For more than 45 years, New York wine enthusiast Peter Morrell and his wife, Cathy, rented a penthouse in a pre-war building near the East River. The apartment boasted views of the UN building and a terrace where the family could take in eye-popping firework displays on the Fourth of July.
Not only that, but it was rent-stabilized.
As the years went by, many of the 81 apartments at 865 First Avenue were converted to condos and sold for north of $1 million. But the Morrells stayed put. Why wouldn’t they?
Under state law, their landlord had no choice but to keep renewing the lease at below-market rents — it is still just $3,381 a month — and wait for Father Time to catch up with the fortuitous couple.
But it turns out that even Father Time is no match for New York’s rent law: The Morrells could just assign the lease to their daughter.
The current landlord, Queens-based Samson Management, is not inclined to wait another 45 years. In August 2019, asserting that the Morells were living upstate, it sent a notice telling them to vacate and that their daughter was not entitled to stabilized rent. Rent-stabilized units can only be used as a primary residence.
A legal battle ensued. So far the Morells are winning.
Wines and spirits
Peter Morrell’s family is revered in New York’s wine community. In 1994 it held the first fine wine auction in the city and five years later opened the Morrell Wine Bar & Cafe in Rockefeller Center. The bar, which has closed for the pandemic, offers more than 100 wines by the glass and executives from NBC and editors from Simon & Schuster frequented the spot, according to a profile in Edible Manhattan.
Morrell’s parents, Samuel and Charlotte Morrell, started the family business in 1947, opening a small liquor store on East 49th Street. That was also a crucial year in the history of rent control: Buildings built before February 1947 were subject to a nationwide rent control statute signed by President Franklin Delano Roosevelt.
The federal government got out of the rent-control business when the Korean War ended in 1953, but New York City took up the mantle and in 1969 layered on a new framework: rent stabilization. Two years later, Peter took over the family business and a few years after that he and his wife moved into the First Avenue penthouse.
A major change in the rent law in 1993 subjected the apartment to removal from regulation if it became vacant and the rent exceeded a certain amount. But the Morrells clung to their lease and 26 years later the state legislature ended vacancy decontrol in the 2019 rent law reform.
Trouble with the law
The new statute made it almost impossible for landlords to remove units from rent stabilization — even when the tenants primarily live in a country home (which the Morrells allegedly did), make oodles of money, or die.
But there are a few remaining paths to deregulation. Because the Morrells’ building had been converted to a condominium, rent-stabilized units that go vacant can be removed from regulation and sold.
The premise of Samson’s case is that the First Avenue apartment, between East 48th and East 49th streets, is not the couple’s primary residence. The Morrells also have a place in the Hudson Valley, according to court documents.
But the Morrells say they use the apartment to attend meetings for their wine business in New York City, and that their daughter Tarajia has resided there since 2016. Tarajia Morrell is a freelance wine, food and travel writer who has bylines in WSJ Magazine and Vogue.com, according to her affidavit.
In December, Tarajia filed a petition with the state agency that oversees rent regulation, the Division of Homes and Community Renewal, against the landlord. She claimed that she was entitled to succession rights of the lease, meaning that she would be able to stay there at the regulated rent, which typically increases only 1 percent or 2 percent annually.
In June, the state ruled in her favor. The landlord appealed but last month was denied again.
Samson is not giving up. The firm sued in New York Supreme Court last week, seeking to modify or invalidate the order based on inconsistencies in the freelance writer’s case. For instance, she filed tax returns that listed a post office box rather than the apartment and claimed co-occupancy in 2016, when her parents had a residence in Dutchess County.
Samson Management declined to comment. A lawyer for the Morrells, Andrew Luskin of McLaughlin & Stern, could not immediately respond to a request for comment.