MCI settlement was best possible deal for tenants, TA attorney says

Tenants Association attorney Tim Collins at a meeting on Saturday (Photo by Sabina Mollot)

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)

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)

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.

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More ‘Roberts’ payments to be sent out this month: Attorney

Alex Schmidt

“Roberts” attorney for tenants, Alex Schmidt

UPDATE: June 4, Attorney Alex Schmidt said a court order had been signed at around 3 p.m.  to authorize the payments and checks should be going out next Thursday.

UPDATE May 30: Attorney Alex Schmidt said he will be going to court on Monday, June 2.

By Sabina Mollot
Current and former ST/PCV residents who are members of the “Roberts v. Tishman Speyer” class action should be getting their rent overpayment checks later this month, the lead attorney for tenants, Alex Schmidt said.
Though they were originally supposed to be paid earlier in the year, there was a delay because CWCapital had claimed many of the tenants owed back rent.
The delay was also due to the settlement between CWCapital and the ST-PCV Tenants Association over five MCIs (major capital improvements). As a result of the settlement, along with the monthly rent increases being reduced or eliminated, retroactive portions of those MCIs were also eliminated for most tenants.
“Once that agreement was signed and announced, we had to go back and make sure all the current tenants who were slated to receive non-payment deductions were not being improperly charged for retroactive MCIs, which the TA’s superb settlement precludes,” Schmidt said.
At this time, the process of awarding damages to over 11,000 people who still need to be paid is almost done, Schmidt said. The attorney, who’s with the firm Wolf Haldenstein, said he’ll go to court this week or the following week to get the next round of payments to class members. Those who are believed to owe rent will still get part of their damages. To get any amount that’s in dispute, the tenant or former tenant will have a 45-day period to object.
Out of a $173 million settlement for tenants in apartments that were illegally deregulated by former owners MetLife and Tishman Speyer, close to $69 million will be 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.
A spokesperson for CWCapital declined to comment.

Reminder: Stuyvesant Town-Peter Cooper Village Tenants Association will hold MCI meeting on Saturday

Tenants Association attorney Tim Collins speaks to residents, while Assembly Member Brian Kavanagh, State Senator Brad Hoylman and TA Chair Susan Steinberg listen at an MCI meeting last fall. (Photo by Sabina Mollot)

Tenants Association attorney Tim Collins speaks to residents, while Assembly Member Brian Kavanagh, State Senator Brad Hoylman and TA Chair Susan Steinberg listen at an MCI meeting last fall. (Photo by Sabina Mollot)

The Stuyvesant Town–Peter Cooper Village Tenants Association will hold a public meeting to decode for residents the terms of the settlement arrived at by the TA and CWCapital regarding recent Major Capital Improvement (MCI) rent increases. The meeting will take place on Saturday, May 10 at 1 p.m. at Intermediate School 104, East 20th Street between First and Second Avenues. Space is limited, so seating will be first come, first served.
The meeting will be divided into three parts:
Part 1. City Council Member Dan Garodnick will sum up the latest news about what we can expect from the new city administration. Tenants Association attorney Tim Collins will explain the settlement and the money it has saved virtually every tenant. State Senator Brad Hoylman and Assembly Member Brian Kavanagh will discuss the outlook for changing tenant-unfriendly laws, how these laws can be changed and how tenant action can help, especially with rent law renewal coming up next year.
Part 2. A question-and-answer period will be devoted to MCIs in general and the settlement in particular.
Part 3. Residents will be invited to move to tables set up by category for guidance on questions or problems regarding their own leases. They are urged to bring copies of their leases so they can get the most informed responses.

