IPN Tenants Cheer Rent Agreement

by Ronald Drenger

"A weight has been lifted."

Stacy DiLieto's words, spoken on the evening of March 8, were repeated again and again last month by residents of Tribeca's Independence Plaza North following the announcement of a deal between their tenant association and their landlord, Laurence Gluck.

		In short, they could afford to keep their homes. The agreement paves the way for Gluck to take the 1,330-unit complex out of the Mitchell-Lama government housing program at the end of June. The tenant association, which had threatened to sue to block the buyout if it couldn't come to terms with the landlord, agreed not to oppose or delay the move. "The deal is a victory for tenants as well as ownership," Gluck said during a telephone interview. "It avoids expensive, time-consuming and generally fruitless litigation for both parties." The settlement capped three months of tense negotiations involving Gluck, Neil Fabricant, the tenant association's president, Lynn Walsh, its treasurer, and teams of lawyers and political consultants for both sides. During the first two months of talks, which began in December, the parties met about once a week at the offices of City Council Speaker Gifford Miller. Miller's chief of staff sat at the head of the conference table, with Fabricant, tenant association treasurer Lynn Walsh, and their team of attorneys and political consultants on one side, and Gluck and his lawyers and lobbyists on the other. They made relatively steady progress on some issues, such as building improvements, utility charges, and tenants' succession and sublet rights.

The toughest issue, both sides later agreed, were the rent increases for tenants whose incomes are too high to qualify for "sticky vouchers," a federal subsidy program that caps rents at 30 percent of tenants' incomes or their currrent Mitchell-Lama rents, whichever is higher. The government pays the difference between those rents and market rates. (About two-thirds of IPN tenants will qualify for vouchers, according to Gluck.) Gluck initially did not want to negotiate those increases until he knew how much the government would pay him for voucher tenants. "We didn't accept that principle, but we agreed to go forward with the talks," Fabricant said. "But we kept pressing that issue." Gluck eventually agreed to hammer out the rent increases, which he said would not exceed those negotiated by the owner and tenants at Waterside Plaza

on Manhattan's east side. Waterside had left Mitchell-Lama in 2001, after a two-year legal battle, with tenants receiving annual rent increases of nine percent for the first two years, and 7.5 percent after that.

IPN's tenant association wanted smaller increases, matching the percentages set annually by the city's Rent Guidelines Board for rent-stabilized apartments.

"Once we had that range, we began to negotiate the numbers," Fabricant said. But the negotiations were arduous, as the two sides debated a range of timetables for the rent hikes as well as for increases in parking fees. There was also haggling over other issues-for example, the minimum number of tenants that would have to apply for sticky vouchers to effectuate the deal, and deadlines for sticky voucher tenants to sign new leases. Gluck wanted to ensure that he would be able to complete the buyout as smoothly and quickly as possible, while the tenants didn't want the deal to hinge on requirements that might be tough to meet. In mid-February, Fabricant was sounding less than optimistic. Saying that the negotiations would end soon, with or without an agreement, he scheduled a tenant meeting for March 3. "We had to set a deadline because we understood that we couldn't let the clock run out," he said. "We weren't close enough to resolving the issues, and I was prepared to go before the tenants and say, 'There is no deal.'" Persuaded by others on the tenants' team that an agreement was within reach, Fabricant postponed the meeting. The two sides were conferring on the phone several times a day. The flurry of discussions bore fruit, as the tenant association and Gluck reached the tentative deal that Fabricant announced, to a standing ovation, at the March 8 tenants meeting in the P.S./I.S. auditorium.

But the deal wasn't done.

"A lot of terms had been broadly agreed on, but when we got down to the details, we found the agreements weren't quite what we thought they would be," Fabricant said. Over the next few days, "there were many more conference calls, many more negotiations."

On March 12, Fabricant got a call to come to the midtown offices of Gluck's lawyers. The agreement was ready. But even after he arrived, it took several more hours of discussions before the deal could be signed.

"Both sides compromised, both sides went the extra mile," Gluck said. "It really shows what people of good will can accomplish when they're trying to reach the same goal."

The complete agreement is posted at ipnta.org. Among its provisions:

• For the first nine years rent increases for non-voucher tenants will match the schedule for rent-stabilized apartments. (Currently 4.5 percent for one-year leases and 7.5 percent for two-year leases.)
• In the 10th, 11th and 12th years of the agreement, rents will increase by the rent-stabilization rates plus 3.3 percent. After that, increases will be capped at the rent stabilization amounts plus one percent.
• "Overhoused" voucher tenants-living in apartments bigger than they need, according to government rules-will be allowed to continue living in their apartments and paying their voucher rents after the usual one-year grace period, until an appropriate apartment is available.
• Gluck will also offer larger apartments to voucher tenants who are living in units that are too small for their family size.
• Gluck will pay up to $150,000 of the tenant association's legal and political consulting fees, with a $75,000 cap for each.
• Tenants who move in after the buyout will pay market rate rents.Both Fabricant and Gluck credited Speaker Miller for bringing the two sides to the table and keeping the negotiations moving.

Miller, Alan Gerson, and 36 other councilmembers co-sponsored a bill, crafted largely by the IPN Tenant Association and its advisors, which would make it harder and more expensive for building owners to withdraw from Mitchell-Lama, a state program. The bill, which has yet to be passed, helped pressure Gluck to negotiate, Fabricant said. But Gluck said that the proposed legislation "did not play a role." "That bill is illegal," he said. "The City Council in my view does not have jurisdiction in a state legislative scheme. It had no effect for me." Fabricant had predicted that a buyout was coming since he took over as tenant leader in June 2000. The tenants association, saying that a buyout could