Earlier this month, it appeared there might be another distribution of checks, albeit small ones, to residents of Stuyvesant Town and Peter Cooper Village who’d been represented in the Roberts v. Tishman Speyer lawsuit.
However, that’s no longer a possibility as the money left in that pot is under $33,000, according to tenants’ law firm, Wolf Haldenstein. Had the remaining funds been over $100,000 it would have gotten distributed to tenants, as part of the settlement deal hashed out in 2013. For an amount lower than $100,000, however, the remaining funds are to be split evenly between two nonprofits: the Peter Stuyvesant Little League and the ST-PCV Tenants Association.
Previously, Wolf Haldenstein attorney Michael Liskow told Town & Village it looked like there was going to be over $150,000 left in the pool of damages intended for residents. That money represented checks that were not deposited by a 120-day deadline. But Liskow this week said he later learned the $150,000 figure he got from the claims administrator, which he thought was updated as of the end of January, didn’t reflect withdrawals from the amount during January. He also apologized for providing us with the “stale” figure earlier.
Last October, residents of Stuyvesant Town/Peter Cooper Village who were represented in the “Roberts v. Tishman Speyer” class action lawsuit saw a second wave of payouts from the initial $68.75 million pool.
Now it’s likely that there will be a third round of checks, according to Michael Liskow, who’s one of the attorneys representing tenants from the firm Wolf Haldenstein Adler Freeman & Herz.
As a condition of the second payout, if there was more than $100,000 left after a deadline for checks to be deposited passed, then there would be another distribution. If there was less than $100,000 left, then the remaining funds would be split among two local nonprofits, the ST-PCV Tenants Association and the Peter Stuyvesant Little League.
The 120-day deadline has already passed for most of the recipients but attorneys won’t know the exact amount that’s left in the pool until around March 15. This is when the deadline will have passed for all eligible class suit members. However, as of this week, there was over $150,000 left, Liskow said.
Council Member Dan Garodnick discusses the payouts. (Photo by Sabina Mollot)
By Sabina Mollot
Nearly 2,000 residents of Stuyvesant Town-Peter Cooper Village who were part of the “Roberts vs. Tishman Speyer” lawsuit, which proved apartments were illegally deregulated, will soon see another round of checks.
Attorneys on the case said there was about $450,000 left in unclaimed damages from the suit, which in 2013 resulted in a $173 million settlement for tenants ($68.75 million of that amount being cash and the rest in rent reductions).
On Saturday, the checks were discussed by City Council Member Dan Garodnick at a meeting of the ST-PCV Tenants Association.
Garodnick, who’s a resident of Peter Cooper Village, told neighbors that in order to be eligible for the money, the class action suit’s plaintiffs would have had to file as current, not former, tenants, and have received more than the minimum payout, which was $150. They also would have had to deposit their original check.
In this case, “The checks should be coming in the next few weeks,” he said. Residents will then have 120 days to deposit the money. After that, any unclaimed money, if less than $100,000, will be split evenly between two local nonprofits: the ST-PCV Tenants Association and the Peter Stuyvesant Little League.
According to Garodnick, there are 1,973 people who are eligible for the payout, which would make the average check around $228. This time, no one has to file any paperwork to get their damages.
“This was a big tenant win for our community and for the city,” said Garodnick, who was a member of the “Roberts” class action suit. “I am glad that those who were harmed continue to see compensation.”
Lawyers for tenants said there were over 27,000 tenants and former tenants who were awarded damages from former landlords Tishman Speyer and Met Life. The damages were 100 percent of what the tenants overpaid based on calculations from a very complicated settlement formula, minus 30 percent for legal fees and other fees.
Over 400 people listen as local state elected officials brief them on the uphill battle over the rent laws coming in June. (Photo by Sabina Mollot)
By Sabina Mollot
On Saturday, over 400 residents of Stuyvesant Town and Peter Cooper Village gathered for a meeting held by the Tenants Association that focused on the upcoming expiration of rent laws and the uphill battle tenants would have in trying to get them strengthened.
Speakers briefed the audience on the current power dynamic in Albany, while also telling those in attendance that without tenants writing to Albany lawmakers, especially the governor, the effort is a lot less likely to succeed.
“If I go to Albany and say (to Governor Cuomo) two and half million people are going to be very upset with you, if that’s not clear in the streets and not in the mail in his email inbox, it’s very hard to believe,” said Assembly Member Brian Kavanagh.
Kavanagh was one of the speakers of the event, which was held at Simon Baruch Middle School, along with State Senator Brad Hoylman and TenantsPAC treasurer Mike McKee.
McKee told the crowd if the laws are renewed in their current state, “It would be a terrible defeat for tenants.” Referring to a recent Daily News article that quoted Cuomo as saying the laws and the controversial 421-a tax abatement for developers could possibly just be renewed and not changed, due to the federal investigations being conducted in Albany, McKee added, “I’m sorry, but that is crap.” McKee has said that 421-a is expected to be used as leverage during the rent law negotiations.
Both Hoylman and Kavanagh spoke about Albany’s power system and how with the Senate in the hands of Republicans whose campaigns are financed largely by real estate, the only hope for tenants is in swaying the Assembly, led by Carl Heastie, and the governor.
Meanwhile, Kavanagh has said he wants to close the “LLC loophole” that makes New York one of the few states where each LLC created counts as a separate campaign contributor, but, he admitted, “I’m not sure we’re going to do that this year.”
However, he added that recent media attention on the issue may prove helpful anyway.
“There may an opportunity to shame people into backing off,” he said.
Assembly Member Brian Kavanagh, ST-PCV Tenants Association Chair Susan Steinberg and State Senator Brad Hoylman (Photo by Sabina Mollot)
McKee said that while in the past, major decisions in Albany have been made behind closed doors by the “three men in a room” (the governor, the Assembly speaker and Senate Majority Leader Dean Skelos) this year there might be four — if Jeff Klein is allowed to participate. Klein is the head of the State Senate’s Independent Democratic Conference, a breakaway group that caucuses with Republicans. McKee, who’s often blasted Klein as being a tool of the real estate industry, commented that his participation would only be to tenants’ disadvantage.
