does not necessarily represent the official views of Met Council. Content
cut from the original version for space reasons may appear is separate
articles.
=================================================================
PREFERENTIAL RENTS WILL HOLD IN SOME CIRCUMSTANCES
by Lynn Armentrout, Esq.
If you have a preferential rent agreement which specifically states that
your preferential rent is to last for the term of your occupancy, then the
recent change in law permitting landlords to abandon preferential rents
does not apply to you.
In the case of 448 West 54th Street Corp. v. Doig-Marx [see text of case
below], published in the New York Law Journal on July 14, 2004 (p. 18,
col. 3), the tenant’s preferential rent rider stated that “the tenant will
be charged, during the term of the tenant’s occupancy, a preferential
rent.” The court held that the legislature and the DHCR did not have the
power to impair pre-existing contractual rights, and that the new law and
rules on preferential rents did not apply to a tenant with a preferential
rent agreement which by its terms is to last for the term of the tenancy.
When I handled this case I was under the impression that Jeffrey
Doig-Marx’s rent rider was unique. I have since seen several that are
identical, and believe that it was a form rider used at one time by many
landlords. I have also seen preferential rent agreements using different
language but clearly stating that the preferential rent is to last as long
as the tenant is in occupancy. If you have such a written agreement
regarding a preferential rent, do not be pressured to give it up when
signing a renewal lease.
While the landlord in this matter has filed a Notice of Appeal in the
Appellate Term, unless the Doig-Marx decision is reversed, it should be
considered a precedent and most Housing Court judges should follow it.
Ms. Armentrout is a tenant attorney in private practice and can be reached
through www.dancinglawyer.com
=================================================================
CIVIL COURT OF THE CITY OF NEW YORK
COUNTY OF NEW YORK: HOUSING PART
----------------------------------X
448 WEST 54th STREET CORP.,
Petitioner, Index No. L&T 56729/04
-against- DECISION/ORDER
GEOFFREY DOIG-MARX,
Respondent.
----------------------------------X
HON. ANTHONY J. FIORELLA, JR., J.H.C.:
Petitioner moves by Notice of Motion seeking to strike respondents second
and third affirmative defenses upon the ground that respondent is no longer
entitled to a preferential rent. Respondent cross-moves for an order
seeking summary judgment as to the second affirmative defense and
dismissing the petition on the grounds that it asserts an illegal and
improper rent. The motions are consolidated and decided as follows.
Essential Facts
Petitioner contends that it is no longer obligate to continue respondents
preferential rent.
In October 1992 respondent executed a one (1) year lease with the
petitioner. Attached to the original lease is a Preferential Rent Rider
which reads in pertinent part: “The parties to this lease agree and
acknowledge that the tenant will be charged during the Terms of Tenants’
occupancy, a preferential rent. The preferential rent is personal to the
tenant named in the lease only and will not inure to the benefit of the
Tenant’s successor or assigns.” It is further acknowledged that the October
and November rents 2003 were accepted and cashed by the landlord at the
preferential rate. From the inception of the lease to the present the
preferential rent rider remained in full force and effect.
In September, 2003, the landlord offered the tenant a renewal lease which,
for the first time in the tenancy, calculated the renewal increase based on
the legal regulated rent as opposed to the preferential rent. In doing so,
the landlord relied on an amendment to the Rent Stabilization Code
regarding preferential rents. The proposed increase would bring the
tenant’s rent from $946 per month to $1,385 per month. The tenant disputed
the applicability of the new law and refused to sign the renewal lease
because the rent charged was improper. The landlord then rejected the
tenant’s tender of rent, purported to “deem” the lease renewed at the
higher amount, and brought this nonpayment proceeding.
Applicable Law
Chapter 82 of the Law of 2003 amended the Emergency Tenant Protection Act
and the NYC Rent Stabilization Code to provide that:
where the amount of rent charged to and paid by
the tenant is less than the legal regulated rent for
the housing accommodation, the amount of rent
for such housing accommodation which may be
charged upon renewal or upon vacancy thereof
may, at the option of the owner, be based upon
such previously established legal regulated rent,
as adjusted by the most recent applicable guidelines
increases and other increases authorized by law...
Chapter 82 of the Laws of 2003, §§ 3, 6.
This amendment codified the holding of Matter of Missionary Sisters of the
Sacred Heart v. DHCR, 283 AD2d 284, 724 NYS.2d 742 (1st Dep’t 2001), in
which the Court rejected the DHCR’s position that a preferential rent, once
granted, becomes the base rent for the entire term of the tenancy, on which
all future rent increases are calculated. The DHCR had relied for its
position on Rent Stabilization Code § 2521.2(b), which then provided:
“Where the legal regulated rent is established and a
rent lower than the legal regulated rent is charged
and paid by the tenant, upon vacancy of such tenant,
the legal regulated rent previously established plus
the most recent applicable guidelines increases...
may be charged new tenant.”
In Missionary Sisters, the lease specifically limited the rent concession
to the term of the lease. The Court held that the above cited section of
the Code did not “dictate the exclusive point at which the legal regulated
rent can be charged if a concession has been granted.” Relying on Matter of
Century Operating Corp. v. Poplizio, 60 NY2d 483, 470 NYS2d 346 (1983), the
Court instead held that the language of the lease, limiting the rent
concession to the particular lease term for the specific reason stated,
controlled over the agency’s interpretation of the regulation.
