Mitchell-Lama: Independence Plaza North To Leave Program

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Another Mitchell-Lama development may be leaving the program. Here's the story, Developer to buy I.P.N.; likely to end rent protections, by Albert Amateau, from the September 25, 2002 online edition of the Downtown Express:
 
 
A new owner has an agreement to buy Independence Plaza North, the high-rise residential complex in Tribeca, and he is hoping to eventually buy out of the Mitchell-Lama program which has kept the 1,345 apartments below market rents for the past 28 years.
 
Larry Gluck, a developer active in urban renewal projects for many years, informed I.P.N. Tenants Association president Neil Fabricant on Sept. 3 that he has a contract to buy the complex from Harold Cohn, head of the family-owned Duane St. Associates, and intends to continue to operate it for the short term under the city and federal regulated Mitchell-Lama program.
 
But Gluck made it clear at a Sept. 12 meeting with tenant leaders that he intends to buy out of the government program and bring the complex to market rate. "He estimated that this process may take as long as two years but he is confident that under the law he will succeed," said Fabricant in a Sept. 13 letter to I.P.N. tenants.
 
Gluck could not be reached for comment and Cohn did not return a call.
 
Carol Abrams, spokesperson for the city Department of Housing Preservation and Development which has jurisdiction of Mitchell-Lama developments, confirmed that Gluck applied for approval of a change of ownership in an Aug. 30 letter to H.P.D. Assistant Commissioner Julie Walpert.
 
Abrams said that the application is only the first step in the buy-out process which also requires approval from the federal Department of Housing and Urban Development.
 
I.P.N. tenant leaders have been anticipating such a move for about a year. Fabricant said in his letter to tenants that the eventual buy-out does not necessarily mean that residents will be able to buy their apartments as condo owners or co-op members. "As a general statement, what happens after the buy-out might be a rent increase, a shift into rent stabilization (following litigation), a plan to convert the development into a cooperative or condominium, or some combination of these things," said Fabricant.
 
The tenant president added, however, that Gluck said he plans to upgrade the appearance, maintenance and security of I.P.N. "If only to maximize I.P.N.'s market value - he wants to make improvements 'within the limits of the Mitchell-Lama program.'"
 
Gluck also suggested that the rise to market-rate rents could begin with apartments that normally become vacant - between 5% and 10% of the apartments each year. "We haven't verified that figure, but we assume that it is roughly accurate." said Fabricant. "But he made it clear that he intends to get all the rents as close to real market value as the law will allow," Fabricant added.
 
Gluck also expressed sympathy for what he described as "poor" tenants, saying he would like to protect them but was not specific, Fabricant said. "How this might translate into limited rental increases, government vouchers, other subsidy programs, explicit legal protection, or legally enforceable promises, Mr. Gluck did not say," Fabricant related.
 
"Until now, Mitchell-Lama has been our best protection from unaffordable rent increases. Now, our best protection - in our view, the only protection - is a strong tenant association. That's what we've been doing for the past two and one half years - building a strong organization." said Fabricant.
 
"We will remain solidly united in our efforts to protect all tenants. We are well organized, and we do have a reasonable approach. We are hoping that Mr. Gluck turns out to be the person he represents himself to be, namely, a reasonable man who understands that neither side will get everything it wants, but that acting in good faith, we can find a middle ground. We will just have to see what he does, not what he says or how nicely he says it: the devil is always in the details," Fabricant concluded.
 

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Here's a followup story, Fearing the end of middle-class rents at I.P.N., by Albert Amateau, from the October 1, 2002 online edition of the Downtown Express:
 
  
Tenants of Independence Plaza North, many of whom have lived in the Tribeca high-rise for more than 20 years, say they are not sleeping as easily as they did a few weeks ago before they learned that a new owner is about to take possession of the complex and remove it from the rent protection of the Mitchell-Lama program. "It's a pretty scary development," said
 
Frank Saponara, who moved into I.P.N. at 80 N. Moore St. 25 years ago and lives there with his wife and daughter. "I just hope the man who bought it has a conscience and will consider the middle-income families who have nowhere else to go," said Saponara, who moved to I.P.N. from the West Village, where he was raised.
 
"A lot of people grew up here, " he added. "We've withstood the terror attack and I would hate for people who have their roots here to have to move."
 
Larry Gluck, a principal in Stellar Management Co., Inc., told the I.P.N. Tenants Association on Sept. 3 that he had an agreement to buy the complex with three 39-story buildings, 1,345 apartments and about 3,500 residents from the present owner, Duane St. Associates, the family enterprise headed by Harold Cohn.
 
The I.P.N. selling price was more than $100 million, according to an item in the New York Post. Gluck had told Neil Fabricant, I.P.N. Tenant Association president, on Sept. 3 that he intends to quit the government-funded Mitchell-Lama moderate income program after about two years and eventually raise rents to market rate. Gluck and Cohn have not returned phone calls for comment.
 
William Wagner, who was the broker on the deal, said this week that Gluck owns more than 6,000 rental apartments in the five boroughs - covering a range from low-and-middle-income to luxury units.
 