As for Skelos, McKee added, “Dean Skelos will not do anything voluntarily to help tenants or to hurt landlords. The Assembly has to do what’s called taking hostages. There are dozens of things everybody wants at the last minute. Some of it is minor stuff, nothing to do with housing even.”
One advantage of tenants, he added, is that with Heastie being new as speaker, “he has to prove himself. He has to be accountable not only to us but the members that elected him speaker.” Heastie has said he considers strengthening the rent laws a priority. That said, McKee warned, there’s still always the possibility a tough talking pol will “wimp out” at the eleventh hour. “There is always a wimp factor in Albany,” he sighed.
As for what tenants could do, he urged people to write to the aforementioned three men (letters rather than postcards), and get three neighbors to do the same as well as turn out, if possible for any upcoming rallies. One rally, organized by the Real Rent Reform campaign and the union 1199SEIU, which is aimed at strengthening the rent laws, is scheduled for Thursday, May 14 at 5 p.m. at Foley Square (corner of Centre and Worth Streets). The group will then march over the Brooklyn Bridge.
“We need a very big turnout,” said McKee.
Another rally is on Wednesday, May 6 in front of Cuomo’s Manhattan office at 633 Third Avenue (between 40th and 41st Streets) from 10 a.m.-noon.
He then claimed to have a plan aimed at shaming Cuomo into helping tenants. McKee declined to discuss this further. “That’s all I’m prepared to say,” he said later.
When taking his turn at the podium, Tenants Association President John Marsh echoed the sentiment of the other speakers, calling on neighbors to get involved. “If everyone takes a small step, we can have a very loud voice,” said Marsh.
He also mentioned a door-knocking campaign that he and Council Member Dan Garodnick led through ST/PCV the following day, with Garodnick’s two young sons in tow. Garodnick later said the building walk-throughs resulted in many tenants being appreciative of the reminder of the looming rent negotiations in June.
Kavanagh, when addressing the audience, said that while he realizes many new residents at ST/PCV probably feel the rent laws have no teeth when they look at the numbers on their rent bills, being rent regulated still offers New Yorkers protections they wouldn’t have otherwise.
“It prevents landlords from arbitrarily evicting tenants and that doesn’t exist for most tenants in the city,” he said.
Because of the outcome of the “Roberts v. Tishman Speyer” lawsuit, all units in ST/PCV will be regulated until the property’s J-51 tax abatement expires in 2020.
Kavanagh reiterated the goals for strengthening the rent laws, which include repealing vacancy deregulation and other policies that give incentive to owners to vacate units such as vacancy bonuses and reforming the way individual apartment improvement (IAI) rent increases are issued. Reform of major capital increases (MCIs) is another goal.
Kavanagh also got a round of applause after saying he wanted to close the preferential rent loophole. Due to preferential rents, which are given to most new residents in renovated apartments in ST/PCV, rent increases can be far higher than those issued by the Rent Guidelines Board, if the tenants’ legal rents are higher than what they’ve been paying (the preferential rent).
“In our community it’s a particular problem due to the way ‘Roberts’ played out,” said Kavanagh. “(Tenants) are facing enormous increases.”
Manhattan Borough President Gale Brewer, who’d been sitting in the audience at the meeting, along with Garodnick, at one point, popped up to comment about preferential rents, which she said was happening all around the city.
“We go case by case and try to fight it but there is no great answer,” she admitted.
The meeting then concluded with a Q&A period, with most of the questions from the audience—which were limited to the topic of rent—being on the theme of MCIs. Tenants mainly asked why they were being forced to pay them. Hoylman and Kavanagh suggested that tenants’ use their frustration and personal experiences as inspiration to write to the governor.
When a woman asked where the mayor was in this fight, saying, “He seems to have had a low profile lately,” Kavanagh responded to say he thought the mayor would be more visible soon. “This is the time we roll out this fight and I think you’ll see the mayor rolling out this fight,” he said. Hoylman added that a lot is done “behind the scenes,” going on to note that this is part of Albany’s dysfunction.
When a man asked if strengthening of the rent laws would help a conversion effort, Kavanagh said he thought it would in that it would help thwart predatory bidders.
Another tenant then asked if it could work to tenants’ advantage if Skelos, who’s being investigated by U.S. Attorney Preet Bharara, were to be indicted. The answer, however, was that it wasn’t likely to have any impact during rent negotiations.
“If he’s indicted and forced to step down, it’s unlikely that he’d go to trial before June and you don’t have to leave office until you’re convicted,” said Hoylman. “It would have a greater impact next year than this year.”
Town & Village later contacted the office of the governor to ask his position on strengthening the rent laws. In response, a spokesperson emailed prepared statements made by Cuomo at the Association for a Better New York breakfast on rent laws and 421-a.
Included in the written statement was a comment that “At a maximum maybe we can make some fine modifications in both of them.”
“The 421-a, first I believe has to be extended and I believe that’s essential,” the statement read. On changes to it, which he said he believed were needed, he said, “If it was a different time in Albany, frankly, and Albany was a little bit more of a stable situation I would normally take those negotiations to Albany and try to work it out among the parties. Albany has a lot going on right now let’s say, so I’m hoping and I’m asking the parties to work out the disagreements among themselves or their desires for modifications. If they can great, in any event 421-a has to be extended.”
He went on to say, “Rent has to be extended. It is a New York City issue. If we don’t extend rent you would have chaos in the real estate market, these are rent regulations, rent stabilization etc. You would have chaos in the real estate market unlike anything we have seen because it regulates the private industry not another government. It lapses one day you will see real estate entities and landlords start rising rents and evicting tenants. I mean it would be immediate mass mayhem.
“So at a minimum we have to extend those protections but in truth, because everyone has been watching the situation, to have these final negotiations on these delicate points is going to be problematic this year. So, at a minimum rents extended 421-a, is extended. At a maximum maybe we can make some fine modifications in both of them. The democratic assembly is going to be more aggressive on extending rent than the senate Republicans. 421-a, both houses want.”
A spokesperson, Frank Sobrino, when asked if the governor could clarify what was meant by “fine modifications,” said this was a general statement in response to suggested changes. He also denied that the statements were an attempt to remain neutral.
“He said that ‘at a minimum,’ both rent regulations and 421-a must be extended,” said Sobrino. “That’s not neutral.”
