The Real Deal New York

Witkoff loses rent appeal at Columbus House

Recent decision could impact thousands of former Mitchell-Lama apartments

January 04, 2011 05:06PM
By David Jones


Steven Witkoff, CEO of the Witkoff Group, and Columbus House at 95 West 95th Street
In a decision that lawyers say could impact 17,000 current and former Mitchell-Lama apartments statewide, an appellate court ruled Dec. 28 that tenants at Columbus House, a former Mitchell-Lama building on the Upper West Side, were protected against rent increases after the building was sold.

The Witkoff Group, following the 2006 acquisition of 95 West 95th Street for $68 million, applied for rent increases for 248 individual apartments at Columbus House, but the applications sat at the state Division of Housing and Community Renewal for more than a year. In 2007, the state then moved to close a loophole that would have allowed landlords to convert thousands of Mitchell-Lama buildings to market-rate.

By 2007, Witkoff filed suit in New York state Supreme Court, arguing that the rents in the building were well below existing market-rate ones. Tenants at the site successfully blocked the conversion to market-rate in a December 2009 ruling that was upheld last week.

The latest ruling will allow tenants at Columbus House and other buildings to remain in their apartments at affordable rents, which lawyers said would have otherwise doubled or tripled in some cases.

“The court correctly found that it was never the intention of the legislature to subject tenants to market-level rents when a building leaves the Mitchell-Lama program and goes into rent stabilization,“ said Himmelstein McConnell attorney David Hershey-Webb, who represented tenants during the appeals process.

A spokesperson for DHCR said the agency would not comment, as the case might be appealed to a higher court. Neither Witkoff officials nor their attorneys were immediately available for comment.

Legal experts say the ruling could impact thousands of tenants across the city, as a wave of buildings have been acquired from the Mitchell-Lama program in recent years, with landlords converting vacant apartments and charging market-level rents to newly renovated units.

Hershey-Webb said that tenants at Stellar Management’s Columbus Manor at 70 West 93rd Street and Starrett’s New Amsterdam/Axton at 733 Amsterdam Avenue, for example, would benefit from the ruling, among others.

Stellar, led by developer Laurence Gluck, denied that the ruling would impact any of his buildings.

“Stellar has never employed ‘unique and peculiar’ circumstances in setting their rents,” said a Stellar spokesperson, in an e-mailed statement. “Unfortunately despite abandoning these proceedings years ago, Stellar’s name could not be removed from the caption for legal procedure reasons.”

Starrett was not immediately available for comment.

Unique and peculiar refers to a legal term argument used by Witkoff’s lawyers in their application for rent increases, citing the fact that rents at Columbus House were far below existing market rents in the area.

Leslie Burns, president of the Columbus House Tenants Association, said that Witkoff has been pushing to get market-rate tenants into the building and sees this as a long-term waiting game, as many of the tenants are retired teachers and civil servants who will likely remain in their apartments until they die of old age.

“Everybody is ecstatic over the fact that we’ve won this battle, but I’m a little more concerned because I don’t think the battle is over,” said Burns, who has lived in the building since 1970.

According to Streeteasy.com, rents Columbus House range from $3,600 to more than $5,000 for a two-bedroom apartment. Earlier this year, tenants at the building fought with Witkoff over a plan to add new retail space to the property.

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