"He's a very decent guy who has no long-standing violations - he takes care of things right away and pays his real estate taxes promptly," said Wagner. "He was very up front with Fabricant at the meeting. There will be rent increases but there are programs out there that protect low-income tenants. He's prepared to work with the city and the tenants to come up with a solution," Wagner said. Rents for two-bedroom apartments at I.P.N. range between $900 and $1,300 per month and the complex has parking for 550 cars at about $145 per month, Wagner said.
 
Helen Cantwell, an I.P.N. resident since 1977, is still anxious about her future in the complex. "You could put your finger in the air to find out how the wind is blowing," she said, adding that the tenants association has been anticipating a Mitchell-Lama buyout move for two years. "Our tenants association told us we can't count on being protected as senior citizens, and I'm going to be 89 in two weeks."
 
Vernon Baim has a lot of questions but he is more optimistic about the future of seniors at I.P.N.where he was one of the first tenants when it opened in 1974. "I don't think they'll do anything to seniors," he told a reporter last week while walking his dog on Greenwich St. "I'm not worried.
 
I was 94 on July 15. I came here nearly 30 years ago to retire." Baim said he expects a $1,200 annual rent increase for gas and electricity. He acknowledged that the news about the ownership change shook him a little. "They kept saying 'It's going to happen, it's going to happen.'
 
And when it happened, it was still a shock. What are they going to do about people on welfare or disabled people?"
 
Alyson Gunn, 26, moved into 40 Harrison St. two years ago to live with a cousin, Elizabeth Regensburger, an I.P.N. resident for 27 years. "My cousin moved here when it wasn't even a neighborhood.
 
She's a third-generation Manhattan resident. I don't know what any of us will do; there's no place in Manhattan that's affordable. It's really unfair that working class people won't have access to a neighborhood that has become as nice as this. The people who built the neighborhood are being displaced only because of money."
 
Luz Rosado, a resident of I.P.N. at 310 Greenwich St. for 25 years, also said she feared for the future. "Where are we going to go? It's scary. I raised three kids here."
 
On top of the impending Mitchell-Lama buyout, I.P.N. residents had a frightening reminder last week of the terror of Sept. 11, 2001. Fireworks in the river at a Sept. 24 party celebrating the inauguration of New York Water Taxi caused a panic among many of the residents. "I thought the building was coming down," said Rosado. "Some people actually left the building. It wasn't funny. They should have warned us at least with a notice in the lobby."
 

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Here's another followup story, Gerson looks for new rent protections Downtown, by Albert Amateau, from the October 9, 2002 online edition of the Downtown Express:  
 
 
City Councilmember Alan Gerson is talking to state and city officials about strategies to save affordable housing imperilled by the impending buy-out from the Mitchell-Lama program by the new owner of the Independence Plaza North complex in Tribeca.
 
"We have to assure that all tenants can continue to live at I.P.N. - and we want to maintain those 1,300 units as permanent affordable housing," Gerson said last week.

Tenants of the 39-story, three-building complex are facing the prospect of a new owner, Larry Gluck, who intends to bring I.P.N. to market rate in about two years. The I.P.N. Tenants Association is scheduled to meet at 7 p.m. Wed. Oct. 16 in the Borough of Manhattan Community College auditorium at 199 Chambers St., to talk about the options. Putting the complex into the city Rent Stabilization program and forming a limited equity co-op, are two possibilities that the I.P.N. Tenants Association is exploring.
 
Gerson said he has been talking to city Housing Preservation and Development officials and the Lower Manhattan Development Corp. about affordable Downtown residential developments that are about to lose rent protection.
 
"The administration is definitely interested in keeping affordable housing Downtown," he said.
 
Michael Kadish, Gerson's policy director, said the office is also concerned about other Downtown housing. Some units in Gateway Plaza, for instance, are subject to rent protection clauses which all expire in 2005, but could be renewed, Kadish noted. Knickerbocker Village, at 10 Monroe St., with 1,600 apartments, is another Mitchell-Lama rental complex that could lose its protected status soon.
 
The building at 235 Cherry St., with 500 apartments and a Little Italy development with 278 apartments at 21 Spring St. benefit from federal Section 8 subsidies that could lapse soon. The 250 Clinton St. structure is a Mitchell-Lama rental building that will also be eligible for a buy-out from the program. The Cooper Sq. apartments at 10 Stanton St., with 146 units, are also under a rent protection program that could end in the foreseeable future.
 
"The councilmember wants to make sure none of those residents loses their apartments," said Kadish. "Alan is asking L.M.D.C. and the city to put resources into affordable housing and he's gotten a good reception."
 

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Here's another followup story, I.P.N. leaders say buyout fight may cost $350,000, by Albert Amateau, from the October 23, 2002 online edition of the Downtown Express:
  
 
More than 500 Independence Plaza North tenants met last week to develop defense strategies in the face of the impending landlord buyout from the government-sponsored Mitchell-Lama program.
 
Neil Fabricant, president of the I.P.N. Tenants Association, called on residents of the three-building complex to raise a war-chest of at least $350,000 and to register to vote in order to hold elected officials accountable.
 
"We will tell candidates we have one agenda and one agenda only, keeping our homes," said Fabricant at the Wed. Oct. 16 meeting at Borough of Manhattan Community College.
 