By Sabina Mollot
Developer Gerald Guterman, who recently expressed his desire to see Stuyvesant Town tenants organize to demand a conversion and re-settle the “Roberts” and MCI settlements, while also hiring him as a consultant to help with the effort, has continued to pursue tenants as clients by drawing up a contract over the weekend.
However, he wants to see at least 5,000 tenants participate in such an effort. Otherwise, he warned, his LLC company, West Palm Beach-based Guterman Partners, won’t take the job.
“Before we can accept an ST/PCV assignment, it will be necessary for at least five thousand (5,000) separate residents families to sign a Consulting Agreement with a consulting subsidiary of Guterman Partners, LLC,” he said.
In exchange for his services as an independent contractor, he’d get $10 per participant (a total of at least $50,000).
His statement was part of a letter he wrote directed to tenants (though so far unmailed) asking them a number of questions such as whether tenants were told they’d be charged for the MCIs they received and for the “Roberts” tenants, if they received “the full dollar recovery” in damages for all the rent they overpaid. The letter also went into quality of life issues.
“ST/PCV residents, were you told (when you signed your lease) that the building you lived in was being converted to ‘high population’ student/dormitory housing?” He also blasted the recent concerts in the Oval as a scheme to attract students.
He also said, after the news that CW’s parent company Fortress was preparing a bid of $4.7 billion, that he wasn’t sure he was still interested in preparing a bid of his own, preferring instead to be a consultant in a tenant-led effort.
The contract itself, while saying Guterman would provide consulting services, makes no mention of the re-settlement of litigation, student housing or other issues he wants tenants to fight. Those issues are instead mentioned in the letter. Questions include asking if tenants were told, upon signing their leases, that the Oval would be rented out for commercial purposes or that businesses would come “alive” right on the Oval or that the quiet of tenants’ apartments would be disrupted “because the landlord is using mass-entertainment to attract students to the recently converted dormitory housing?”
He also invited tenants to contact him through the email address: firstname.lastname@example.org.
A spokesperson for CWCapital declined to comment on Guterman’s letter.
As for the odds of Guterman being able to secure all the signatures he wants, it may prove a challenge. In May, 2013, attorneys representing tenants in the “Roberts” suit had a tough time just getting tenants to file their paperwork authorizing them to receive their damages checks. So much so that the Tenants Association and local elected officials stepped in to go door to door in ST/PCV in an effort to get tenants to file. This, recalled lead “Roberts” attorney Alex Schmidt, was even after all the “Roberts” tenants received documents in the mail with application forms.
Schmidt declined to comment on Guterman’s letter.
In previous statements directed at tenants, Guterman urged a “gloves off” fight in court against CWCapital in order to renegotiate “Roberts” and the MCI settlement and force a conversion and the end to student housing and apartments with pressurized walls.
When asked about this, an attorney very familiar with “Roberts,” Leonard Grunstein, said he thought that a court agreeing to re-consider the case was highly unlikely. After Stuy Town was put up for sale by Met Life, Grunstein was hired by the Tenants Association to help with a tenant-led bid. It was then that he discovered that landlords benefiting from J-51 tax abatements could not deregulate apartments, which is what ultimately led to the “Roberts” lawsuit.
“I don’t think that can change,” said Grunstein. “Anything is possible, but it doesn’t sound realistic. You would have to prove that they are overcharging new tenants.”
Another attorney, Jeffrey Turkel, who represents owners and groups representing the real estate industry, told Town & Village that generally, courts don’t like to overturn cases.
Turkel, along with a partner at his firm, Rosenberg & Estis, represented the Rent Stabilization Association, an owners’ organization, in “Roberts” when the RSA submitted an amicus brief, or document in support of Tishman Speyer.
Although he didn’t want to comment on “Roberts” specifically, Turkel said, “If someone wanted to undo or overturn a stipulation, they would have to establish fraud or mistakes or overreaching or something like that. Once a stipulation of a settlement is signed by two parties it is binding. What courts don’t like is for people to sign a stipulation and then come back and say, ‘We didn’t mean it.’ That’s basic, settled New York law. Otherwise, you’d have chaos.”
The Tenants Association, meanwhile, responded to the letter by defending its own conversion plan and partnership with Brookfield Asset Management.
“Now that our property is in play again, we expect old and new players to surface from time to time,” TA Chair Susan Steinberg said. “We are committed to delivering on our goals of long term affordability and stability for this community, and believe we have the right advisors and partners to accomplish that goal.”
Tenants’ lead attorney on “Roberts v. Tishman Speyer” Alex Schmidt (Photo courtesy of Wolf Haldenstein)
By Sabina Mollot
With the deadline for “Roberts” tenants and former tenants to file objections to non-payment deductions and retroactive MCIs having passed on Monday, attorneys have counted objections from 125 people. This is after over 5,000 “Roberts” plaintiffs received non-payment deductions (NPD) and former tenants in the class action had to pay retroactive MCIs, which were reduced or eliminated for current tenants only.
As of Monday, attorneys said there were 81 objections to the deductions from tenants believed by CWCapital to be in arrears with their rent, 22 objections to the retroactive MCIs, and 24 objections to both the arrears and the retroactive MCIs. While attorneys said they had not yet had a chance to review all the complaints, it did appear that the NPDs were being challenged because tenants thought they were inaccurate and former tenants’ reason for objecting to the MCIs was mostly lack of notice.
However, attorney Michael Liskow, of the firm Wolf Haldenstein, said former tenants were notified about the MCIs to be paid to the owner in the “Roberts v. Tishman Speyer” settlement agreement and the notice of the settlement that was sent to all the class members.
In some cases, former tenants may have been unaware of the MCIs due to their having moved out by the time they were finally approved by the state housing agency last fall. But even without notice, the MCIs have to be paid as a result of the settlement, attorneys have said.
Although over five thousand ST/PCV residents and former residents had non-payment deductions taken out of their “Roberts” damages checks, so far, it looks like only dozens are attempting to try to get that money back.
As of Monday, July 21, only 78 people had filed to object to CWCapital’s claims that the owner was entitled to the money. This was one week from the deadline to object, July 28.