Residents mixed on MCI settlement

Those interviewed also question
necessity of improvements made

By Sabina Mollot
Following the announcement last Thursday that the ST-PCV Tenants Association had reached an agreement with CWCapital to reduce the cost of MCIs for some tenants and eliminate them completely for others, tenants have been able to talk about little else. When questioned about their thoughts by Town & Village, a few residents who got the 5 percent reduction of the monthly portion of the MCIs naturally said they wished they’d gotten more shaved off their rent bills. However, mainly what they expressed was their disgust at the system that allows owners to pass the costs of building upgrades onto renters.
“It seems very unfair,” said Katie Bernard, who’s lived in Stuy Town for 10 years. She was especially annoyed that MCIs were charged for the video intercom system, which she said was unnecessary. “I can’t tell you how little it works. I miss the old system. I don’t need a screen.”
Another resident also said she didn’t understand the need for the security upgrades that qualified for MCIs.
“It didn’t make my life any safer,” said Carol Szamtowicz. “These capital improvements, I’m sorry I have to pay for them.” As for the settlement, she thought it was good that the Tenants Association fought the increases, “but,” she added, “five percent isn’t very much.”
Meanwhile, another resident, Bob Novick, said he was glad to hear the retroactive portion of the increases had been eliminated. “They did get the retroactive off and that is significant,” said Novick. However, he too said he didn’t get why the intercom system needed replacing on the tenants’ dime. “We got new intercoms 8-10 years ago,” he recalled, adding that he thought the new ones were “essentially the same. The new ones are more sophisticated, but I’m wondering what the purpose was other than to increase the rents.”
And Bill Oddo, a longtime resident, said he wasn’t impressed with the settlement at all. “I don’t see where the success is when

Tenants Association President John Marsh, pictured last fall (Photo by Sabina Mollot)

Tenants Association President John Marsh, pictured last fall (Photo by Sabina Mollot)

we’re only getting 5 percent off on all those items,” he said. “I have to pay $15 a month for video cameras and they don’t do anything. The security cameras don’t make us safe. They only help after the fact. You can’t possibly monitor 1,200 cameras 24/7.” Besides, he added, “For 65 years, this has been one of the safest communities in the city. It’s safer than St. Patrick’s Cathedral.” Oddo added that together he’ll be paying over $50 a month in MCIs, for improvements he thought his existing base rent should cover. “I can’t figure out why tenants have to pay for them,” he said. “I know (the Tenants Association) tried hard, but they’re losing this battle. People are leaving. Older people are dying and they’re just turning these apartments over. I love young people, but it’s a dormitory.”
In contrast, a “Roberts” tenant interviewed said of course he was glad he wouldn’t have to pay the increases following the settlement. “Less is more,” quipped Henry, who asked that his last name not be published. “Obviously if you’re paying less for your apartment, you’re better off.” But Henry added he wouldn’t be celebrating just yet since he’s been dealing with a lack of heat in his apartment. “I’m in the living room with two comforters and sweatpants,” he said.
On the TA’s Facebook page this week, the TA received heaping praise as well as a few complaints about the settlement.
In response, TA President John Marsh said that, though not part of the recent round of negotiations, tenants’ increases had already been reduced by 23 percent as a result of TA action. This was after the TA presented the DHCR with “detailed explanations of deficiencies” on a building-by-building basis for each MCI application, Marsh explained to T&V. This was when the work was done in 2009. After the agency reviewed the TA’s concerns as well as Tishman’s responses to them, “the total of all DHCR Orders were 23 percent less than the total of MCI rent increase applications filed by Tishman Speyer.”

MCIs will show up on January rent bills

Tenants Association attorney Tim Collins speaks to residents, while Assembly Member Brian Kavanagh, State Senator Brad Hoylman and TA Chair Susan Steinberg listen. (Photo by Sabina Mollot)

Tenants Association attorney Tim Collins speaks to residents about MCIs at a recent meeting, while Assembly Member Brian Kavanagh, State Senator Brad Hoylman and TA Chair Susan Steinberg listen. (Photo by Sabina Mollot)

ST-PCV Tenants Association says it’s negotiating with CWCapital, DHCR

‘Roberts’ payments from Met approved

By Sabina Mollot

Residents of Stuyvesant Town/Peter Cooper Village, who were hit over the last couple of months with a total of five MCIs (major capital improvements), will see those MCIs on their January rent bills.

The ST-PCV Tenants Association warned neighbors of the soon-to-come increases in an email blast on Friday evening. However, the Association said it is continuing to try and reach an agreement with management. The organization also reported that tenants who have already agreed to CW’s offer to reduce their retroactive payments in exchange for not challenging the MCIs could still change their minds.

