The Real Deal New York

Tenants gain in heated battle over pool at London Terrace

Regulator grants residents $2M abatement if access to complex's swimming facility is withdrawn
By David Jones | August 05, 2014 03:45PM

State regulators have handed a major victory to tenants at Chelsea’s London Terrace in their battle over access to the complex’s swimming pool.

The ruling by the New York State Division of Housing and Community Renewal on August 1 granted the residents a $165-per-month rent abatement for 24 months — assuming access to the pool at the luxury apartment complex is permanently taken away. If the dispute over pool access is not resolved by later this month, the decision by DHCR would add up to about $2 million a year in total rent abatements, according to lawyers representing tenants in the case.

“The London Terrace Tenants Association has taken the position that the elimination of the services should result in a rent reduction that is commensurate with the cost of replacing the services,” William Gribben, a partner at Himmelstein, McConnell, the law firm representing tenants at the complex, said in an emailed statement. “The order reflects this position.”

The dispute centers on the massive 921-unit London Terrace apartment complex, which takes up an entire city block from Ninth to Tenth Avenues and between West 23rd and West 24th streets. The swimming pool and sundeck are located at 470 West 24th Street.

For decades, the pool was included in the rent, but a move by the co-op board to take away access led to a 1992 rent strike by tenants. An agreement was later reached between the co-op and renters granting tenants access to the pool and sundeck for a fee, while the co-op owners were granted reciprocal access to the gardens, which function as a park for residents.

The owners, according to a filing with state regulators, asked DHCR to approve a 300 percent increase in the annual fee that tenants pay to the co-op for pool access, which would have raised the total yearly payment to $750,000, according to published reports. The agreement would have also banned access to the rooftop sundeck.

In the same filing, the owners asked the agency to implement a 1997 order to take away pool and deck access in return for a 2 percent rent abatement, but lawyers for tenants said that was not adequate to fund the cost of replacing such a service.

DHCR, in the ruling received yesterday, cited the monthly cost of the McBurney YMCA and Chelsea Piers — which are both located near the complex – to determine the value of access to a pool. The McBurney YMCA charges $160 a month for a family membership, while Chelsea Piers costs about $165 per person, according to the order.

The existing negotiations are set to continue until late August, when the current extension on the pool access agreement expires.

Tenants at London Terrace are involved in a separate class action case involving allegations of illegal rent hikes at the complex.

A spokesperson for DHCR was not immediately available. Rose Associates, which manages the rental complex was not immediately available for comment. Attorney Bob Goldstein, who represents the owners, did not return calls.

  • Andy Humm

    Several big inaccuracies in this article. I’m the president of the London Terrace Tenants Association. First of all, while London Terrace looks like one big complex from the outside, it consists of 10 rental buildings managed by Rose Associates and four corner co-op buildings managed by Elliman. (The building was built in 1930, the owner immediately went bankrupt during the Depression, and since 1937 there has been separate ownership of the Towers on the corners, which went co-op in the late 1980s, and the Gardens–the 983 rental units in ten central buildings. The Towers (with another four or five hundred units that are co-ops) always allowed the Gardens residents to use their pool and sundeck for a modest fee from management of the Gardens ($5,000 in 1992). After renovations of the pool around 1990, The Towers demanded exponentially more and Gardens owners wouldn’t pay it. The rent strike of the early 1990s was over the warrant of habitabilty–poor conditions in the rental buildings. It is illegal to strike over the loss of amenities, but we did contest that loss twenty years ago at the DHCR and were granted a 2% rent abatement that never went into effect because Gardens owners then coughed up $100,000/year to keep us in the Towers pool. That figure rose to $250,000 over the course of the 20-year agreement, plus shared cost of maintenance of the amenities. Last year, the Towers board wanted to up that to $1.8 million, Gardens owners offered the $500,000 plus repairs and would agree to the $750,000 wanted just for pool access. (The Towers was determined to keep Gardens residents off their sundeck and we have been barred from it this year.) Rose (Gardens management) sought to know from the DHCR what they have to compensate us renters over the loss of the pool and sundeck and the DHCR ordered a $165/mo. rent reduction for each apartment–not for 24 months as stated in this article, but permanently. This may cause Rose to go back to the negotiating table with the Towers to maintain access to the pool and sundeck, but if an agreement cannot be reached our rents will have to be reduced. Also, the pool is accessed through the 465 W. 23rd St. building of the co-op, the sundeck through the 470 W. 24th St. co-op building. From what we’ve heard, the board at the Towers has an interest in keeping their amenities exclusive to the Towers to increase their property values. While losing hundreds of thousands of dollars in annual revenue from the Gardens will raise the already high maintenance fees that their shareholders pay, it is a cost their board can pass along to all shareholders while watching their property values continue to climb.