Alex Schmidt, tenants’ attorney in “Roberts v. Tishman Speyer,” said he isn’t expecting that there will be too many additional objections before time is up since people with objections don’t typically wait until the last minute. As for why more tenants aren’t challenging the deductions, Schmidt guessed this is because more than half of the deductions were for amounts lower than $100 and that in other cases, tenants may have just been aware they owed the money.
At this time, Schmidt said he doesn’t know how much money tenants are fighting to get back or what kind of payments are in dispute. Attorneys won’t be calculating the total until all the challenges are in, since CWCapital has said it won’t negotiate until then.
Susan Steinberg, chair of the Stuyvesant Town-Peter Cooper Village Tenants Association, said the Association has heard from a number of tenants concerned about the accuracy of their deductions. However, the TA doesn’t know how many people went on to challenge them.
In addition to the 78 objections, Schmidt said 30 former tenants who were mistakenly paid from a pool of money intended for the distribution of damages to current tenants have also submitted claims. This is because current tenants had 30 percent of their damages taken out for legal fees and expenses. Former tenants meanwhile, got 110 percent of their damages (before MCI deductions) since there was more money left over in that pool due to fewer people filing. Schmidt said that is currently being corrected.
Former tenants hoping to fight their MCI (major capital improvement) deductions may have a tougher time, since, according to Schmidt, the owner is entitled to the money. It’s different, he said, if the former tenant thinks they might have been calculated improperly.
“Roberts” plaintiffs who want to challenge a deduction can do so by contacting the Berdon Claims Administration, either by email through the contact link on the BCA website, www.berdonclaims.com, or by calling (800) 766-3330.
Jennifer Kops, pictured with daughter Kiki at a Peter Stuyvesant Little League Parade in 2013, has moved within ST/PCV three times in four years. (Photo by Sabina Mollot)
By Sabina Mollot
Last week, residents and former residents of ST/PCV who were members of the “Roberts” class action finally received their long awaited damages checks.
As Town & Village first reported, over 5,000 of them received non-payment deductions and class members who were former residents were subject to retroactive MCI fees.
This week, T&V spoke with a few “Roberts” tenants to ask how the damages as well as the lawsuit itself, which led to lowered rents for many, changed their lives (or didn’t.)
Here’s what they had to say:
Jennifer Kops, a Stuyvesant Town mother of two who works as an administrative assistant, said she didn’t get anything in damages. She thought she’d be getting $434 but didn’t see a dime after legal fees, MCIs and nonpayment deductions. She grew up in Peter Cooper Village and after divorcing, returned over four years ago with children Jack and Kiki. In that time, she and her family have lived in two one-bedroom apartments in Peter Cooper and now a two-bedroom in Stuyvesant Town.
“We’re fine, but the suit didn’t do anything for me,” said Kops. She moved the last time since the upgrade to a two-bedroom was $3,350 a month, only $100 more than what she’d been paying at her last apartment. “Stuy Town is always a little cheaper,” she said.
Though making the rent has never been simple, “we wouldn’t want to leave,” Kops said.
Kops had been on the board of the Tenants Association for a few years, her kids are in the Peter Stuyvesant Little League and she is currently involved in the PTA at her daughter’s school, PS40. There she’s met other moms in similar situations to her own, tenants in Stuyvesant Town, who’ve turned living rooms into bedrooms with either pressurized walls or bookcases for their kids. This is what Kops had done in her last place, but found life in a one-bedroom too difficult.
“The kids are getting older and I needed more space myself. I don’t like sleeping in the living room.”
The new place is on the main floor and she often hears the conversations of the maintenance employees whose lounge is below her apartment, but that’s her only gripe.
“We hear their morning roll call and we can hear them yelling at each other,” said Kops, “but we overlook a garden area. It’s actually very quiet and peaceful.”
Maurice Owen-Michaane (right) and his husband Michael got a $13,000 payout.
Former resident Maurice Owen-Michaane, who lived in Stuy Town for five years until September, 2012, said it wasn’t “Roberts” that changed things for him or his family, but other factors like constant construction that made him think the complex was going downhill and more importantly needing more space after having a baby.
So he moved to Washington Heights where he now lives with his husband and son, and apparently, many other families nearby.
“There are lots of families and kids and strollers,” he said. “It’s nice up here.”
This week, Owen-Michaane went straight to the bank after receiving his $13,000 in damages, which, he said, will be used to send his son to pre-school and pay some of the couple’s student loans, which total $200,000.
“We’re not going on some big vacation,” he said.
Additionally, out of the damages, $1,600 was taken out for retroactive MCI fees. Not having known about that, Owen-Michaane felt that a heads up from the attorneys or tenant leaders “would have been nice.”
Owen-Michaane, who works in real estate sales for the firm Maz Group NY, added, “No one told us anything.”
That said, overall, Owen-Michaane said the suit was definitely still a win for tenants.
“It was a victory for the little guy, the middle class, who usually get forgotten,” he said.
“Roberts” tenant Jill Pratzon, who owns an art restoration business, said after getting her check, she felt misled about the entire lawsuit.
Pratzon, who moved into Stuy Town with her son and husband, a high school teacher, towards the end of the Met Life era, said due to “Roberts,” she got a $90 rent reduction. This brought down the rent for her one-bedroom apartment on Avenue C to just over $3,000. In damages, after deductions, she and her husband each got checks for $37.50.
“I feel like a fool for staying,” said Pratzon, who got a $500 increase at the time of their first renewal when Tishman Speyer took over the property. The couple’ son had just come home from brain surgery, and they asked management to consider not increasing their rent. In response, it was lowered to a $400 increase. Pratzon said she was told at the time that the owner was planting a lot of trees and that she’d love living there because it would be like the Garden of Eden.
“I come home after dark,” she said. “I don’t have time to enjoy the f—ing greenery.”
When Pratzon moved in it was because the building had an elevator and her son was in a wheelchair. “Then he was out and this lawsuit happened and I thought it was going to mean something,” said Pratzon.
Pratzon, who’s 52, said she’s recently begun taking on more clients, working longer hours, six days a week. Now she and her husband are the oldest people on their floor. People in two other apartments moved out this week.
“Everyone is young and coming and going,” she said. “We introduce ourselves and then a few months later, they’re moving out. They’re professionals or about to be young professionals. I’ve got no grievances with them. It’s management.”