The long-expected move to take I.P.N. out of the Mitchell-Lama affordable housing program came last month when Larry Gluck, principal of Stellar Management Co., Inc., told the tenants association that he had a option to buy I.P.N. from Duane St. Associates, the family-owned business headed by Harold Cohn.
 
Gluck said he expected to take the complex with 1,345 apartments out of the Mitchell-Lama program in about two years after which he intends to raise rents to market rates. Currently, tenants in two-bedroom apartments, for example, pay about $1,000 a month.
 
Fabricant told I.P.N. tenants last Wednesday that they needed a war chest to hire lawyers to negotiate with Gluck - and if necessary - to litigate. "This is not about litigation," he said, "but we will be ready to go to court if we have to," he said.
 
Estimating that the tenants association could spend $150,000 on lawyers and consultants this year alone, Fabricant suggested that each tenant should consider contributing $500 to the war chest this year. Although a few tenants complained about the amount, most of the people in the audience who spoke said it was reasonable.
 
The association has been consulting with Judy Engel of Engel Partnership on a financial analysis of I.P.N. since the beginning of the year, and is interviewing "dozens of law firms," Fabricant said. "We will present those firms to you when we've narrowed them down," he said.
 
Although the tenants association, which currently has 800 members, has not yet decided on what to ask of Gluck, Fabricant said one option would be a sale to tenants who would form a limited equity, non-eviction co-op. He acknowledged, however, that under current regulations, Gluck is not obliged to accept an offer by residents.
 
Nevertheless, the city Department of Housing Preservation and Development, which administers the state and city Mitchell-Lama program, and the U.S. Dept. of Housing and Urban Development must sign-off on the ownership transfer and the buyout. Fabricant said the association will demand that elected officials do whatever is necessary to ensure that tenants have a say in what happens.
 
A group of dissident tenants called I.P.N. Senior Citizens Buyout Committee distributed a handbill at the meeting demanding that the tenants association appoint a seniors vice president of the association board of directors, but Fabricant, who is 64, rejected the demand, saying the association bylaws allow anyone to run for the board.
 
Edward Cochanski, president of the committee, said later that Gluck had met in person with committee members in the I.P.N. management office a few hours before the Oct. 16 meeting. "He assured us there would be no throwing out senior citizens because of inability to pay," Cochanski said.
 
"He told us that no seniors at I.P.N. has anything to fear from the buyout. He said the federal HUD voucher program that protects middle-income tenants, including seniors, will remain in effect. He intends to make his money by raising rents to market rate on apartments that become vacant, of which a goodly number are expected each year. He did point out that many people living here at I.P.N. are in the higher income bracket and it is they who will suffer rent increases and have to pay market rate."
 
Under Mitchell-Lama law, higher income tenants pay a surcharge on their rents.
 
Cochanski said that Gluck was asked to put those assurances in writing. "Mr. Gluck promised to give it to us in writing when the time comes, which will be after his lawyers and the tenant association lawyers come together. By this we take it to mean come to an agreement."
 
Much of what Gluck told the seniors committee was a repeat of what he told the tenants association directors on Sept. 12. Fabricant has noted that government voucher rental assistance must be renewed periodically. The renewals are anything but certain as government budget deficits loom, he added.
 
Some tenants of Park West Village, a Mitchell-Lama project on the Upper West Side that the landlord removed from the program recently, have complained that many of them were harassed during the process. Gluck told the dissident I.P.N. seniors last week that he owned only 27 percent of Park West Village and had no input on management decisions there, Cochanski said.
 

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The November 15, 2002 online edition of the New York Daily News has a story about Independence Plaza's possible buyout from the Mitchell-Lama program:
 
 
Tenants fight complex buy
 
By ERIC HERMAN
DAILY NEWS BUSINESS WRITER
 
The Independence Plaza tenants' group is fighting to keep real estate investor Larry Gluck for buying the complex. Real estate investor Larry Gluck wants to buy one of lower Manhattan's biggest apartment complexes, and some of the tenants aren't happy.
 
Some of those who live in Independence Plaza fear Gluck's plan will end their subsidized rents that are a fraction of market levels. A sale also could alter the buildings' character - changing it from a diverse place into a yuppie enclave, they said.
 
"We're very angry," said Neil Fabricant, president of the tenants' association. "We're well-organized now, and we're going to be better organized."
 
The fight brewing between Gluck and the tenants illustrates what can happen when apartments in the state's Mitchell-Lama program change status.
 
Mitchell-Lama provided tax breaks and low-interest mortgages to developers who built apartments that went for below-market rents. The law gives owners the right to leave the program after 20 years if they pay off the mortgage.
 
The city's department of Housing Preservation and Development must approve the sale. But short of filing a lawsuit, the tenants don't have the power to stop it. Fabricant wants to lead a buyout by the tenants and turn the building into a co-op.
 
Gluck did not return calls for comment, but a broker who represented him said the higher rents would enable Gluck to improve the property.
 
"As much as they protest, the tenants are going to be very happy," said the broker, William Wagner. "Right now, the place is a pig sty."
 
Independence Plaza includes three 40-story towers on Greenwich Street, between N. Moore and Duane streets. It was built in the 1970s. Many current residents have lived there almost from the beginning.
 
