The Real Deal New York

Landlord sues state over electric billing

NYC politicians say suit hampers negotiations

January 29, 2010 12:59PM
By Adam Pincus

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From left: Manhattan Borough President Scott Stringer, Representative Carolyn Maloney, City Council member Jessica Lappin, and State Assembly member Micah Kellner

Major multi-family owner Urban American is suing the state Public Service Commission over electric billing in thousands of units of mostly rent-stabilized apartments in Manhattan.

The New Jersey-based company filed a lawsuit Jan. 15 in State Supreme Court in Albany to overturn a ruling by the commission that blocked the company from individually billing tenants in four Manhattan apartment complexes for electric usage, known as submetering. Currently the electrical charges are folded into the rent bill based generally on the apartment size, not on actual usage.

The case is being closely followed by elected officials including Rep. Carolyn Maloney and Manhattan Borough President Scott Stringer, who urged the state to block the submetering until certain conditions were fulfilled.

This was the company’s second lawsuit against a state agency in four weeks. Last month, it sued the city’s Housing Preservation and Development in Manhattan State Supreme Court. The landlord claimed it was owed $4 million in lost income after the city delayed approval of rent increases for enhanced Section 8 vouchers at three Manhattan complexes. That suit is still pending, the company said.

The most recent court filing came as a result of an application by Urban American in June 2008 to submeter apartments in four complexes.

Three in East Harlem are the 600-unit Schomburg Plaza, with addresses that includes 1295 Fifth Avenue; 760 units at Metro North Apartments, which includes the buildings 1940-1966 First Avenue; and 405 units at 1890 and 1990 Lexington Avenue. The fourth apartment complex is the 1003-unit complex, Roosevelt Landings, at 510-580 Main Street on Roosevelt Island.

Urban American wants to shift to submetering, which means tenants would be billed for their own electric usage instead of being charged a share of the overall power. Submetering is a way to reduce a building’s overall energy usage and conserve energy, it said in the court papers.

As a matter of policy to promote energy efficiency and equity, the state agency says it supports submetering.

In November 2008, the state granted permission for the conversion. However in February 2009, a group of elected officials including Maloney, Stringer, City Council member Jessica Lappin and State Assemblyman Micah Kellner, sent letters to the state agency seeking to overturn the decision.

The officials wrote that the submetering could result in far higher electric bills for some tenants who use, on average, more power, in part because the apartments are electrically heated and the landlord, they said, was not doing enough to weatherize the units.

The commission consented to the officials’ requests and on Sept. 17, 2009, it issued an order blocking the submetering until certain conditions were fulfilled.

Several elected officials said by filing the suit Urban American was harming recent negotiations. The company met on Jan. 7 at Stringer’s Harlem office with several elected officials including Stringer, Lappin and State Senator Bill Perkins.

Lappin, whose Upper East Side district includes Roosevelt Island, said, “It is disappointing. I can’t speak for the other elected officials, [but] if [Urban American] wants us to work with them to build trust with the residents, [the lawsuit] does not help,” she said.

Kellner, whose Upper East Side district also includes Roosevelt Island, said in a statement to The Real Deal, “By filing this challenge, Urban American is undercutting its claim that it wants to go about doing submetering the right way.”

The company, which owns and manages about 15,000 units in the New York area, said the filing was not meant to impact the talks, but was necessary to preserve its right to appeal the September 2009 Public Service Commission ruling, Urban American spokesperson Joe DePlasco said. He said the company continued to work toward a resolution.

“We are hopeful that we can develop a program that allows us to achieve greater energy conservation without adversely impacting residents,” Urban American COO Douglas Eisenberg said in a statement.

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