Pratzon also pointed out that in order to afford the rent, her family has no savings.
“We’re hanging on with our fingernails. I felt for years that New York doesn’t want us, me with my small business and my husband who helps at-risk kids in Brooklyn.”
Jill Campbell at her new apartment in Williamsburg
Jill Campbell, a documentary maker, moved into Stuyvesant Town in 2008. The following year, with the “Roberts” case being won by tenants, she was attending tenant meetings and hearing about how the apartments were re-regulated and later, about the Tenants Association’s hope of going condo. At one point, she recalled her rent going down slightly as a result of the case, but just last month, after the most recent increase, she felt she couldn’t afford it anymore. And this was after haggling and getting a significant amount shaved off the bill. Campbell asked that the amount of her rent and what she received in damages not be published. However, she noted that due to legal fees, the damages were less than what she thought she’d be getting.
Overall, Campbell, who now lives in Williamsburg, said she doesn’t feel like the lawsuit impacted her, other than if she hadn’t gotten her hopes up for lower rent similar to what those in unrenovated units were paying, she would have moved out sooner.
But that wasn’t the only reason for leaving.
“It felt like we were living in a dorm,” she said. “Especially on weekends when they would leave pizza boxes scattered on the hallway floors. The door badge system particularly felt like an invasion of privacy as I had to register any guest that I wanted to provide a key for. The price tag was way to high to live in a dorm. All the ‘Roberts’ expectations and the town meetings surrounding the case did was to raise false expectations that my rent would be lower and that one day I might buy the place at an inside price. When both of those did not materialize we had no choice but to leave.”
While she doesn’t feel the suit did much for “Roberts” tenants, Campbell said she believes it did help the older residents in that it stopped the wave of primary residence challenges aimed at getting them out.
“I think it was good for the old-timers who now have peace of mind,” she said.
Software writer Nick Furness, a resident since 2001, said he first lived in Stuyvesant Town in a two-bedroom, then moved into a one-bedroom in 2003 when the rent got higher than he could afford. He and his wife, a handbag designer, were okay until the rent there got to be around $3500. They then started looking around at other places and though they found other places in the East Village that were slightly cheaper, “they were horrible.” Plus, Stuy Town rent at least included utilities and the large windows offered a lot of light.
After the market crashed, in 2008 or 2009, Furness said he was able to negotiate a significantly lower rent. He wasn’t aware of the “Roberts” litigation at the time and now wonders if it was the reason he was able to get Tishman Speyer to agree to reduce his rent to around $2600. Since then it’s been slowly “creeping back up,” said Furness and he now pays a little over $3,000.
“We’re happy to pay it because it’s the going rate for apartments in this neighborhood.”
In damages, the Furnesses were due $17,000. After fees, the amount was around $11,000. He was a bit surprised by the amount, admitting he hadn’t read all the fine print of the settlement. “It’s like how no one ever reads the iTunes contract.”
At the end of the day, while Furness said he wished attorneys had done more to protect tenants from high fees, he believes he’s better off with a rent regulated home.
“With the rules in place,” said Furness, “I feel happier staying here than I would being in the free market. When the market went up stupidly, our rent went up 30 to 40 percent. That would have been hard to bear.”
Many “Roberts v. Tishman Speyer” tenants, who received their payouts from the class action suit last week were unpleasantly surprised last week when they saw numbers that were smaller than what they were expecting, in some cases due to money CWCapital believed was owed in back rent. Then there were the legal fees and expenses (roughly 30-32 percent of the damages for current tenants). Former residents meanwhile also had money taken out for retroactive MCIs (major capital improvements). Attorneys have previously said that payments would be 100 percent of what tenants overpaid according to the complicated settlement formula that was recently finalized minus legal fees and expenses. They also warned about the possibility of non-payment deductions. However, some tenants told Town & Village they were still surprised, thinking that the figures they saw on the Berdon Claims Administration website as their payouts were what they’d end up with.
Alex Schmidt, the lead attorney representing tenants in “Roberts,” said the fact that the legal fees were 27.5 percent of the $68.5 million cash to be paid to tenants, and possibly up to $5 million in additional fees if there were sufficient unclaimed funds, was shared with tenants on the Berdon site as well as in court orders. Due to how many files were claimed, attorneys got paid an additional $3 million instead of $5 million. As for the money CW believes it is owed in back rent and has withheld as non-payment deductions, Schmidt said his firm has gotten some calls from people who want to file objections. The MCIs, however, Schmidt said, CW can legally charge to former tenants. The Roberts settlement permitted CW to add all MCIs that were approved by the Division of Housing and Community Renewal to the base rent covering periods before December 31, 2011.
“Thus, the MCI Orders that DHCR approved in late October or early November of 2013 covering improvements made in 2008-2009 are chargeable to all class members under the settlement,” Schmidt said.
Current tenants were covered by a settlement recently negotiated by the Tenants Association that either eliminated or reduced MCIs. However, Schmidt said it is possible that a “Roberts” class member could be paid from the current tenants’ “pool” but still be charged retroactive MCIs if they moved out between May 15, 2013 and the date the MCI settlement was finalized in early April, 2014.
As for why the former tenants stuck with MCIs hadn’t been warned about them, Schmidt pointed out that the five MCIs had only been issued last fall. “It was the timing; no one really foresaw that DHCR would grant in October 2013 MCIs for 2008 and 2009 and allow CW to recoup them retroactively,” the attorney said.
Despite the deductions, Schmidt noted that overall the suit still preserves significantly more affordability in ST/PCV than if there had been no legal challenge at all.
“All one has to do initially is to remember how Tishman Speyer was pushing people out before we filed suit and, had we not won, would likely have succeeded over the past six years to convert most of the 11,250 units into market apartments,” said Schmidt. “The 7,000 units that remained rent regulated are now part of the DeBlasio/Garodnick 6000-unit pledge from Fannie and Freddie to keep those units affordable, which I think would have been much harder if not impossible to obtain had we not won. Then, of course, there’s the $173 million in combined damages and past rent savings that the class realized, and the future rent savings many current tenants will continue to realize.” Schmidt noted that former tenants got 110 percent of their estimated damages (before MCIs or deductions). This, he explained, is because about 40 percent of the dollars from the former tenants “pool” was not claimed so those funds paid all the fees for that pool.
