From left: St. Mark's Bookshop, a Brooklyn bodega, Brooklyn BP Marty Markowitz, Stuy Town and Jimmy McMillan

Some of the most powerless New Yorkers are tenants of buildings in limbo because of a recent sale or foreclosure. Some work fruitlessly to disrupt the free market system real estate developers fancy. Either way, the Village Voice released its list of the “100 Most Powerless New Yorkers,” and considering the city’s relationship with the real estate industry, its little surprise that real estate-related stories have a significant presence on the list. [more]

William Koeppel and 350 East 52nd Street (building credit: PropertyShark)The latest lawsuit to emerge from the dust of the controversial J-51 tax rulings at Stuyvesant Town was filed by tenants of 350 East 52nd Street against landlord William Koeppel, Crain’s reported.

Tenants of the 132-unit building allege Koeppel “wrongly treated … plaintiffs and the putative class members as market-rent tenants” even after accepting J-51 tax benefits for building upgrades. The tenants are being represented by William Gribben, a partner at Himmelstein McConnel Gribben Donoghue & Joseph. [more]

Stuyvesand Town and City Council member Daniel GarodnickThe New York state appeals court ruled today that tenants in the blockbuster lawsuit at Stuyvesant Town and Peter Cooper Village will be able to pursue millions in rent overcharges, tossing a move to dismiss the case by MetLife, the original landlord of the Manhattan complex (note: correction appended).

In 2007, Stuy Town residents, led by tenant Amy Roberts, filed a class action suit against Tishman and the previous landlord, Metropolitan Life, alleging they illegally deregulated apartments while receiving J-51 tax benefits, which are designed to help landlords renovate apartment buildings in return for keeping rents affordable.

The decision means that thousands of current and former tenants will be able to pursue more than $215 million in excess rent that was paid to previous landlord Tishman Speyer or MetLife, which had sold the complex to Tishman.
[more]

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]

The attorney to a group of tenants at Stuyvesant Town and Peter Cooper Village has withdrawn a motion to block the complex’s landlords from raising rents on lease renewals beyond the 2.25 percent and 4.5 percent agreements outlined by the Rent Guidelines Board, following a court order soliciting an outside agency to advise on the legal rent-setting formula for the 110-building residential complex.

The State Division of Housing and Community Renewal, the agency that administers the Rent Stabilization Law, is set to “give the judge an advisory opinion on the proper legal formula by April 1,” according to Alexander Schmidt, a partner with Wolf Haldenstein Adler Freeman & Herz, the firm representing Stuy Town’s tenants in Roberts v. Tishman Speyer Properties. TRD [more]

For New York City real estate, 2010 in many ways marked a return to normalcy after the tumultuous aftermath of the financial crisis. As the ubiquitous real estate appraiser and Miller Samuel CEO Jonathan Miller put it: “it was a year of a sense of relief.” City home prices stopped their freefall and sales activity improved considerably from the post-Lehman doldrums. Stalled condominium projects like the Sheffield and 1 Rector Park re-started sales. Mexican billionaire Carlos Slim bought Tamir Sapir’s Fifth Avenue townhouse, the Duke Semans mansion, for $44 million. As the unspoken taboo on ostentatious spending faded, a number of high-end residential properties changed hands at the end of the year, including Brooke Astor’s 14-room duplex at 778 Park Avenue, which finally sold after two years on the market (albeit for a significant discount from its original asking price). Japanese retailer Uniqlo snagged 89,000 square feet at 666 Fifth Avenue’s former Brooks Brothers space for a record $300 million, demonstrating that retail is still thriving along the posh shopping corridor.
But the economic downturn continued to make its presence felt. The office market remained uneven and troubled lender iStar Financial fought to stave off bankruptcy amid lingering fears of a double-dip recession.
Here are The Real Deal staff’s picks for the stories that most altered the New York City real estate landscape in 2010, in alphabetical order. [more]

Tenants at Stuyvesant Town and Peter Cooper Village allowed a year-long freeze on their landmark class-action lawsuit regarding rent overcharges to expire today, but warned that a settlement was not likely before the end of the year, which could lead to a resumption of the case.
“While we remain hopeful a settlement can be reached before the end of the year and without need for further litigation, we are not optimistic,” Wolf Haldenstein attorney Alexander Schmidt, who represents thousands of Stuy Town and Peter Cooper tenants, said in a statement. [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]

The owners of Stuyvesant Town and Peter Cooper Village reached an
interim agreement today on rents with plaintiffs who won a New York
State Court of Appeals ruling in October over illegal rent increases in
apartment buildings with J-51 tax abatements. The agreement, in the form of an order issued by State Supreme Court Justice Richard Lowe (click here for the document), was approved this morning, a spokesperson for the Stuy Town owners said in an e-mail. It would also convert the lawsuit filed by a limited number
of parties to a class action lawsuit, broadly covering Stuy Town. The East Side complex’s owners, Tishman Speyer Properties and BlackRock
Realty, negotiated an adjustment to rents in each apartment in the
lawsuit to a rent-stabilized level, a statement said. The
residents would also be covered by certain rights under rent
stabilization laws, including succession and renewal rights. “In addition, Tishman Speyer and BlackRock have reached agreement with
counsel for the plaintiffs on a more inclusive, six-month agreement
covering a wider range of unresolved issues beyond those addressed in
the interim agreement. The six-month agreement, which is intended to
achieve an expedited resolution of the plaintiffs’ case, is contingent upon
consent by CW Capital, the special servicer acting on behalf of the
property’s senior lenders,” a statement by Tishman Speyer and attorneys
for the residents said. TRD [more]

The recent ruling in favor of tenants at Stuyvesant Town and Peter Cooper Village initially put the city’s landlords on the defensive, but now property owners are asking if the city might owe them money because of the decision. Frank Ricci, director of governmental affairs at the landlord trade group Rent Stabilization Association, said he has fielded calls from “dozens” of landlords asking if the city might owe them for overpayment in taxes. And in recent weeks the law firm Belkin Burden Wenig & Goldman raised more questions in a bulletin, including whether the city must pay landlords for lost tax abatements. Adding to the potential chaos, Stephen Meister, a partner who specializes in real estate law at the firm Meister Seelig & Fein, said he had spoken with building owners who might want to leave the city-run J-51 tax abatement program altogether. [more]