“CWCapital has asserted that any resident who previously accepted their MCI reduction offer issued in early November will have the ability to participate in any revised terms that are negotiated with the TA,” the Association wrote.

The email also noted that along with management, the Division of Housing and Community Renewal (DHCR) has also been participating in negotiations over the MCIs with the TA. Those talks have been taking place over the last few weeks.

“The Tenants Association entered into these discussions in an effort to reach an agreement that would be beneficial to tenants,” the TA wrote.

“While we hope to achieve a satisfactory settlement, CWCapital will be charging the full MCI increases starting in January 2014. However, should an agreement be achieved, any adjustments to the rent bills will be made and credits will be given in subsequent months. Note that no retroactive portion of the MCI increases should be charged at this time.”

A rep for CWCapital declined to comment on the ongoing talks.

The MCIs were issued for work done in 2009 by Tishman Speyer for security upgrades, water tanks and valves, doors and resurfacing.

In other news, residents who are members of the “Roberts vs. Tishman Speyer” class action suit will get their damages from Met Life by the end of the year.

As T&V reported last week, those residents would be getting 110 percent of what they overpaid in rent to Met, pending approval by a judge. On Friday, “Roberts” tenants’ attorney Alex Schmidt said the judge signed the order and the checks should go out no later than Friday, December 27. Payments from CWCapital should follow, he added, “hopefully” in one or two installments in the next 60-90 days.

Of the 12,000 people who filed claims for “Roberts,” more than 3,000 are getting payments from Met Life.

Stuyvesant Town/Peter Cooper residents won’t see MCIs on rent bills until January

Tenants Association attorney Tim Collins speaks to residents, while Assembly Member Brian Kavanagh, State Senator Brad Hoylman and TA Chair Susan Steinberg listen. (Photo by Sabina Mollot)

At a meeting held on November 2, ST-PCV Tenants Association attorney Tim Collins speaks to residents about the MCIs, while Assembly Member Brian Kavanagh, State Senator Brad Hoylman and TA Chair Susan Steinberg listen. (Photo by Sabina Mollot)

By Sabina Mollot

Residents of Stuyvesant Town/Peter Cooper Village won’t see the recently approved round of MCI rent hikes on their rent bills until after the holidays, CWCapital has announced.

In an email sent to residents on Friday, the special servicer said:

“CWCapital and CompassRock Real Estate have agreed to defer new MCI billing until January 2014. As a result, your December 2013 rent bills will not include the recently approved MCIs. CWCapital, the ST/PCV Tenants Association and DHCR are engaged in discussions regarding the implementation of the MCIs and we will keep residents informed of any developments.”

A spokesperson for management declined to comment further on the delay to implement the MCIs, which the Tenants Association also mentioned in an email to neighbors sent at around the same time in the afternoon as CW’s. The Tenants Association also noted that it was engaged in discussions with CWCapital and the Division of Housing and Community Renewal (DHCR) of New York Homes and Community Renewal (HCR), the state housing agency.

In the past month, tenants have received notices that MCIs (major capital improvements) for security upgrades done in 2009 as well as work done that year on doors, resurfacing and water tanks and valves, had been approved. The Tenants Association has since said it would challenge those MCIs, while CWCapital has made an offer to reduce the MCIs’ retroactive portions by 35 percent if tenants agree not to partake in any challenge. The DHCR, meanwhile, recently agreed to the Tenants Association’s request for reconsideration of the MCIs.

TA blasts CWCapital’s MCI info workshops

Tenants Association volunteers John Sicoransa, Judith Preble Miller and Anne Greenberg hand out fliers that urge tenants not to sign CWCapital's offer while outside 360 First Avenue, where an informational workshop on MCIs was being held. (Photo by Sabina Mollot)

Tenants Association volunteers John Sicoransa, Judith Preble Miller and Anne Greenberg hand out fliers that urge tenants not to sign CWCapital’s offer while outside 360 First Avenue, where an informational workshop on MCIs was being held. (Photo by Sabina Mollot)

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

Tenants Association volunteer John Sicoransa talks to a neighbor on First Avenue. (Photo by Sabina Mollot)

Tenants Association volunteer John Sicoransa talks to a neighbor on First Avenue. (Photo by Sabina Mollot)

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.”