Attorneys also answered some of tenants’ questions via an email blast sent by the ST-PCV Tenants Association. In the email, attorneys reiterated that the one third in legal fees and expenses was due to how many class members filed for damages. If not too many people had filed, tenants could have gotten up to 100 percent or even up to 110 percent of their damages. However, following an outreach effort to class members a year ago, nearly 100 percent of eligible current tenants filed for damages, along with 64 percent of eligible former tenants.
Another question was why former and current tenants were in different pools, which meant they could only collect damages from their own pool, even if there was more money remaining in another pool. This one didn’t get an answer with attorneys citing a confidentiality agreement.
“The attorneys cannot comment on them except to say that the issue of dividing the damages from the Tishman Speyer/CWCapital period of ownership into two pools was one of many involved in the give-and-take of the settlement negotiations,” the firm, Wolf Haldenstein, said. Meanwhile, in the end it wouldn’t have made a difference if the rules were different, because all the money in the former tenants’ pool already went to claimants or attorneys.
Tenants hold signs on the steps of City Hall. (Photo by Sabina Mollot)
Even for Stuyvesant Town, this past week has been an eventful one, with the mayor’s office stepping in to work with the community’s tenants and ownership in an effort to maintain affordability. Though there’s a tight, two-month deadline to work with and discussions about the outcome of said talks have been vague so far, the city’s involvement is still a very significant step.
More local elected officials have also chimed in with the usual promises to not allow a repeat of the 2006 sale, which made ST/PCV the poster child for predatory equity. Tenants have heard it all before of course (since it’s repeated at every Stuy Town and housing related press conference). Still, it never hurts for the rest of the city, including any would-be owners, to hear it too.
What hasn’t really been determined, but hopefully will be, in the next couple of months, is what exactly “affordable” means in the eyes of the owner and the city.
Many of the tenants in Stuyvesant Town/Peter Cooper Village’s renovated apartments are no more wealthy than their counterparts in unrenovated units, who pay significantly less in rent. So simply “maintaining” or rather keeping the rents around what their current levels are doesn’t necessarily translate into affordability for close to half the population.
Council Member Garodnick has said the de Blasio administration has been made aware of this fact. Ultimately, whatever plan the talks wind up leading to, whether it’s a commitment to longterm rentals or a conversion of some sort, we believe the end result should be that those who live in the community shouldn’t live — or continue to live — in constant fear of getting priced out of their apartments or the city. Isn’t that the only real definition of affordable?
By Sabina Mollot
Many current and former residents of Stuyvesant Town/Peter Cooper Village who are members of the “Roberts v. Tishman Speyer” class action are getting less in damages than they were expecting.
Specifically, over 5,000 of them have had non-payment deductions taken out of their damages, as well as close to a third taken out for legal fees and expenses, and in some cases, with money also taken out for retroactive MCIs.
On Thursday, June 12, the overcharge payments from CWCapital were sent out, and those who received non-payment deductions will have 45 days to dispute those charges.
Tenants’ “Roberts” attorney Alex Schmidt said he plans to challenge the “NPD” claims for tenants who don’t think they’re accurate.
As for the reasons tenants got the non-payment deductions, he said he didn’t know since CW wouldn’t provide that information.
“We don’t have access to underlying evidence, so people who believe they’re wrong have to contact us,” said Schmidt.
However, out of the 5,000 non-payment deductions, more than half are for amounts under $100. Those cases may have been attributed to things like late fees or lost key charges, Schmidt guessed. “Collectively those things add up,” he said. “It’s up to the tenant if they feel $25, $50 or $100 is worth fighting for.”
A spokesperson for CWCapital declined to comment on the deductions.As for the major capital improvements (MCIs), it was former tenants who’ve been hit with those since the recent MCI settlement between CWCapital and the Tenants Association only includes reductions or eliminations of fees for current tenants.
“It doesn’t do anything for the former tenants,” noted Schmidt.
One former resident, Steven Zecca, commented on the Town & Village Blog about how he received a rather hefty MCI deduction.
“I received my check on Saturday, June 14th,” he said, “along with a third cut from the original damages amount, a non-payment deduction for back rent of $118 and over $1500 for retroactive MCIs…Stuytown resident from May 2010 through August 2013… Anyone have any idea how these retroactive MCIs work and what I was charged for?”
Schmidt said that attorneys investigated and learned that the law does permit CW to charge retroactive MCIs to former tenants.
Out of a $173 million settlement for tenants in apartments that were illegally deregulated by former owners Met Life and Tishman Speyer, $68.75 million is being paid out to tenants. The rest of the money is in the form of rent savings. “Roberts” tenants and former tenants who were owed money from when Met Life was the owner of Stuyvesant Town/Peter Cooper Village were paid at the end of 2013.
Damages range per person with some getting a minimal payout of $150 and others getting thousands.
The payments are being made from different pools out of the $68.75 million, with the pool of former tenants owed money by CW being the biggest. Schmidt has said tenants could expect to see 100 percent of what they overpaid as calculated by the settlement formula minus legal fees (around 30 percent).
In response to receiving a number of complaints from confused tenants, Council Member Dan Garodnick said he’d asked Schmidt’s firm, Wolf Haldenstein, to send tenants “a complete explanation to address these issues” and soon. And, he added, the firm has agreed.
“It’s apparent that a significant number of people got a deduction that didn’t expect it,” said Garodnick, “and they deserve clarification on what’s going on.”
Correction: The article was changed to reflect the fact that the pool of former tenants is the biggest, not the current tenants, and current tenants could see up to 100 percent of their damages.
Council Member Dan Garodnick, with other elected officials at City Hall, discusses the “CAPE” coalition. (Photo by Ilona Kramer)
By Sabina Mollot
On Wednesday, Council Members Dan Garodnick, Jumaane Williams and Ritchie Torres announced the formation of a coalition of over 40 elected officials who are committed to keeping affordable housing from turning into overleveraged housing.
Specifically, the Coalition Against Predatory Equity (CAPE) was organized in an effort to avoid the type of massive debt deals that have led to the loss of affordable housing like at Stuyvesant Town.
