IPN Tenants and Owner Reach Deal

by Ronald Drenger

After almost two years of anxiety over the future of their homes, tenants at Tribeca's Independence Plaza North complex are breathing a collective sigh of relief.

The residents, many of whom have lived in the complex for more than 20 years, applauded the news that their tenant association and owner, after months of negotiations, had reached an agreement in principle that will protect tenants from hefty rent increases when the complex is withdrawn in June from the government's Mitchell-Lama housing program. Formal papers had yet to be signed on March 8, when tenants gathered in a Borough of Manhattan Community College auditorium to hear tenant association president Neil Fabricant announce the deal. But Fabricant could not have been more reassuring. "Nobody is ever going to have to leave Independence Plaza on the basis of not being able to afford to live there," he told the several hundred tenants who attended.

Fabricant explained details of the agreement and said it would probably be finalized within a week. "I'm ecstatic," said Howard Simms, who has lived at IPN since 1978. "It's a better deal than I thought we'd get." "It seems like everybody got protected, which is what we wanted," said Bonnie Ryan, a resident at 40 Harrison Street, one of three 39-story towers in the IPN complex. "I feel a whole lot more secure than I felt when I came here tonight," said an elderly tenant who declined to give her name. IPN's owner, Laurence Gluck, is taking the complex out of the Mitchell-Lama program, which keeps rents below market levels. The required one-year waiting period for the withdrawal process, known as a buyout, ends in June. After the buyout Gluck will be free to charge market-rate rents. Gluck has said that about two-thirds of tenants in the 1,337-unit complex will be eligible, based on household income, for "sticky vouchers," a federal subsidy program that caps rents at 30 percent of tenants' incomes—equal or close to what they pay now under Mitchell-Lama. The government-financed vouchers pay the owner the difference between that amount and market rent. A central component of the new IPN deal covers existing tenants who don't qualify for vouchers. Under terms of the agreement, for the first nine years rent increases for those tenants will match the increases for rent-stabilized apartments, which are set annually by the city's Rent Guidelines Board.

		Currently, allowable increases are capped at 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 an additional 3.3 percent. After that, rent increases will be capped at the rent stabilization amounts plus one percent. Another issue in the negotiations was how to handle tenants who are eligible for vouchers but are "overhoused"—living in apartments bigger than they need, according to government rules. Under voucher program regulations, those tenants must move to a smaller apartment within one year, and have to move out of the complex if no appropriately sized apartment is available. Under the new deal, Gluck will allow those tenants to continue living in their apartments, and paying their
voucher rents, after the 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 deemed by government rules to be too small for their family size. There is still concern that voucher tenants may be vulnerable in the future because the Bush administration has proposed drastic funding cuts for the sticky voucher program. Fabricant said that the IPN Tenant Association and a coalition of affordable housing advocates would lobby the Bloomberg administration to pledge that the city will step in and fund the vouchers if federal money is cut off. "Voucher tenants will be protected as long as we stay strong on the political side of the battle," Fabricant said at the tenant meeting. "And if we don't get guarantees from this administration, we'll get it from the next mayor. We're totally committed to making sure those vouchers are appropriated every year." The deal between the tenants and Gluck also covers parking fees and renovations at the complex. For tenants who use the parking lot under IPN, fees will go up to $200 a month for the first year after the buyout, and then will jump by $75 in each of the next four years. After the fifth year, Gluck will be able to charge market rate for parking. Gluck will pay for building improvements at IPN, including new windows, renovations for the lobbies and the outdoor plaza, and repairs for stairwell lighting and plumbing inside apartments. "All the capital improvements that he wanted us to pay for, is on him," Fabricant said. "This is going to be a really upgraded set of buildings from what the Cohns were running," he added, referring to the family that owned IPN before Gluck bought the complex last year. Gluck and his representatives said they did not want to comment on the tentative deal until it was finalized. Ethan Geto, president of Geto & de Milly, the tenants' public relations and lobbying firm, who was a central player in the negotiations, called the agreement with Gluck "the best deal ever made for any Mitchell-Lama development exiting the program." Tenants at some other complexes in the city that have been taken out of Mitchell-Lama have faced much steeper rent increases. Fabricant and Geto gave credit to Gifford Miller, speaker of the City Council, who received a standing ovation during a brief appearance at the tenants meeting. Miller co-sponsored a Council 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. The bill, which has not yet been passed, helped pressure Gluck to negotiate, Fabricant said. Members of Miller's staff also mediated at negotiating sessions between Gluck and the tenant association, which took place at Miller's offices. "You helped build this neighborhood and you deserve a chance to continue to live here," Miller told tenants at the March 8 meeting. He called the deal "a phenomenal victory" that he hoped would serve as a model for other buildings that leave the Mitchell-Lama program. Stacy DiLieto, who has lived at IPN for more than a decade, agreed. "This is a landmark deal. I hope it will help tenants at other Mitchell-Lamas, too," she said. "For us at IPN, a weight has been lifted."