By Sabina Mollot
Following a contentious meeting held earlier in the month by the Stuyvesant Town-Peter Cooper Village Tenants Association, during which the group’s attorney advised tenants not to accept an MCI reduction offer from CWCapital, the special servicer reached out to tenants to discuss terms.
In letters slipped underneath doors in ST/PCV on Friday, CW offered to reduce the cost of the retroactive portions of recently issued MCIs (major capital improvements) by 35 percent, as long as tenants agreed not to try to challenge them. There was also an offer to reduce $15 million on other costs. However, the letter then went on to indicate that CWCapital could end up backing out of the deal.
“It is important to understand that under the Rent Stabilization Laws a small number of MCI appeals can impact the entire community,” the letter stated. “In the event that such a minority of residents seeks to undo the effect of this settlement, we may have no option but to permanently withdraw this offer as the owner will then be forced to defend its rights.”
This letter was swiftly responded to by the Tenants Association’s attorney Tim Collins. In his own letter, he addressed CW’s attorney Sherwin Belkin to say he thought the offer was “disturbing” because “it appears to be an attempt to intimidate those tenants who support the TA’s challenge to the MCIs, by penalizing or diminishing their rights, in direct violation of…. The Real Property Law…”
The Tenants Association, meanwhile, has also taken issue with a series of MCI information workshops being held this week by CW representatives at 360 First Avenue in Peter Cooper Village. In an email to neighbors, the TA blasted the workshops as a ruse to get tenants to sign CW’s agreement rather than inform them about how MCIs work.
“The proposed agreement is illusory, deceptive and unenforceable,” the TA wrote on its website. “The language of the form encourages acceptance while the owner holds a trump card of unilateral termination.”
The TA also noted that CW hadn’t mentioned that the retroactive portions of the MCIs, which for some residents can total thousands of dollars, get paid on a monthly basis (rather than a lump sum), with payments capped at six percent of the tenants’ rent in 2009. As for the $15 million in costs CW offered to waive, the TA said this was “almost meaningless — it consists of sales tax, which can never be included, and other costs DHCR almost never approves.”
On Monday evening, the first of the series of workshops on MCIs saw only a trickle of tenants coming in and out, as well as a few volunteers for the Tenants Association standing outside the building, hoping to talk neighbors out of signing any deal with the de facto owner.
One reason for this is that as of Friday, the state housing agency, the Division of Housing and Community Renewal (DHCR) of New York State Homes and Community Renewal (HCR), has agreed to the TA’s recent request for reconsideration of MCIs for five projects that were authorized by the agency. This means tenants are not yet responsible for paying the retroactive portion, though they will be expected to pay the monthly cost that’s added to their rent in perpetuity until the agency makes a decision.
Three of the MCIs are for Stuy Town residents, and the other two are for Peter Cooper residents. The
MCIs are for work done in 2009 by Tishman Speyer on security upgrades, resurfacing, doors and water valves and tanks. All the MCIs are added to the tenants’ monthly rent with costs varying based on the room count of apartments and whether they’re in PCV or ST, and all have retroactive portions that date back to 2009.
The TA is hoping to challenge the MCIs based on the fact that Collins’ arguments made against them to the DHCR last year were not even acknowledged in the recent awarding of the increases to CWCapital. Additionally, Collins cited violations in some of the buildings, student housing in some apartments and shoddy workmanship on the resurfacing work as well as other factors.
The reconsideration means the TA will not yet be filing a petition for administrative review (PAR), as it had previously planned to do. However, the group is still collecting signatures from neighbors for pledges that would authorize the TA to represent tenants if it does file a PAR, which according to TA Chair Susan Steinberg, will most likely happen. “We’ll pursue it as far as we can carry it,” she said.
Over the years, the state housing agency has rejected almost all of the Tenants Association’s MCI challenges. However, as of Monday, the Tenants Association had collected over 2,000 signatures on its pledge.
While outside the MCI workshop, TA reps, including Steinberg and TA President John Marsh asked residents leaving if they thought they’d be accepting the offer for a retroactive MCI reduction, and a few were undecided.
One man, who moved in last year, said he was concerned that he would have to pay the retroactive portion of the MCI despite being a new tenant. A TA volunteer responded to say he thought the owner would instead have to hunt down the previous tenant to try and collect that amount, though he added something Collins had said at the recent TA meeting, which is that owners making such moves happens pretty rarely.
Another resident, a woman who lives in Peter Cooper, seemed less confused, saying she thought the reduction letter was “a non-offer.”
“I used to sell TV shows, and I learned from my boss I can’t respond to a non-offer,” she said.
When asked what she was told at the workshop, another woman, who said she didn’t know if she’d be taking the deal, said she was told that she’d have to pay “a lot higher” of an amount if she didn’t.
Another resident said she wound up feeling uncomfortable at the fact that there was a guard posted outside the workshop building, and once she went inside, saw that there were two more. Before allowing her into the workshop, the woman, who, like the other attendees interviewed, didn’t want her name published, said she was asked for her address and apartment number. Though the guards were nice, “It just made things uncomfortable,” she said. “If they can’t trust me, how can I trust them? This is a tall order without trust.”
Attending was worthwhile though, she said, since she got useful information about her own particular situation — and extra incentives to sign. Still, she thought she would most likely not take the deal.
John Sicoransa, one of the TA volunteers outside, said that neighbors of his who are “Roberts v. Tishman Speyer” class members “are utterly confused” by the offer. Being former market rate tenants, they hadn’t received notices in 2009 about pending MCIs, which are for rent-stabilized tenants, though they did get the recently issued letter from CWCapital. Additionally, “the post-Roberts people got them,” said Sicoransa.
Future MCI workshops being held by CWCapital will take place on Thursday, November 14 from 5-8 p.m. and Friday, November 15 from 8:30 a.m.-11:30 a.m., both at 360 First Avenue.
A spokesperson for CWCapital did not respond to requests for comment about the MCI workshops. However, the rep, Brian Moriarty, commented on the offer to say it was done in “good faith” and also noted that tenants’ appeals over previous MCIs haven’t gotten them much.
“The owner made a good faith offer to the community,” said Moriarty. “Historically, tenant appeals have resulted in negligible increases after protracted administrative and court proceedings. We do not believe that repeating this process is healthy for the broader community. Assuming that tenant appeals achieve a five percent decrease in the approved amounts (which is more than what has been achieved over the past 20 years of tenant appeals), then it would take the average tenant approximately 25 years to equal the benefit that the owner has volunteered to make. We hope residents review their offers carefully and do their homework to understand the benefit we are offering.”
Marsh, meanwhile, in a written statement, blasted the offer as “an attempt to legitimize an unenforceable scheme” to get tenants to waive their right to challenge MCIs.
“While we appreciate any gesture by management to soften the blow of these increases, it is not enough for them to look at just the retroactive amount,” he added. “We are also concerned with the permanent increase. We will keep all channels of communication open with management while we continue to collect public membership pledges, so we can be in a position of even greater strength moving forward.”
The Tenants Association’s MCI pledge is currently on its website at stpcvta.org.