"When we moved down here you couldn't rent these places," said Kathryn Freed, an ex-city council member who lives there.
 
Gluck has a contract to buy Independence Plaza from the Cohn family for an undisclosed price. The property has a $50 million mortgage, according to HPD.
 
Under Mitchell-Lama, rent is determined according to a formula. A one-bedroom in Independence Plaza could rent for as little as $700 a month - roughly a third of a market-rate one-bedroom in the area.
 
Wagner said "economically challenged" residents at Independence Plaza would still be protected, since they could enter federal housing programs.
 

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The New York Times has finally recognized that the new owners of Independence Plaza North will buy out of the Mitchell-Lama program.
 
On December 6, 2002, the Times ran an article, Tenants of TriBeCa Complex Fear Their Rent Will Skyrocket, by Cecilia M. Vega:
 
 
Tenants of Independence Plaza North in TriBeCa, long considered one of the best housing deals in Lower Manhattan, say they fear that the expected sale of the apartment complex next spring will result in rents that force them from the neighborhood.
 
The soon-to-be landlord of their complex — three sleek 40-story apartment towers — plans to withdraw the buildings from subsidized housing under the Mitchell-Lama program.
 
Residents fear that rents could as much as triple, though Laurence Gluck, the property investor who plans to buy the complex, said it was too early to tell what the rent increases might be.
 
Residents, mostly elderly and of moderate income, say they did not have to move after the World Trade Center attack just blocks away, and should not have to do so just because the property will change hands.
 
"How much more do we have to take?" asked Diane Lapson, who moved to the complex at Greenwich and Duane Streets in 1975 and was one of its original tenants.
 
"People didn't want to come visit me. There was nothing here," Ms. Lapson recalled. "We built TriBeCa before it even was TriBeCa."
 
Ms. Lapson and about 50 other tenants of the 1,330-unit complex marched several blocks from their front lobby to City Hall yesterday, using their protest posters as snow shields. They joined more than 200 other people at a rally that called on Mayor Michael R. Bloomberg to create a 10-year plan for lower-cost housing in New York City.
 
William Wagner, a real estate agent who brokered the sale of the complex to Mr. Gluck, said it was likely to go through next spring. He would not say what Mr. Gluck had bid.
 
Mr. Gluck said yesterday afternoon that he had not heard about the protest march. But he said he had met with tenants recently and had listened to their concerns, and hoped that his purchase of the building would involve "as little disruption as possible."
 
In addition to renovating the building, he said, he plans to remove the property from the Mitchell-Lama program. That program gives developers tax incentives for keeping rents low and allows them to withdraw after 20 years by paying full taxes and paying off the long-term bonds used to finance construction.
 
"People are very emotional about their homes, and I respect that," Mr. Gluck said. "I have thousands of apartments that I manage, and this is business, but there's a human side to it that someone in my position has to be mindful of or you can't be successful."
 
Mr. Gluck said he did not know yet whether he would raise the rents to market rate, a common practice after a property is removed from the Mitchell-Lama program.
 
About 70 percent of the Independence Plaza North tenants qualify as rent burdened, or eligible for rental assistance programs to support them in paying any increased rent, he said. As for the remaining tenants, he said, "I do not have a plan for future rents for people who are not rent burdened."
 
Mr. Wagner said that if rents were raised to market rate at Independence Plaza North, a 1,000-square-foot, two-bedroom apartment could cost as much as $3,000 a month. Currently, the base rent for a two-bedroom unit is $924 a month, he said.
 
Gertrude Stein, 79, who has lived in the complex for 10 years with her husband, Philip, a painter, said, "We will be at the very mercy of the new landlord.
 
"Because of our age, everything's within walking distance," she said. "If I move to New Jersey, I'll have to get a car, and who knows how long that will last?"
 
The couple live on their Social Security payments and Mrs. Stein's pension. Even with rental assistance programs, they said, paying increased rent will be nearly impossible.
 
"We don't know what we will do," said Mr. Stein, 83, who attended yesterday's rally with his wife. "We have no place to go."
 

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Yet another followup story, I.P.N. tenants join housing protest on snowy day, by Elizabeth O'Brien, appeared in the December 11, 2002 edition of the Downtown Express:
 
 
More than 50 tenants of Independence Plaza North braved bitter winds and heavy snow last Thursday to protest the impending threat to their government rent program as they took part in a larger housing rally at City Hall.
 
This fall, the long-standing concern that I.P.N. would be taken out of the Mitchell-Lama affordable housing program moved closer to reality when a potential buyer told the tenants association that he would return some of the complex to market rates in approximately two years. Larry Gluck, a property investor with Stellar Management Co., Inc. who has an agreement to buy the complex, said it was too early to predict what the rent increases might be.
 
Tenant leaders said they started organizing against the sale of their complex years ago, and now their struggle has taken on increased urgency.
 
"It's not a dress rehearsal, this is the real thing," said Diane Lapson, 52, a vice president of the I.P.N. Tenants Association. "We will not rest until we get what we need."
 