“We have a wide-ranging, diverse group and together we have some powerful principles,” said Garodnick, adding that the coalition is “strength in numbers.”
The four goals of the group are:
To get Fannie Mae and Freddie Mac to commit to not lending to any owner in a deal that puts affordable housing at risk.
Avoid investment of city and state pension funds in deals that harm tenants.
Stop offering tax abatements or subsidies to development deals that would lead to the loss of affordable units.
Come up with legislation aimed at limiting “the abuses of predatory equity, and assists tenants in over-leveraged buildings.”
Garodnick, who released a report about the dangers of predatory equity in April, said the coalition is also concerned about the Stuyvesant Town foreclosure and the reports of a bid by CWCapital’s parent company Fortress.
“We are looking into the appropriateness of all that activity,” said Garodnick, adding that all of the coalition’s four principles are relevant to a post-predatory equity Stuyvesant Town.
Congresswoman Carolyn Maloney, who’s previously authored legislation that if passed, would ensure more responsible lending by Fannie and Freddie, said she’d reintroduce that bill this week.
“Nothing was more shocking about the Tishman Speyer/Stuy Town/Peter Cooper transaction than finding out that the federally-chartered Government-Sponsored-Enterprises tasked with expanding affordable housing were actually investing in a deal that could only succeed by converting as many affordable units as possible into luxury rent apartments,” said Maloney. The congresswoman said she hoped the bill would “send a message that these GSEs cannot game the system and fail to comply with their affordable housing responsibilities.”
Along with politicians, over a dozen organizations, including the ST-PCV Tenants Association, Tenants and Neighbors and the Urban Justice Center, have joined the coalition.
ST-PCV Tenants Association President John Marsh, pictured in May, 2013 with local elected officials and tenants, protests a mid-lease increase. (Photo by Sabina Mollot)
By Sabina Mollot
Following reports that Stuyvesant Town/Peter Cooper Village’s special debt servicer, CWCapital’s own parent company, Fortress, intends to bid on the property on the day of a foreclosure sale, the ST-PCV Tenants Association has organized a rally to protest the way business is being quietly conducted.
Because the Fortress bid has been reported to be $4.7 billion, according to Bloomberg, TA President John Marsh said at that price, the pressure to make a profit is likely to create a repeat scenario of the Tishman Speyer purchase with its business plan of evicting tenants paying lower rents.
“Right this instant we all need to start talking about what we are going to do about Fortress and the other sharks circling us,” TA President John Marsh told neighbors on Facebook. “The writing is on the wall. It’s about to happen again. Tishman Speyer redux. The financial press is speculating, full of scenarios providing detailed financial road maps to our demise.
Another issue is the debate over whether a purchase by Fortress is a conflict of interest, which Susan Steinberg, chair of the Tenants Association, said is difficult to answer without looking at a contract that’s confidential.
“So nobody can read the clauses, and I think that would have been very helpful if some attorneys would have been able to take a look at it,” she said.
“To me,” Steinberg added, “it looks like insider trading. That’s my perception. But without having access to a basic document, it’s really hard to make a judgment call.”
She also said she thought it was disingenuous of the special servicer to refuse to talk business with the TA, after initially saying the company just wanted to wait until the “Roberts v. Tishman Speyer” negotiations were concluded. “They were stringing us along,” said Steinberg.
The Tenants Association announced its own intention to bid, with partner Brookfield Asset Management, in 2011. The TA/Brookfield bid has never had a dollar amount attached to it and that has not changed. However, the TA has stressed that the bondholders would be made whole.
A spokesperson for CWCapital has previously declined to comment on the reported Fortress bid and was not immediately available for comment on the upcoming rally.
The purpose of the rally, the TA said, is to show any potential owner the political might of the tenants.
“It’s to let them know if they think we’re going to sit down and let them roll over us, they’re wrong,” said Steinberg. “If they think we can’t create trouble for them, they’re wrong. We expect the elected officials to continue to support us.”
Marsh added, “We need a responsible owner, who takes the long view and not just someone looking to make a quick buck, getting in and getting out.”
On May 13, CWCapital announced it would begin foreclosure proceedings on a chunk of the mezzanine debt that’s reportedly worth $300 million and set a sale for June 13. By doing so it will be able to take over the property, at least temporarily.
The TA’s rally will begin that day, a Friday at 10 a.m. on the steps on City Hall. Local elected officials are expected to attend and the TA is asking tenants to show up as well.
Tenants Association attorney Tim Collins at a meeting on Saturday (Photo by Sabina Mollot)
By Sabina Mollot
On the heels of the MCI settlement between CWCapital and the ST-PCV Tenants Association, around 250 tenants attended a meeting on Saturday to learn more about what the deal meant for them.
As usual almost all in attendance at the TA meeting, held at the Simon Baruch Middle School, were seniors. A bunch came armed with questions regarding the MCIs as well as quality of life and general affordability issues. However, those with unique circumstances were herded into another room at the school where there were tables to set up to help people understand the figures on their leases and with other problems.
Meanwhile, Tim Collins, the attorney for the ST-PCV Tenants Association addressed the crowd. First, he responded to some “grumbling” the deal has gotten since for most non-“Roberts” tenants, there’s only five percent removed from their monthly payments. Collins argued that as with any settlement, “you have to make deals. You have to trade something.” “Roberts” tenants wound up getting the higher reductions or full eliminations of the monthly payments because, said Collins, “they’re already paying very high rents.”
As a result of the deal, all tenants have had the retroactive portion of their MCIs (major capital improvements) eliminated. As for the monthly or permanent portion, “Roberts” tenants paying the full legal rent get a 5 percent credit. “Roberts’ tenants paying either the maximum modified legal rent or the maximum “Roberts” preferential rent get a 50 percent credit (as determined by the class action settlement). “Roberts” tenants paying less than the modified legal rent or “Roberts” preferential rent get a credit of 100 percent.
SCRIE/DRIE tenants are also exempt from having to pay the MCIs at all.
Non-“Roberts” tenants paying the full legal rent get a 5 percent credit. Non-“Roberts” tenants paying less than the full legal rent get a credit of 100 percent. The credits are retroactive to January of this year and appear as two separate credits on tenants’ rent bill from May (one for May, one for the other four months).
