From left: Attorney Sam Himmelstein, Stuyvesant Town and 56 Seventh Avenue (source: PropertyShark)

[Updated 2:47 p.m.] A New York state appellate court ruled yesterday that the landmark decision to protect rent-stabilized
tenants in the Stuyvesant Town and Peter Cooper Village case should be applied retroactively, a move
that could open the floodgates to millions of dollars in rent overcharges at other developments.
The new case, in which the court actually upheld the landlord’s lower court victory, involved a
Manhattan couple looking to overturn a prior rent-decontrol ruling at 56 Seventh Avenue in the West
Village. The tenants argued that the Stuy Town case, called Roberts vs Tishman Speyer, where Roberts was a tenant, should allow them to have their market-rate apartment rents refunded in the form of overcharges.

“The Court of Appeals, when they decided Roberts , specifically left open the question of retroactivity,”
said attorney Sam Himmelstein, who represented the tenants in the new case. “Landlords have been
making motions to dismiss these cases saying that it shouldn’t be applied retroactively. Even though we
lost the case, it’s a massive victory for tenants at large.” [more]

Academy Award-winner Dianne Wiest, who starred in “Hannah and Her Sisters” and more recently, in HBO’s “In Treatment,” has joined a group of tenants at her 229 West 78th Street home in a rent-stabilization lawsuit against their longtime landlord. According to the Post, the actress and her cohorts are taking a page out of the book of the Stuyvesant Town & Peter Cooper Village apartment complex, claiming that their landlord illegally charged them market-rate rents because the 100-unit building was simultaneously getting a J-51 tax abatement from the city between 1993 and 2004. [more]

Laurence Gluck, Independence Plaza North

Manhattan landlord Laurence Gluck illegally deregulated rents for tenants at Tribeca’s Independence Plaza North while simultaneously receiving J-51 tax breaks from the city, a state Supreme Court judge ruled yesterday, taking a page out of the book on Stuyvesant Town and Peter Cooper Village, where a similar ruling was handed down last year. At the 1,331-unit IPN, at 80 N. Moore Street, Gluck facilitated the complex’s exit from the state’s Mitchell-Lama rent-stabilized housing program in 2004 and subsequently jacked up the rents, according to Crain’s. The tenant-led suit argued that Gluck should not have been allowed to raise rents while still receiving tax breaks from the city. Yesterday’s ruling reverses a March state decision that said the rent increases were justified because Gluck repaid the city for the tax breaks when he discovered that they would be problematic. While Gluck is likely to appeal the decision on the five-year-old lawsuit, it represents the latest in a string of setbacks for the landlord, who lost his massive Riverton Houses complex in Harlem to foreclosure earlier this year after failing to convert its 1,230 rent-regulated apartments to market-rate rentals. [Crain's]

[more]

Laurence Gluck, Independence Plaza North

Manhattan landlord Laurence Gluck illegally deregulated rents for tenants at Tribeca’s Independence Plaza North while simultaneously receiving J-51 tax breaks from the city, a state Supreme Court judge ruled yesterday, taking a page out of the book on Stuyvesant Town and Peter Cooper Village, where a similar ruling was handed down last year. At the 1,331-unit IPN, at 80 N. Moore Street, Gluck facilitated the complex’s exit from the state’s Mitchell-Lama rent-stabilized housing program in 2004 and subsequently jacked up the rents, according to Crain’s. The tenant-led suit argued that Gluck should not have been allowed to raise rents while still receiving tax breaks from the city. Yesterday’s ruling reverses a March state decision that said the rent increases were justified because Gluck repaid the city for the tax breaks when he discovered that they would be problematic. While Gluck is likely to appeal the decision on the five-year-old lawsuit, it represents the latest in a string of setbacks for the landlord, who lost his massive Riverton Houses complex in Harlem to foreclosure earlier this year after failing to convert its 1,230 rent-regulated apartments to market-rate rentals. [Crain's]

[more]

Laurence Gluck, Independence Plaza North

Manhattan landlord Laurence Gluck illegally deregulated rents for tenants at Tribeca’s Independence Plaza North while simultaneously receiving J-51 tax breaks from the city, a state Supreme Court judge ruled yesterday, taking a page out of the book on Stuyvesant Town and Peter Cooper Village, where a similar ruling was handed down last year. At the 1,331-unit IPN, at 80 N. Moore Street, Gluck facilitated the complex’s exit from the state’s Mitchell-Lama rent-stabilized housing program in 2004 and subsequently jacked up the rents, according to Crain’s. The tenant-led suit argued that Gluck should not have been allowed to raise rents while still receiving tax breaks from the city. Yesterday’s ruling reverses a March state decision that said the rent increases were justified because Gluck repaid the city for the tax breaks when he discovered that they would be problematic. While Gluck is likely to appeal the decision on the five-year-old lawsuit, it represents the latest in a string of setbacks for the landlord, who lost his massive Riverton Houses complex in Harlem to foreclosure earlier this year after failing to convert its 1,230 rent-regulated apartments to market-rate rentals. [Crain's]