Tenants Association President John Marsh hands out fliers on the MCIs. (Photo by Sabina Mollot)

Tenants Association President John Marsh hands out fliers on the MCIs. (Photo by Sabina Mollot)

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.

Tenants Association to challenge round of MCIs

TA tells tenants: Ignore CWCapital’s reduction offer, 

CW says: We’re trying to avoid conflict

Tenants pack a meeting on MCIs, held at the Simon Baruch Middle School auditorium. (Photo by Sabina Mollot)

Tenants pack a meeting on MCIs, held at the Simon Baruch Middle School auditorium.
(Photo by Sabina Mollot)

By Sabina Mollot

After residents were hit with five MCIs (major capital increases) in October for upgrade projects in Stuyvesant Town and Peter Cooper Village, management firm CompassRock made an offer to try and reduce the retroactive portions of those increases  — an offer that the Tenants Association swiftly responded to, to suggest that neighbors ignore it.

The MCIs were discussed by the Tenants Association’s attorney Tim Collins at a meeting held on Saturday at the Simon Baruch Middle School auditorium.

This meeting, which was attended by around 500 people, took place a day after tenants received a letter from CompassRock, which mentioned that management hoped to work with tenants to lower the amount of retroactive charges in the MCIs “in order to mitigate the impact of this component for our longer term residents.” It also mentioned that some residents — those whose legal rent is higher than their preferential rent (what they actually pay) — shouldn’t see any increases at all.

However, the letter, which was unsigned, then went on to warn tenants that though they have a right to challenge the MCIs, if they did, they could forget management’s offer to try and reduce the retroactive portion, and that even if tenants did appeal, the MCIs would still likely be approved.

“It is our belief based upon legal advice received that at the end of any appeal process, we will obtain all or almost all of the amounts reflected in the orders,” the note read. CompassRock then went on to say management hoped to address the issue with tenants over the next few weeks so the proper amount of rent could be issued in the December bills.

“We hope that our residents take this letter as it was intended — not as a formal legal offer, but as a gesture of our good faith and a commitment from us to mitigate the effect of these orders,” said the note.

A few residents told Town & Village they thought the letter had a threatening tone, and later, Brian Moriarty, a spokesperson for management and special servicer CWCapital issued a statement, explaining that the offer was made to avoid any conflict with the tenants.

“We intend to make public final settlement terms by the beginning of next week,” said Moriarty. “In doing so, we are seeking to mitigate the effect of the MCIs and provide residents with clarity regarding their ongoing rents. As we stated in the letter, we have received legal advice to the effect that all, or almost all, of the MCIs that have now been lawfully approved by DHCR will ultimately be granted, but perhaps after some lengthy and contentious delay.  This does not seem good for the community overall, or for individual residents, and therefore we will seek to waive a meaningful amount of the retroactive charges for residents. We are confident that this gesture of good faith will be positively received by our residents. Obviously, we respect that all residents will need to see the details in order to make their judgment. We assume that the vast majority of residents understand that it is not possible to compromise while simultaneously contesting the compromise. Unfortunately, the way the rent stabilization system works, it seems that appeals from a small minority of residents could disrupt a settlement of which a significant majority of the property is in favor. We feel that it is important people know and understand this.”

But at the meeting, Council Member Dan Garodnick commented on the letter to say that he thought the offer to reduce the retroactive amounts — but not the monthly increase that would be charged in perpetuity — was only made because the monthly increase is added to tenants’ base rents. This would bulk up the property’s rent roll, which would be attractive to a potential buyer, noted Garodnick, while the retroactive charges “do nothing for that.

“While we appreciate the gesture, we may have to challenge them in any event,” Garodnick added. “CW is well aware that we have the ability (through a challenge) to tie the system up for quite some time.”