The DHCR’s rigid rule on preferential rents had its genesis in the
“Collingwood Rule”, which held that if a tenant paid a rent which was lower
than the legal rent, that lower rent became the base rent for all future
increases. Collingwood Estates v. Gribitz, N.Y.L.J. April 24, 1975, p. 17,
col. 6 (Sup. Ct. N.Y. Co.). Apparently, the Conciliation and Appeals Board,
the predecessor agency to the DHCR, applied the Collingwood Rule rigidly,
prohibited the owner from going back to the legal regulated rent even after
the tenant vacated. (See, Warren A. Estis and Jeffrey Turkel, “Rent
Regulations Eight-Year Extension,” N.Y.L.J., July 2, 2003, p. 5, col. 2.)
The above-cited section 2521.2(b) of the Code, on which the DHCR relied in
Missionary Sisters, permitting the restoration of the legal regulated rent
upon vacancy, was a 1987 amendment intended to ameliorate the Collingwood Rule.
Chapter 82 of the Laws of 2003 “roughly codifies” Missionary Sisters. Id.
It did not alter the terms of the lease at issue here. In this case, the
lease rider states, unequivocally, that “the tenant will be charged, during
the term of the tenant’s occupancy, a preferential rent.” The terms of the
new law do not even purport to apply to this circumstance. Aijaz v.
Hillside Place. LLC, 774 NYS2d 662.
In Aijaz, the tenant sued for a rent overcharge based on prior lease
renewals that were calculated on the legal rent rather than preferential
rent. The court dismissed the landlord’s affirmative defense that Chapter
82 of the Laws of 2003 permitted the landlord to abandon the preferential
rent in a lease renewal, in favor of the legal regulated rent holding that
the law did not apply to a preferential rent that was given for
consideration and contracted for the entire duration of the tenancy.
Clearly, with the abrogation of the Collingwood Rule in Missionary Sisters
and Chapter 82 of the Laws of 2003, when a lease specifically limits the
rent concession to the term of the lease, the landlord may charge the legal
regulated rent, with any increases, upon renewal of the lease. Whether that
is the case if the lease is silent on the term of the preference is an
issue not addressed here, since here the lease specifically grants the
preference for the entire term of the tenant’s occupancy.
Here, the application of Chapter 82 to the tenant’s lease would
substantially and severely impair the contract by depriving the tenant of
the benefit of the bargain on the most central term of any lease - the
amount of rent to be paid. The tenant, in entering the lease, relied on the
promise of a preferential rent for the duration of the tenancy, and was
entitled to and did order his personal and business affairs according to
his need for an affordable apartment with reasonably stable and predictable
rent increases. (See 19th Street Associates v. State of New York, 79 NY2d
434, 443).
Laws regulating landlord-tenant relations, particularly to the extent that
they limit the amount of rent a landlord may charge, have long been upheld
as valid exercises of the State’s police power. See, generally, Dawson v.
Higgins, 197 AD2d 127 (lst Dep’t 1994), app. dism., 83 NY2d 996, (1994),
cert. den., 513 U.S. 1077 (1995). The Emergency Tenant Protection Act and
the Rent Stabilization Law and Code were enacted in response to housing
shortages that constituted, and continue to constitute, a serious public
emergency. Id., 197 AD2d at 133; Manocherian v. Lenox Hill Hospital, 84
NY2d 385, 388, (1994), cert. den., 514 U.S. 1109 (1995).
“The regulation of this field has been maintained
‘to prevent uncertainty, hardship and dislocation’,
and to ‘forestall profiteering, speculation and other
disruptive practices.”
Permitting landlords to abandon contractual preferential rents, at their
sole option, does not in any way advance the underlying purposes of the
ETPA and the Rent Stabilization Law and Code, which were designed to
prevent uncertainty and hardship, and to forestall profiteering,
speculation and other disruptive practices. On the contrary, to permit the
landlord to abandon the rent preference mid-tenancy, causing a rent
increase 10 times that allowed under the applicable rent guidelines, would
defeat the purposes of the ETPA and the Rent Stabilization Law and Code.
Although the tenant’s lease provides, at paragraph 4, that “the rent herein
shall be adjusted up or down during the Lease term, including
retroactively, to conform to the Rent Guidelines increases,” the
preferential rent rider prevails over this clause. “It is a
well-established rule of construction that the written or typewritten
portions of an agreement represent an express manifestation of the parties’
actual intentions and take precedence over any inconsistent provisions in
the printed form.” Cale Development Co., Inc. v. Conciliation and Appeals
Board, 94 AD2d 229, (1st Dep’t 1983).
It is clear from the above discussion that the wording in the Preferential
Rent Rider is controlling and must be enforced according to its terms. The
wording contained therein is neither restrictive nor conditional. For
better than 10 years the parties acknowledged their intent and respective
obligations by complying with the rider agreement. Petitioner’s unilateral
change of position predicted in Chapter 82 of the Laws of 2003 (supra) is
simply lacking in merit. To conclude other wise would then allow the
petitioner to walk away from its contractual obligation without redress.
Conclusion
Accordingly, petitioner’s motion to strike respondent’s second and third
affirmative defenses is denied. Respondent’s cross-motion for summary
judgment on its second affirmative defense is granted. Petitioner is
directed to provide respondent with a stabilized renewal lease based upon
the preferential rent rider and applicable rent guideline increase in
effect within 30 days from entry of this order. That portion of
respondent’s motion seeking dismissal of the instant proceeding is denied
without prejudice with leave to renew upon petitioner’s failure to comply
with the foregoing.
This constitutes the decision and order of the court.
Date: New York, New York
June 28, 2004
Anthony J. Fiorella, Jr.