[more]

Richard Lefrak’s organization is a possible contender for Stuy Town

Tishman Speyer Properties and BlackRock Realty were pilloried for aggressively pushing out tenants and running afoul of the city’s J-51 tax abatement rules. But some of the firms that are being mentioned as possible replacements as owners or managers at Stuyvesant Town and Peter Cooper Village — such as developers LeFrak Organization and Rose Associates, and real estate firm Stonehenge Partners — come with their own skeletons in the closet. The New York City real estate world is bracing for a struggle among titans for management or ownership of the 11,200-unit housing complex on Manhattan’s East Side following the announcement  last month that the owners would cede control. Potential parties must negotiate with special servicer CWCapital Asset Management, the majority of which is owned by Canadian institutional fund Caisse de dépôt et placement du Québec. The special servicer represents the interests of the bondholders of the securitized loans on Stuyvesant Town. Other firms being bandied about as possible investors or investors are WL Ross & Co., Centerbridge Partners, Related Companies, WinnCompanies and Prudential Douglas Elliman, according to media reports. The thorny city tax abatement program known as J-51 that contributed to the forfeiture of Stuy Town and Peter Cooper Village has dogged one of the leading contenders for the site, LeFrak. [more]

201 West 92nd Street (source: PropertyShark)

A New York State Supreme Court Judge approved a request by Istar Financial to appoint a receiver at an Upper West Side tenement complex owned by Adorama investor Mendel Mendlowits, who is facing foreclose proceedings at the properties.

Judge James Yates ordered attorney Peter Weiss to take over as receiver of the rental buildings while the foreclosure works its way through the courts.

The judge further ordered that Walters & Samuels, a Manhattan-based property management firm, oversee the properties. Istar, a Manhattan-based commercial real estate lender, filed suit earlier this month to foreclose on the site at 201 West 92nd and 200 West 93rd, after Mendlowits allegedly defaulted on a $46 million mortgage, failed to pay $329,950 in taxes and signed a commercial lease for a pet shop without the prior consent of the lender. [more]

Tishman Speyer is expected to miss a $16 million loan payment on Stuyvesant Town and Peter Cooper Village today, putting the company in technical default on its mortgage after months of speculation that such a situation was imminent. Executives at Tishman, which purchased the 110-building complex with BlackRock Realty in 2006 for a stunning $5.4 billion, told the New York Times that the partners would not be able to pay the entire amount due. Since November, Tishman Speyer and BlackRock have been in negotiations to restructure $3 billion in debt on the properties, now worth just $1.9 billion, according to the most recent appraisal. In October, amid speculation that reserves for the complex were fast depleting, the state’s highest court ruled that Tishman Speyer had illegally deregulated rents for roughly 4,400 apartments because it had been receiving a city tax abatement for renovations at the time. The ruling meant that the owners could owe $200 million in rent overcharges to those tenants. [NYT]

Across town from Tishman Speyer’s Stuyvesant Town and Peter Cooper Village, residents of Independence Plaza North at 80 North Moore Street in Tribeca are hoping the recent rent-stabilization ruling applies to them, too. At the 1,339-unit I.P.N., a case brewing since 2005 argues that tenants’ rents should be stabilized because their landlord received tax abatements through the city’s J-51 program. The state’s highest court recently ruled that the investors owe $200 million to Stuyvesant Town residents who were overcharged on their rents for the same reason. Stephen Meister, an attorney who represented the Real Estate Board of New York in the most recent Stuyvesant Town appeal and also represents I.P.N.’s landlord, Laurence Gluck, said the cases are quite different. In I.P.N.’s case, the city mistakenly continued to grant Gluck tax breaks for two years after he removed the building from the Mitchell-Lama middle-class housing program in 2004, Meister said. After he stopped receiving the abatement, Gluck repaid roughly $17,000. In April, the I.P.N. case was turned over to the state Division of Housing and Community Renewal, which expects to issue an opinion no earlier than January. [Downtown Express]