The Real Deal New York

Supreme Court concurs with ruling for developers in 30 Lincoln Plaza rescission case

October 11, 2010 02:45PM
By David Jones

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30 Lincoln Plaza and Howard Milstein, chairman of Milstein Properties

A state Supreme Court judge ruled against tenants at the 30 Lincoln Plaza condominium who filed suit to overturn Attorney General Andrew Cuomo’s approval of the conversion despite outside buyers getting steep discounts.

More than two dozen tenants, led by Vera Salnikova, president of the 30 Lincoln Plaza tenant’s association, sued to overturn an earlier ruling by Cuomo in favor of the developer. Tenants asked the court to grant rescission of their condo purchases or an amendment to the offering plan, which was approved in August 2009.

In 2007, Milstein Properties submitted a plan for the 30 West 63rd Street building and offered residents in the rental building a 90-day window to buy their units at a 25 percent discount from listed prices. According to court records, the exclusive period for tenants to buy their units was extended four times, until July 22, 2008.

In July 2008, as the real estate market was beginning to deteriorate, the developer offered up to 60 percent discounts to outside buyers, as the lack of financing and weak demand hurt the market for condo sales. By December 2008, the developer submitted an effectiveness amendment to the AG, which included 43 contracts by tenants and 80 contracts by buyers who lived outside the building. Tenants allege some of the contracts included real estate brokers and business associates of the developer.

The developer agreed to pay a fine of $100,000, but did not admit nor deny guilt, and the developer agreed to amend the plan, court records say.

The developer agreed to pay a fine of $100,000, but did not admit nor deny guilt, and the plan was amended to reflect the discounts. Cuomo’s office approved the plan in August 2009.

Tenants immediately filed the so-called Article 78 petition, asking Cuomo to overturn the approval or allow tenants to rescind their contracts and get their deposits back. They claimed that the developer raised rents for non-purchasing tenants to “unconscionable” levels and that Cuomo failed to investigate harassment claims against the developer and properly investigate alleged zoning violations.

The developers denied any harassment, lack of disclosure or other violations of the Martin Act, a business law that governs condo conversions. Judge Saliann Scarpulla ruled that Salnikova was a non-purchasing tenant, and was not entitled to an extended purchase period.

Milstein officials were not immediately available for comment. Officials at AG’s office were not immediately available for comment and nor were lawyers for the plaintiffs.

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