The Real Deal New York

37 state and city lawmakers make the case for 421g tenants

Tish James files brief calling for full stabilization of Downtown buildings under abatement

August 19, 2016 07:00AM
By Will Parker

james garodnick 90west

From left: Letitia James, 90 West Street (Credit: Ken Lund via Flikr), Dan Garodnick and Richard Gottfried

Residents of 90 West Street, who are suing their landlord Kibel Companies for allegedly deregulating apartments rent-stabilized under the 421g program, now have dozens of prominent city and state lawmakers backing them up in court.

Public Advocate Letitia James filed an amicus curiae memorandum in New York State Supreme Court Thursday, enlisting 12 state senators, 12 state assembly members and 13 city council members who are calling on the court to ensure that Lower Manhattan buildings receiving the 421g abatement adhere to its rent-stabilization requirement.

In the memo, the lawmakers argue that a carte blanche for landlords to deregulate 421g apartments would exacerbate the current housing crisis and violate the law.

State senators named in the memo include Adriano Espaillat and Daniel Squadron, who represents parts of Lower Manhattan in the 26th Senate District. Assembly members include Linda Rosenthal and Deborah Glick, and council members include Jumaane Williams, Daniel Garodnick and Margaret Chin, whose District 1 includes 90 West Street. All are Democrats.

The state passed the abatement in 1995 to spur residential development in Lower Manhattan.

Litigation between tenants and landlords over rent-regulation at 421g buildings has intensified over the last year. Landlords have pointed to a correspondence entered into the legislative record by then Republican Senate Majority Leader Joseph Bruno and Republican Mayor of New York City Rudy Giuliani, in which the two affirm that 421g allows landlords to deregulate apartments that crossed the “luxury decontrol” threshold of $2,000 (now $2,700), as with most other rent-stabilized apartments in the city.

Kibel TRData LogoTINY enlisted the help of Giuliani as recently as last year, when the former mayor gave the developer an affidavit upholding a pro-deregulation interpretation of the law.

Tenant groups have vigorously contested this view, saying 421g law clearly requires landlords to stabilize all residential rental apartments for the lifetime of the abatement.

Joel Roodman and Jill Tafrate, who are being sued by Kibel over this issue at 85 John Street, recently obtained something of a counter-Giuliani affidavit in their own case from former Democratic State Senator Martin Connor, the minority leader when the bill was enacted.

Connor maintains that 421g was written with the explicit intention of stabilizing rents at all apartments created with the tax benefit, regardless of rent or tenant income.

None of the senators to sign the 90 West Street amicus curiae served in the legislature when 421g was passed 20 years ago. Two assembly members, however, were in Albany at the time: N. Nick Perry of Brooklyn and Richard Gottfried of Manhattan have held their seats for 23 years and 45 years respectively.

“The law is quite clear that rent-stabilization protection and 421g are totally linked,” Gottfried told The Real Deal. “The one exception that is specified in the statute is an apartment that is occupied as a co-op or condo, so the legislation made very clear that that’s the only exception,” he said.

Sherwin Belkin, an attorney for Kibel, dismissed the amicus curiae as a political move, irrelevant to the facts of the case. He said Kibel would file papers explaining why “the Public Advocate should not be permitted to appear as amicus.” James’ submission, Belkin added, “essentially repeats the same legal errors already made by the tenant-plaintiffs in misstating the law, the applicable regulations and the clear legislative history, all of which demonstrate that the owner was lawfully permitted to deregulate apartments, notwithstanding a 421g tax abatement.”

It is at the court’s discretion to consider the amicus curiae in the ongoing 90 West dispute.

Other active 421g disputes currently embroiled in litigation include Clipper Equity’s 50 Murray Street, where tenants officially filed suit in June.

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