Tenants Association attorney Tim Collins speaks to residents, while Assembly Member Brian Kavanagh, State Senator Brad Hoylman and TA Chair Susan Steinberg listen. (Photo by Sabina Mollot)

Tenants Association attorney Tim Collins speaks to residents, while Assembly Member Brian Kavanagh, State Senator Brad Hoylman and TA Chair Susan Steinberg listen. (Photo by Sabina Mollot)

Collins also spoke about the offer to say he was confident that the MCIs would be rescinded if appealed due to the fact that his arguments on behalf of the TA on why they shouldn’t be implemented, which were made last year, weren’t even acknowledged in the responses. Previously, he referred to this as a “reversible” error.

“You should ignore that letter,” he said at the meeting, then addressing any CW employees who might be in the audience to add, “That doesn’t mean we’re ignoring it.”

He added that complaints include the TA’s belief that since some of the work benefits ST/PCV’s commercial tenants, they too should share in the cost and that in some buildings, there were “class C” violations found, which would make the owner ineligible for an MCI. There was also the issue that some apartments were being used for student housing. Another argument, specifically against the resurfacing MCI was due to the quality of the work.

“We have 40 to 50 pictures showing what a mess it was,” Collins said. “The workmanship was horrendous. So we were really surprised when these things (MCI notices) started pouring out.”

Decisions on whether to grant MCIs are made by the state housing agency, the Division of Housing and Community Renewal (DHCR) of New York State Homes and Community Renewal (HCR). The applications for the MCIs were made in 2009 by then-owner Tishman Speyer for security upgrades, including a now destroyed command center and video intercoms in Stuyvesant Town as well as (for Peter Cooper residents) work on water valves and tanks and (for Stuyvesant Town residents) resurfacing work which was bundled with charges for doors and water tanks and valves. Costs of the different MCIs vary per tenant, but all include retroactive portions to account for the time from when the work was done to when the decision to authorize the MCI was granted.

Only half jokingly, when Collins took the podium, he slammed down a pile of paperwork that was about six inches thick. Collins then told the audience that if he wasn’t confident about getting results from the HCR, he wouldn’t have shown up at the meeting. “I would not have canceled my proctologist appointment,” he said.

The attorney also asked residents to sign a pledge, which would allow the TA to represent them in a joint petition for administrative review (PAR). Collins has asked that tenants not file their own PARs, unless they have “unique circumstances,” since the TA believes a joint argument will have more strength. The TA is also preparing another document called a request for reconsideration.

On CW’s current offer to tenants, Collins said it could later cause increases for tenants whose preferential rents are lower than the legal rents, which are the maximum amounts an owner can charge.

“You have to understand how preferential rents work,” he said. “Preferential rents can be changed upon a renewal. They might say, ‘Right now you see no change, but next time we’re going to raise it.’”

He added, “I think we’re prepared to ask for more. A lot of the work was shoddy. A lot of the work was redundant.”

SCRIE, DRIE and MCI legislation

Along with Collins, other speakers at the event, which was emceed by TA Chair Susan Steinberg, included local elected officials such as Garodnick, Assembly Member Brian Kavanagh, Congress Member Carolyn Maloney, Borough President Scott Stringer and State Senator Brad Hoylman.

While at the microphone, Hoylman mentioned that there is currently some relief from MCIs for tenants who are eligible for SCRIE (Senior Citizens Rent Increase Exemption) and DRIE (Disability Rent Increase Exemption). Through those programs, tenants would be locked into the rent they paid when they first signed their lease except under extreme circumstances. To make sure an MCI would be covered, tenants would have to apply to the program within 90 days of it being issued. “But,” noted Hoylman, “it must be completed for each MCI separately.”

Kavanagh, who then discussed the state of the housing law that determines MCI policy, got some chuckles out of the audience when he mentioned that, “The MCI system is part of a larger system that was intended to protect tenants.”

However, legislation authored by Kavanagh, which seeks to end MCI payments once the cost of the improvement would be recouped by owners, has been collecting dust in Albany. He noted that the housing laws are up for expiration again in 2015 and he hoped to get the bill passed then, which would also add more oversight to the application process. At this time, the HCR has a limited ability to verify “what costs for improvements really are.”

Tenants argue against the MCIs

Following statements from local elected officials, tenants then lined up to ask questions about the MCIs, the overall theme of which seemed to be: What can be done to stop them and why is CWCapital entitled to money for work that was paid for by Tishman Speyer?