Residents of the three-building complex in Tribeca joined several hundred protestors at a frigid lunchtime rally outside City Hall to demand that Mayor Bloomberg address New York City's housing crisis. Many I.P.N. tenants said that they do not know where they would go if rent increases force them out of their apartments.
 
"I'm living on social security," said Bobby Keith, 67, a 13-year resident of I.P.N. "I don't know what I'd do."
 
It remains unclear when the sale of the complex will be completed. By statute, the city Department of Housing Preservation and Development must approve all changes in ownership of the Mitchell-Lama complex, said H.P.D. spokesperson Carol Abrams. The agency is currently reviewing a purchase proposal for I.P.N., Abrams said, but she declined to comment on the specifics of the review or when it will be completed. H.P.D. must also sign-off on a buyout from the Mitchell-Lama program.
 
I.P.N. marchers said they're not waiting for any deals to be finalized. They have already raised some $143,000 to pay the fees for their attorney and financial analyst, with more pledges on the way, said Neil Fabricant, president of the I.P.N. Tenants Association.
 
Tenants said that they hoped to take ownership of the complex.
 
"It would be ideal for us to get the financing to buy it ourselves and to keep it limited income," Fabricant said.
 
Tenants said that they would not be interested in making a profit off the building, but merely wanted to ensure that they could remain in a neighborhood that many helped to pioneer after the complex was built in the early 1970s.
 
"It takes a couple of generations to build a neighborhood," said James Gilroy, 54, an artist who has lived in I.P.N. since 1975.
 
"To have a realtor to come in and disassemble that is just ing."
 
In a September meeting with tenants, Gluck sought to reassure tenants that most would be protected from any rent increases if he takes ownership of the complex.
 
"We've sent in experts who deal in affordable housing and they've gone through all the financial files of the tenants as they're required to submit them as Mitchell-Lama tenants," Gluck said last week in a telephone interview. "They've determined that 70 percent qualify for rent subsidies."
 
Under a federal voucher program, I.P.N residents would be eligible for rent subsidies if they make up to 95 percent of the area median income as defined by the federal Department of Housing and Urban Development. According to HUD officials, the maximum incomes allowable under the federal Section 236 voucher program are as follows: $35,150 for one person; $40,200 for a family of two; $45,200 for a family of three; and $50,250 for a family of four. For more information, visit www.huduser.org and click on "FY 2002 Income Limits."
 
Some I.P.N. tenants said that they wanted Gluck to put his plans for the complex in writing. Gluck said it was too early to take that step, but that his attorneys would address the issue at the appropriate time.
 
"We talk through the lawyers," Gluck said.  
 
"That I believe is the professional way to do it. I would tell them [tenants] that if they were members of my own family."
 
Currently, tenants in two-bedroom apartments at I.P.N. pay approximately $1,000 a month. If rents were raised to market rate, the same apartments could cost as much as $3,000.
 
Many tenants worry that they won't be able to afford the new rents, even with government assistance. Harriet Grimm, 45, has lived in I.P.N. since 1995. Her 5-year-old daughter attends P.S. 234, and Grimm said she would hate to have to move her family out of the I.P.N. complex and its rich, diverse community.
 
Said Grimm, "A group of decent, hard working people will be lost Downtown."
 

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Here's another follow-up story about the proposed buyout of Independence Plaza North from the Mitchell-Lama program, from the February 12, 2003 online edition of the Downtown Express:
 
City says most I.P.N. tenants will stay
 
by Albert Amateau
 
Skeptical leaders of the complex are not convinced
 
A city housing official last week told skeptical leaders of the Independence Plaza Tenants Association that an estimated two-thirds of I.P.N. tenants would be eligible for rent subsidies if and when the proposed new owner takes the complex out of the Mitchell-Lama program.
 
However, Gary Sloman, the Housing Preservation and Development official, could not satisfy I.P.N. tenants demand for proof of the estimate and he tried to fend off aggressive questions about the future of federal rent subsidy vouchers, during the Thursday, February 6 Community Board 1 Tribeca Committee meeting.
 
What about the one-third of the tenants who would not be eligible for those vouchers, several I.P.N. tenants asked.
 
"We will attempt to work with the owner, elected officials and tenants to reach an accommodation for those tenants," replied Sloman, adding that negotiations with owners who bought out of other Mitchell-Lama programs have resulted in agreements that allowed existing tenants to remain at rents below market rate.
 
"There have been no mass evictions," he added. He acknowledged, however, that there is no legal rent protection guarantee for I.P.N. residents who are not eligible for vouchers.
 
That acknowledgement raised the ire of John Scott, an I.P.N. tenant leader. "It stinks," said Scott.
 
I.P.N. tenants are trying to prevent the current owner, Harold Cohn, from selling the 1,345-unit complex in Tribeca to Larry Gluck, of Stellar Management, who has told tenants he expects to manage the complex as a Mitchell-Lama for about a year and then buy out of the program. Tenant leaders want to buy the complex and organize a limited equity co-op to protect their affordable rents.
 
Mitchell-Lama projects completed and occupied before 1974 are subject to city Rent Stabilization when they leave the program, but those like I.P.N. that were completed after that date do not have that protection.      
 
I.P.N. tenants will hold a pulbic meeting at 7 p.m., Thursday, Februray 13, at the Borough of Manhattan Community College auditorium.
 
