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“energy on telling the political establishment that we are
a mighty mighty force that is just beginning to wake up,” he
said.
And the association, which has found a vocal advocate in Councilmember
Alan Gerson, is making some progress, Fabricant told the tenants.
The proposed IPN sale has been under review since last fall by
the city’s Department of Housing Preservation and Development
(HPD), an agency that IPN tenant leaders have long claimed ignores
tenants’ interests. Fabricant said he believed that Deputy
Mayor Doctoroff’s office had taken an interest in IPN and that
the review of the sale was now “out of HPD’s hands.”
“That’s a very positive step,” he said. “HPD
was going to railroad us right out of here.”
A spokeswoman for the Mayor’s office did not return a phone
call seeking comment.
The tenant association has also rounded up support from Community
Board 1, local PTAs and community organizations, city tenant coalitions
and affordable housing advocates.
With help from a team of legal and financial consultants, the association
is trying to devise a tenant-led purchase of IPN that would deliver
to the Cohns, or Gluck, fair market value for the complex. The deal
could involve tax credits, low-interest loans, government loan guarantees,
subsidies or bonds.
IPN could then remain a Mitchell-Lama rental or be converted to
a limited-equity co-op, or could be a combination.
“We believe that we can structure a deal where we can be protected,”
Fabricant said.
“The idea is to offer people a menu of options to stay in
their apartments—-either to purchase at a price below market,
or to rent, maintaining rents with as modest an increase as possible,”
Alan Epstein, a partner at Manatt, Phelps & Phillips and a lawyer
for the tenant association, said at the meeting.
The tenant association is also preparing a bill to present to the
City Council that would protect tenants. Fabricant declined to discuss
details of the proposed legislation, but said it would provide “a
powerful mechanism to change the economics of a deal for anyone
who wants to buy out, so if they try to do it without tenants’
approval, there will be a big, big price to pay. We’re confident
the bill is valid, but we need the political will and the political
organization to get it passed.”
Tenant associations at other city Mitchell-Lamas have fought buyouts
in court, but Fabricant said that litigation would be a last resort.
While lawsuits have slowed buyouts at other buildings, he said,
they led to “lousy settlements.”
“Not one has been able to stop a buyout,” he said. “We’re
not looking for litigation, going back and forth in court, and then
ending up with a bad deal.” But, he added, “if we lose
in the political arena, we’re definitely going to court.”
One tenant, Ken Lane, suggested that the association begin a rent
strike, a tactic that IPN tenants used in 1980 to fight a rent increase.
“It will show Larry Gluck that he is buying into a place that
has a unified tenant body that wont’ accept anything and everythign
he wants to do,” Lane said.
But Fabricant said he did not believe a rent strike was a good
strategy to stop the sale.
“We need to get them [Cohn and Gluck] worried about something,
and in the end, what they will worry about is what we present to
the Mayor, to Doctoroff. If we get legislation passed, they’ll
worry because then they have to overturn it.”
Since making known his intention to buy IPN last September, Gluck
has tried to reassure tenants, saying that he has no intention of
forcing anybody out and that most tenants will be protected from
rent hikes by government rental assistance programs.
Echoing Gluck’s assurances, an HPD official said at a meeting
of Community Board 1’s Tribeca Committee on Feb. 7 that about
two-thirds of IPN tenants will qualify for government rent subsidies,
known as enhanced or “sticky” vouchers, which will keep
their rents afforable if a buyout goes through.
Gary Sloman, the director of operations for HPD’s Division
of Housing Supervision, acknowledged that an owner is not obligated
to accept the subsidy program but said that his agency would “strongly
encourage the owner to accept the program.”
“I can’t imagine any motivation for an owner not to be
in the program,” Sloman said. “Rents would be set at a
high market level, the owner would probably avoid litigation and
he would probably be assured of a steady stream of income from the
tenants.”
The vouchers cover the difference between the amounts that tenants
pay and market-level rents. Under the program, rents paid by tenants
are set by the government and depend on household size and income,
and cannot exceeed 30 percent of income.
But IPN tenant leaders remain skeptical, saying that Gluck may
indeed decline to accept the vouchers -- or may accept them temporarily
while he renovates and upgrades the complex, only to then opt out
of the subsidy program and bring in wealthier residents who can
afford market rents without government assistance. The tenant association
also warns that the subsidy program, which must be renewed by Congress
every year, could be cut in the future because of budget constraints.
“Forget about the idea that you’re protected out of the
goodness of the landlord or HPD,” Fabricant told tenants at
the meeting.
The association also worries that the roughly one-third of IPN
tenants not covered by the subsidy program could be priced out of
the complex after a buyout. Gluck has said that tenants who can
afford it will be charged higher rents, but that reasonable increases
will be negotiated with the tenant association.
Under new HPD regulations that went into effect on Feb. 1, an owner
must give HPD one year’s notice of his intention to buy out
from Mitchell-Lama. Previous rules required only six months notice.
Gluck must take ownership of IPN before he can apply for a buyout.
There is no deadline for the city to approve or deny Gluck’s
purchase.
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