While discussing the settlement, Collins tried to discourage residents from filing individual PARs (petitions for administrative review) since that could unravel the settlement for all tenants, a clause CW insisted on. Those hoping to score a better deal, warned Collins, would have less standing as individuals with the Division of Housing and Community Renewal (DHCR) than a coalition like the TA has. He also pointed out that the TA had been at work for months in the hope of getting the best possible deal.
“I think we accomplished that,” said Collins.
He also shared with tenants that the settlement almost didn’t happen, with the talks breaking down twice. He declined to explain why, but admitted he wasn’t happy about having to agree that tenants would have to give up the option to file PARs.
But in trying to see it from the owner’s side, Collins said, “They wanted there to be finality. They wanted to have peace. They don’t want to fight 500 or 1,000 PARs that disrupt the deal.”
The deal does however make exceptions for tenants who want to file a PAR in unusual circumstances, such as the room count of their apartments being incorrect, since MCI costs vary based on the number of rooms in a unit.
Collins also reminded tenants that even before the negotiations, the TA had managed to convince the DHCR to knock 23 percent off the amount then-owner Tishman Speyer asked for in 2009. The challenge that followed came about after tenants received notices of the approved MCIs last fall and Collins saw that none of his arguments made in 2012 against the improvements, such as shoddy workmanship, had been considered.
The attorney also echoed the sentiment often made by local politicians that MCIs are not just a problem for tenants in Stuy Town, but a result of a law that favors landlords by allowing them to charge in perpetuity for building improvements.
“The main problem is in Albany,” he said.
Collins’ advice: Sign a one-year lease, not two.
Collins concluded his talk by urging tenants who have lease renewals coming up before October to take a one-year lease rather than a two-year one.
The reason, said Collins, who served as the executive director/counsel for the Rent Guidelines Board from 1987-1994, is that the RGB is expected to vote for a lower increase this year than what was handed down in previous years. Even a rent freeze is possible based on the preliminary vote last week. However, the increase voted on won’t go into effect until October.
Collins added that in recent years, the board’s increases amount to “nothing less than a scandal.”
The reason, he said, is that arguments made in support of owners involved projected operating cost increases that were much higher than what they actually turned out to be. At the same time, household incomes were dropping. Collins admitted that when he worked for the board, he took a somewhat hands-off approach, telling its members, “It’s not your job to make every apartment affordable or every building profitable for owners.” But over time, he started to feel like landlords were being given too much and advised the board to implement a rent freeze.
“This year I’m asking for a rollback,” he added.
Following his comments, TA President John Marsh chimed in to say Collins was speaking for himself and not on behalf of the TA, since what kind of lease to sign is always a gamble.
Council Member Dan Garodnick also spoke about the RGB, to recommend that tenants to participate in this year’s vote process by speaking at public hearings about their MCIs. With a new chair and new mayor, Garodnick pointed out that tenants have a better shot at swaying the board this year than they’ve had in the last 20 years. “I would encourage you to make your voices heard,” he said. “It’s quite an opportunity for tenants in this city.”
(Editor’s note: In a recent editorial, T&V also recommended that tenants tell the RGB about their MCIs, in the hope that hearing about unexpected increases tenants are made to pay mid-lease will have an impact on the board’s decision on the annual increase.)
The next public hearing in Manhattan takes place on June 16 at the Emigrant Savings Bank at 49-51 Chambers Street from 2-6 p.m.
ST-PCV Tenants Association President John Marsh speaking at a Tenants Association meeting on Saturday, with Assemblyman Brian Kavanagh, Comptroller Scott Stringer, State Senator Brad Hoylman and Council Member Dan Garodnick (Photo by Sabina Mollot)
Support for tenant-led purchase of ST/PCV
Another issue discussed at the meeting was the future sale of ST/PCV, with Garodnick saying a tenant-led deal has the support of the city’s housing commissioner.
Later, he told Town & Village that along with HPD (Department of Housing Preservation and Development) Commissioner Vicki Been, he’d also spoken with the deputy mayor for economic development, Alicia Glen.
“My sense from them was that they wanted to find a way to be supportive of tenants in our initiative if they can,” he said.
On the other hand, CWCapital has remained unwilling to talk business.
“Not just with us but with anybody,” Garodnick said at the meeting. “We all suspect that a sale is somewhere on the horizon, but we’re not sure when.”
(Three days after the meeting, the plan to foreclose on the Stuy Town’s mezzanine was made public.)
Tenants at the meeting at Simon Baruch Middle School (Photo by Sabina Mollot)
Why tenants are pretty much doomed thanks to Albany and City Hall
As always, there was also much depressing talk about the politics governing rent laws at the event. Local elected officials took turns at the podium explaining why tenant-friendly bills never get anywhere.
State Senator Brad Hoylman reiterated a point he’s made before, saying that until there’s campaign finance reform, the State Senate, which is controlled by Republicans, will remain a place that’s more friendly to landlords than tenants. He noted that many of the Republicans get millions in campaign contributions from real estate interests and also often live in upstate districts where there are few renters. The Olean, NY-based Cathy Young, who chairs the Senate Standing Committee on Housing, Construction and Community Development, has blocked campaign finance reform from even being discussed on the Senate floor, Hoylman said. This, he explained, is why Senate members have been reduced to arguing about yogurt.
“Her district is closer to Detroit than Manhattan,” said Hoylman of Young, who’s also legislatively tried to undo “Roberts v. Tishman Speyer.” “We need to continue to fight for campaign finance reform,” Hoylman added. “It is fundamental to changing the power dynamic in Albany.”
Assemblyman Brian Kavanagh then spoke about how the state housing agency’s new Tenants Protection Unit was in danger of being de-funded by the State Senate.
Also at the meeting was Comptroller Scott Stringer who said that the mayor’s housing plan aimed at building or preserving 200,000 units of affordable housing won’t be enough to make up for the amount of affordable units that are getting lost each year. In the last 12 years,
Stringer said, “rent have skyrocketed by 75 percent,” while in the past 16 years, 400,000 apartments that rented for $1,000 or less disappeared. “Two hundred thousand (units), it’s just not enough to deal with the crisis,” Stringer said.