H.P.D., which oversees Mitchell-Lama projects like I.P.N., must approve changes in management and ownership, Sloman said. The department also oversees buyouts from the program, a process entirely separate from ownership changes. While the agency has supervised many buyouts and changes in managing agents, it has rarely dealt with changes in ownership.
 
"I don't know of any example, and I've been with H.P.D. for four years," said Sloman. "It's a rare occurrence for one owner to sell [a Mitchell Lama project] to another. It's not something we do every year or even every decade."
 
The agency must check on the background of new owners, but unless the city Department of Investigation finds "something very seriously wrong," it is unlikely to reject new ownership, Sloman said. "We have more legal authority over a managing agent than we do over an owner," he observed. The form for a background check is long and detailed, but is not subject to a Freedom of Information Law, Sloman added.
 
To buy out of Mitchell-Lama, owners must pay all back taxes and loans due to the city or other government agency that financed the project.
 
Under new rules for city-supervised Mitchell-Lama projects that went into effect on February 1, owners who want to buy out must give one year's notice to H.P.D. and to tenants. "The notice must go to each and every tenant," said Sloman. No less than 60 days before the buyout is complete, the owner must conduct a public information meeting on the buyout.
 
In response to an increasing number of buyouts of projects like Mitchell-Lama across the nation, the federal Department of Housing and Urban Development has liberalized its Section 8 rent voucher system with "enhanced vouchers," said Sloman. Families that earn up to 95 percent of median income qualify for the enhanced vouchers that pay rent that is more than 30 percent of the family income. Sloman estimated that two thirds of the 3,500 tenants at I.P.N. would qualify for the voucher.
 
According to HUD officials, the maximum incomes allowable under the federal section 236 voucher program are $35,150 for one person and $50,250 for a family of four.
 
Sloman, however, said that landlords are not required to accept the vouchers, but he observed that they would derive no benefit from refusing a subsidized tenant.
 
Gluck has also said that most I.P.N. tenants would be eligible for rent subsidies after his intended buyout. Nevertheless, tenant association leaders insist that federal subsidies could disappear, especially during budget crises.
 

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The story below, by Albert Amateau, appeared in the May 13, 2003 online edition of The Downtown Express:
 
City approves I.P.N. sale
 
New York City last week approved the sale of Independence Plaza North, setting the stage for the end of middle-class rent protections for many of the 3,000 residents of the Tribeca complex.
 
The May 5 action by the city's Dept. of Housing Preservation and Development action disappointed the I.P.N. Tenants Association and paves the way for the transfer of the complex from Harold Cohn, head of Duane St. Associates, to Larry Gluck, head of Stellar Management, for a price undisclosed but estimated at over $100 million, by some real estate sources.
 
Gluck told tenants last year that he intends to operate the 1,345-apartment complex for one year under the Mitchell-Lama subsidy program which keeps rents in the middle income range and then move to leave the program and eventually raise rents to market rate.
 
Tenants' rents start at about $600 for studios, $800 for one-bedrooms, and $1,000 for two-bedrooms. Some residents pay monthly surcharges on their rents depending on their income.
 
Steve Vitoff, a spokesperson for Gluck, said the developer was pleased and not surprised by the city's approval of the sale, which still needs one more level of approval by the federal Department of Housing and Urban Development.
 
Vitoff added that Gluck is committed to "cooperating 100 percent with tenants to minimize the financial impact of the transition." He estimated that two thirds of I.P.N. tenants would be eligible for federal enhanced rent vouchers, commonly known as "sticky vouchers."
 
Nevertheless, Neil Fabricant, president of the I.P.N. Tenants Association, said he was outraged at the H.P.D. action two weeks before a scheduled May 23rd meeting between tenants and Daniel Doctoroff, deputy mayor for economic development, regarding the impending I.P.N. Mitchell-Lama buyout.
 
"Is anyone in the administration listening to ordinary people?" asked Fabricant, recalling that the tenants association had urged H.P.D. to reject the proposed sale. The tenants association wants to acquire the complex and organized a limited equity co-op that would guarantee affordable housing for all current tenants.
 
Tenant association leaders say the sticky vouchers are not a reliable guarantee of affordable housing because funding for the program depends on annual federal budgets and may be discontinued especially during bad economic times.
 
"There is a serious effort in Congress to lump sticky voucher funds into block grants to be given to the states for their general funds," said Fabricant. He said this would effectively end the voucher program.
 
"I haven't given up hope," he said in regard to the tenants' desire to acquire the complex. "We'll know more after our meeting with Dan Doctoroff on May 23," he said.
 
Fabricant said he was outraged that H.P.D. approved the sale, "despite the evidence that we submitted about years of mismanagement and corruption." Cohn did not return several phone calls seeking comment on the matter.
 
H.P.D. said last week that the sale approval was not the same as approval of the Mitchell Lama buy-out. The buy-out cannot take place until a year after an owner files a notice of intent with H.P.D. to leave the program, and in the case of I.P.N., the notice may be filed only after the sale is final.
 
