Apthorp developers sue state housing agency

TRD New York /
Apr.April 25, 2011 04:26 PM

The developers of the Upper West Side’s Apthorp condominium, led by Africa Israel, have filed suit against a state housing
agency alleging the building is suffering financially because an application to deregulate 45 rent-stabilized apartments has dragged on for more than nine months.

Apthorp Associates, in the April 4 lawsuit, alleges the New York State Division of Homes and Community
Renewal has sat on the application since June 2010, and urged the court to force the agency to make a

“DHCR’s delay in processing the proceedings has denied the petitioner an increase in its monthly cash
flow required for the preservation, maintenance and operation of the subject premises,” said Apthorp
attorney Daniel Roskoff, in the petition.

State law allows landlords to convert rent-stabilized units to market-rate if the household income in
a unit passes $175,000 and the annual rent exceeds $2,000 a month. The building, located at 2211
Broadway, has 163 units, nearly half of them filled with rent-regulated tenants.

Lawyers for the tenants were stunned by the filing.

“I’ve never seen a landlord file a mandamus on this,” said attorney David Hershey Webb, who
represents rent-stabilized tenants at the Apthorp. “Clearly what’s happening here is they’re having
money issues.”

Mandamus is similar to an Article 78, where instead of Asking The Court to rule on the validity of an
agency ruling, the plaintiff is Asking The Court to compel the agency to make some sort of determination.

The suit comes three months after the developers sold the Apthorp’s retail space for $37 million to
William Friedland. Andrew Ratner, executive vice president of Broadwall Management, which runs
and partially owns the Apthorp, said the retail sale was a sign of the building’s “financial strength and

Sources familiar with the property and government records show the Apthorp continues to have
ongoing issues with services and construction.

Department of Buildings records show a partial stop work order related to the installation of
laundry equipment in the basement without a permit. In addition, the installation lacked the proper
building materials and the proper sprinklers, according to DOB records.

Former Attorney General Andrew Cuomo approved the conversion of the Apthorp to a condo following
an extensive investigation
amid allegations that the developers,
including Africa Israel and Broadwall Associates, were selling apartments at cut-rate prices to business

No evidence was found to prove those allegations, but sources familiar with the property said that a
large number of buyers have never moved into the building.

Other buyers say the owners are beginning to rent out sponsor-owned units to generate additional
cash flow into the property, which had been facing foreclosure before a restructuring deal was reached
with lenders, including Anglo Irish Bank, which has been selling off nearly all of its U.S loans since the
Irish government announced the bank would be phased out and merged with troubled lender Irish

Earlier this month, the Apthorp developers were sued by former lead developer Maurice Mann, who
claims they reneged on a deal to let him buy an apartment at the Apthorp.

DCHR officials were not immediately available for comment. A spokesperson for Attorney General Eric Schneiderman said he had no comment. And, a spokesperson for the Apthorp said: “We do not comment on pending litigation.”

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