Stuyvesant Town resident Liza Sabater asks a question as other tenants line up to do the same. (Photo by Sabina Mollot)

Stuyvesant Town resident Liza Sabater asks a question as other tenants line up to do the same. (Photo by Sabina Mollot)

“CW is nobody who actually spent money on the major capital extortion, I mean improvement,” griped one tenant.

In response to the latter question, Collins said that it was standard that a new owner step into the shoes of the old owner.

As for the former question, Kavanagh responded to say the answer was in restoring home rule from the state to the city, because in the state legislature, many of the politicians making decisions on city housing law live outside the city with few rent-regulated renters as constituents.

Another resident then suggested that the Tenants Association purchase shares of Walker & Dunlop, the parent company of CWCapital, so tenants could be at company board meetings. This got the attention of Garodnick, who responded, “How much are shares? I say we do it.”

When another resident asked if tenants could be socked with yet another MCI for the ongoing renovation of the storefronts on First Avenue, the answer was no, because it doesn’t benefit all tenants.

Another resident, introducing herself as Emily Juno, said she’d lived in the community for 18 months and was never notified about a pending MCI. She added that she had neighbors who’d told her the same. In response, Collins said she wouldn’t have to pay it in that case, but also cautioned her to check her lease and any riders to make sure there was no reference to an MCI.

A resident named Liza Sabater, who said she’s raising two children in Stuyvesant Town, said she had a “mundane” question, which was that she didn’t even know the amount to put on her rent check. The wording in the MCI documents made her wonder if her rent had been increased by over $1,000, but Collins said no one’s rent had gone up that high, because the monthly MCI payments are capped at six percent of whatever each tenant’s rent was in 2009.

A longtime resident, Tom Hickey, said he didn’t believe the resurfacing MCI was valid because he recalled similar work being done at the turn of the millennium. (Later, he said he filed his own objection in 2009 to the  housing agency since the last resurfacing was actually done in 2003 or 2004 by Met Life.) Didn’t this, Hickey asked, mean the 2009 project occurred before the prior resurfacing had completed its useful life? Collins said he’d check to see if that information was included in his objections.

Another resident wanted to know why there was a retroactive portion if MCIs get paid on a monthly basis, anyway, to which Collins replied that, “It doesn’t make sense to me if it’s in perpetuity, but that’s the way the law works.”

Following the meeting, Steinberg said that the TA had collected around 750 signatures on its pledge for a joint challenge of the MCIs, but said the association was still looking for more and would be putting the pledge online on the TA website (stpcvta.org).

In related news, Hoylman, Garodnick and Kavanagh wrote a joint letter to HCR Commissioner Darryl Towns, expressing their concern over the recent flood of MCIs, asking that they be reviewed.

 

Reminder: ST-PCV Tenants Association holding MCI meeting on Saturday at 1 p.m.

tenants Assoc logoThe Stuyvesant Town-Peter Cooper Village Tenants Association will hold a meeting to address five recently issued major capital improvement (MCI) rent increases on Saturday, November 2 from 1-4 p.m. at the auditorium at the Simon Baruch Middle School (MS 104) on East 20th Street between First and Second Avenues. Local elected officials are expected to attend and John Marsh, president of the Tenants Association, said there would be “ample time” for tenants to ask questions, which will be answered by the association’s attorney Tim Collins.

In October, tenants in Stuyvesant Town learned they’d gotten an MCI (major capital improvement) for video intercoms, followed by an MCI issued to residents of Peter Cooper, which was also for security upgrades, including a command center. Tenants learned about the latest round last week, via notices that the state housing agency, the Division of Housing and Community Renewal (DHCR) of New York State Homes and Community Renewal (HCR) had approved MCIs for work on three more projects: water valves, doors and resurfacing. Possibly more MCIs are on the way.

Which MCIs tenants got depended on if they live in Peter Cooper or Stuyvesant Town. As far as the Tenants Association is aware, an MCI for water tanks and valves is for PCV residents only; while only Stuyvesant Town residents have gotten MCIs for resurfacing that were combined with charges for doors and water tanks/valves.