"H.P.D. was legally obligated to approve the transfer of ownership after a thorough review by the department's inspector general," said Barbara Flynn, H.P.D. chief of staff. "The review investigated any criminal charges that may have been filed against Mr. Gluck and whether or not he had a history of tenant harassment in any other properties he owns. H.P.D. did not uncover any negative findings and therefore approved the transfer," she said
 
Vitoff said that Gluck had engaged an independent consultant to look at the income levels of I.P.N. tenants applying for rent subsidies and found that 68 percent of those who applied would be eligible for the sticky vouchers. "That doesn't mean that 32 percent will not be eligible," said Vitoff, noting that some I.P.N. apartments are vacant and some are occupied by I.P.N. employees. Moreover, some residents do not apply for subsidies because they know they are not eligible.
 
"We estimate that 22 percent, or about 287 households out of 1,345 will not be eligible for rental assistance," said Vitoff. "Stellar Management is prepared to make appropriate negotiations to minimize the financial impact of the transition," he said.  "They will be 100 percent available to help anyone with the paperwork who wants to apply for subsidies," he added.
 
The H.P.D. spokesperson also said the department would work with the new owners and tenants to negotiate reasonable rent increases after the complex leaves the Mitchell-Lama program.
 
Fabricant, however, said that at the Phipps Plaza complex on Second Ave. north of 23rd St., rents negotiated by the owner and H.P.D. for unsubsidized tenants doubled and tripled after the Mitchell-Lama buyout.
 

[consigliere]

The article below, by Albert Amateau, appeared in the July 15, 2003 online edition of the Downtown Express:
 
I.P.N. tenants get notice of sale
 
The new owner of Independence Plaza North has closed the deal on the purchase of the 1,340-unit Tribeca complex and has begun the year-long process of taking I.P.N. out of the Mitchell-Lama affordable housing program.
 
Stellar Management, agent for the new owner, and Duane St. Associates, the previous owner, notified I.P.N. tenants about the long-anticipated ownership change in letters dated June 26.
 
At the same time, Washington Plaza Towers, Inc. a Stellar affiliate, gave legal notice to tenants that it intends to "dissolve" the I.P.N. connection with the Mitchell-Lama program "on or about June 28, 2004."
 
That means the new ownership, led by Larry Gluck, will be able to raise all I.P.N. rents to market rate at the end of June next year.
 
But the notice also says that eligible tenants may benefit from Section 8 enhanced vouchers which would let them remain in I.P.N. for their current rent or 30 percent of their income, whichever is greater.
 
However, the I.P.N. Tenants Association, which has proposed converting the complex into a limited equity co-op, has said the so-called "sticky" vouchers could lose federal funding and are no guarantee of affordable housing. The association has also said that many tenants would not be eligible for the vouchers.
 
"There are several next steps in this process," Neil Fabricant, I.P.N. Tenants Association president, said last week. He noted that City Council Speaker Gifford Miller promised to introduce legislation "to level the playing field between landlord and tenants" at a June 25 rally at Borough of Manhattan Community College of about 700 people from Mitchell-Lama developments throughout the city.
 
Fabricant said he wasn't sure what the legislation would be, but he expected a draft to be ready for introduction soon. A spokesperson for the Council speaker said the legislation would not be introduced before August.
 
"We also have the promise of [Deputy Mayor] Dan Doctoroff that the city would participate in negotiations to assure that tenants get a fair deal," Fabricant said. "But so far, the only way to negotiate has been at the point of a lawsuit," he added, noting that tenants of former Mitchell-Lama buildings have not fared well in recent years in dealing with owners.
 
The I.P.N. Tenants Association earlier this year hired Alan Epstein of the Manatt, Phelps and Phillips law firm to represent tenants and advise on legislative possibilities.
 
The Mitchell-Lama program, supervised by the city Department of Housing Preservation and Development with oversight from the U.S. Dept. of Housing and Urban Development, allows developers to buy out of the program after 20 years or more by prepaying outstanding mortgages and back taxes.
 
The Stellar letter to tenants said, "It is our intention to engage in a dialogue with tenants and with H.P.D. officials to make sure the process proceeds as smoothly as possible for all parties involved."
 
The letter, signed by Gluck, went on to say, "I'd like to emphasize that we understand how important the transition is to you. I want to assure you that we will work hard to minimize the transition's impact on the lives of I.P.N. residents. We will also cooperate with H.U.D. and H.P.D. representatives to identify any government subsidies that might be available to residents who meet applicable eligibility guidelines."
 

[consigliere]

The article below, by Albert Amateau, appeared in the October 21, 2003 online edition of the Downtown Express:

I.P.N. owner says he is kinder and gentler

Laurence Gluck, the new owner of Independence Plaza North, faced a crowd of anxious tenants last week and presented a mild manner but not much new information about their future in Tribeca after he takes the 1,340-unit complex out of the Mitchell-Lama program.

“I was advised not to come here because I don’t have a package plan to present to you tonight,” he said at the Oct. 16 meeting. “But there is so much fear and uncertainty that I came even though I know I’m going to get barbecued.”

The new owner, the principal in Stellar Management, received a grilling from many of the 300 tenants at the meeting who were anxious about the increase to market rate – at least double their present rent – that many of them will have to pay when I.P.N. leaves the state-and federally-sponsored Mitchell-Lama program next year.

Most of the tenants pay between $900 to $1400 a month in rent, although some pay more based on income.

While Gluck promised to negotiate rent increases and phase them in gradually, he turned down tenants’ pleas to sell I.P.N. to tenants to allow its conversion into a limited-equity co-op. He refused also to continue operating the complex as a Mitchell-Lama project.

But the developer declared he would “not throw tenants into the cold water of fair market rate in a brutal fashion – like they want to do at West Village Houses and at 20 Henry St. [in Brooklyn],” referring to two developments where owners have begun the process of leaving the Mitchell-Lama program.

Gluck repeated previous estimates that two-thirds of the tenants would be eligible for federal enhanced vouchers – commonly known as “sticky” vouchers – that subsidize middle and low-income tenants by paying the landlord the difference between market-rate and the subsidized rents.

And for those whose incomes are too high to be eligible for the vouchers, Gluck said he would negotiate with tenants and with whatever government agency that administers the voucher program to determine the amount of the increase and how long the increases would be phased-in.

But in response to questions pressed by Neil Fabricant, I.P.N. Tenants Association president, Gluck said he could not guaranteed that two-thirds, or even one half of I.P.N. tenants would be eligible for the vouchers.

“It’s an unfair question,” Gluck said. The number of tenants who would be eligible, he said, would be determined by the government agency that administers the program, the city Department of Housing Preservation and Development.

Moreover, market rate itself will be also be determined by the housing agency after submissions by Stellar Management and tenants, Gluck added.

“You told us you’d have a number by September. What’s the number?” Fabricant demanded.

Gluck replied that Stellar is currently engaged in an appraisal and will submit a market-rate estimate to H.P.D. in about two weeks. “The more money I can get from government [for vouchers], the more generous I can be with the other one-third of the tenants,” he said.

“After H.P.D. is done, I will discuss what the increase will be. I’ll tell you what it should be and you’ll tell me what you think it should be,” Gluck said. However, he was not able to say when the process would begin. He promised, however, that he would keep I.P.N. in the enhanced voucher program as long as it was available.

Gluck said he came from humble beginnings and gave I.P.N. tenants a brief personal history. “I was born in the South Bronx and went to CUNY, graduated from Queens College and St. John’s Law School,” he said.

At another point, Gluck said: “I’m a businessman and I don’t have to apologize for it. I work hard and I’ve done well for myself but I don’t have to make every single dollar out of every deal. That’s not my business plan. There are competing equities here and this is not our last meeting.”

Before Gluck and four associates appeared at the meeting, Fabricant reported that the developer had refused to meet with assembled tenants until they threatened to hold a protest demonstration in front of his Manhattan apartment. And after Gluck left, Fabricant asked how many tenants felt they earned anything new; few raised their hands.

Fabricant urged tenants to turn out in force on Oct. 29 when the City Council considers legislation that would make it more difficult for owners to leave the Mitchell-Lama program. He acknowledged, however, that tenants could not force Gluck to sell them the property.

Gluck and the Real Estate Board of New York last summer said that the proposed legislation, sponsored by Council Speaker Gifford Miller, Councilmembers Alan Gerson, Christine Quinn and 30 other Councilmembers, was illegal and would not survive a court challenge.

At the meeting Hy Wolfe, an I.P.N. resident for more than 20 years, challenged Gluck to explain why state housing officials cited owners for tenant harassment a Park West Village, a large apartment complex on the Upper West Side where Gluck is a partner.

Gluck said he was a minor investor in the project with Joseph Chetrit and did not have any management control of the buildings. “They had a management company named Stellar PWV Management and we made them change the name,” Gluck said.

Elisa Kraus disputed Gluck’s assertion that he has not issued any eviction notices to I.P.N. tenants since he acquired the development from Harold Cohn earlier this year. Kraus noted that 28 eviction notes were processed recently with no notice to tenants. Gluck said those notices were initiated by the Cohn management. H acknowledged, however, that the notices were processed “insensitively,” and apologized, although he did not say he would rescind them.

The association was also concerned because the voucher program includes requirements that single tenants in two-bedroom apartments may be required to move to smaller apartments. Gluck could not guarantee that all tenants required to move out of an “oversized” apartment would be able to find a suitable smaller apartment in the complex.

“I’m one of the 400 who will not be protected by sticky vouchers and I have two children in local school,” said one worried I.P.N. tenant. “Do I have any hope in finishing out the school year? I need to know if I can afford to live here before I register my children for school next year,” she went on.

“We don’t have a specific plan right now for non-voucher tenants,” said Gluck. “But we’re not going to take all 400 to market rent right away. We’re going to implement the increases in negotiations with tenants and the appropriate government office. We can balance competing interests, so please don’t leave,” he said.

.

[TenantNet]

Consig, thanks for posting these stories -- this is good research. Now all you need to do to get a more complete picture, is go downtown, FOIL all the documents from DOB, HPD, DOF, etc., scan them in and convert to PDF. (Acris will get you somewhat there), On occasion I've done that (see http://hellskitchen.net/develop/nytimes/index.html.)

<small>[ October 25, 2003, 01:35 PM: Message edited by: TenantNet ]</small>