At the meeting, Collins will explain the process of appealing an MCI order and will outline what the TA’s pushback will be. He will be joined by New York State Senator Brad Hoylman, Assembly Member Brian Kavanagh and City Council Member Dan Garodnick.

“Both longtime rent-stabilized tenants and those who recently moved in and are receiving MCIs addressed to former residents or current occupant have been swamping our message center with questions about the MCI process,” said Marsh. “We’ve put together this meeting to answer precisely those questions.”

Subjects to be covered, according to Marsh, include: What constitutes an MCI? Why are tenants getting such a flood of MCIs at once? How do the retroactive and prospective payments work? Is there any way to put an end to paying MCIs in perpetuity? Why is there a per room charge when, for example, there is outdoor resurfacing work? Why should tenants have to pay if the improvement in question is faulty or doesn’t work?

“We have long understood that an owner needs to improve their property, but it must not be at the expense of long-term affordability,” said Marsh in an official statement. “When a co-op/condo owner is assessed for an improvement, they are assessed only once, not for the rest of their tenancy. Renters on the other hand are forced to pay forever for something that is depreciable.”

An opportunity to sign a document association with the association’s petition for administrative review (PAR) can be signed at the meeting. The association is also asking tenants to share their docket numbers and Google documents are available for this purpose through links on the association’s website at stpcvta.org. Additionally, the group is soliciting donations to help pay its looming legal bills for the MCI challenges.

Peter Cooper Village residents hit with MCI

Tim Collins, counsel for ST-PCV Tenants Association

Tim Collins, counsel for ST-PCV Tenants Association

By Sabina Mollot

Just one week after residents of Stuyvesant Town were hit with a major capital increase (MCI) for video intercoms and a security command center installed in 2009, residents of Peter Cooper began receiving notices in the mail that their rents too would be increased, in this case $10-$15 per apartment. The MCI, also for security upgrades, comes with a retroactive portion tenants are responsible for paying of $480-$650.

Though as of Friday, only two buildings got the notices, Susan Steinberg, chair of the ST-PCV Tenants Association, said that the rest of the buildings in PCV were also likely to get the same news, and possibly Stuy Town, too.

In a Facebook post, the Tenants Association said that its attorney Tim Collins filed objections in May of 2012 to this MCI “and as in the case of the ST Video Intercom MCI, these objections have either ignored or overlooked.”

Currently the Stuyvesant Town video intercom MCI is being disputed by the TA via a petition for administrative review (PAR) and Collins will also do the same for the latest MCI.

The Tenants Association said it has a few general objections to the MCI, which include claims that:

• The system replaced a full electronic security management system installed in Peter Cooper Village only in 2004. Before a system is replaced, it must have exceeded its useful life.

• Critical documentation, such as government permits, and plans and specifications were not submitted, but should have been. There were different contract amounts cited. Change orders lacked proper verifiable information. Some change orders were for repair and restoration not eligible for MCI rent increases.

• The security command center was a new facility installed at 518 East 20th Street. This security center was relocated to 317 Avenue C as part of an overall rental plan for retail spaces on the property. This work did not qualify for MCI treatment, even before Sandy destroyed the command center.

Steinberg added that she is concerned because “there are other MCIs out there and I would hate to think they are all going to be approved. What would be horrible is getting thousands in retroactive fees and the rest will be there forever unless something happens with our rent regulation laws.”

As with the Stuy Town MCI, the Tenants Association is asking that residents don’t file individual PARs at this time, but instead send the association the docket numbers that appear on their MCI documents.

The Tenants Association will be preparing a Google form for affected tenants to send the docket numbers and will soon be spreading the word via an email blast and building postings.

Steinberg also noted that the cost of fighting the MCIs is going to be pricey and requested that tenants consider making a donation to help with the effort.

“This is going to be an enormous legal fee,” said Steinberg.

MCIs are rent increases owners of rent stabilized properties can charge for making improvements and upgrades and are added to tenants’ base rent. According to the Tenants Association, there are currently five pending for ST/PCV. In 2009, the Tenants Association learned that 20 percent of the MCI applications filed in this city came from ST/PCV alone.

CWCapital has not yet responded to a request for comment.

This article has been revised to include additional information about the the Tenants Association’s arguments against the MCI.