IPN Tenants Seek a Deal with Owners Over Rent Protections

It was only last year that the month of January 2002 loomed large on the worried minds of Independence Plaza tenants. On Jan. 25, to be exact, the owners of the three-building residential complex, Duane Street Associates, could seek to withdraw, or "buy out," from the Mitchell-Lama government housing subsidy program that keeps IPN rents below market levels.

But that date has come and gone with no sign of an attempted buyout. In fact, the tenants association hopes to come up with a proposal that would protect tenants but make landlord Harold Cohn happy.

Neil Fabricant, president of the tenants association, still believes the owners will try to buy out of the program, though perhaps not until the real estate market rebounds from the effects of Sept. 11. But Fabricant said he hopes to avoid the long legal battles that have consumed tenants of other New York City buildings whose owners sought permission to raise rents to market levels in recent years. The Mitchell-Lama program, begun in the 1950’s, keeps rents low while giving developers tax breaks and low-interest loans.

"In the buyout scenarios that we have seen, the tenants lose," he said, referring to complexes such as Ruppert Yorkville, on the Upper East Side, and Waterside, on the East River at 23rd Street, where tenants battled owner buyouts in court. "Ruppert Yorkville and Waterside were bad deals."

Settlements reached last year in both those cases allowed the owners to buy out and rent vacant apartments for market rents, while rents for existing tenants can be raised every year, though in limited increments.

"We want to get on the same side of the table as the owner," Fabricant said. "We want to see if we can use some mix of public and private financing to pay the owner fair compensation while preserving the public interest. The ultimate objective is to keep tenants here at affordable rents."

The proposal, he said, could involve "any combination of outside buyers, inside buyers, condos, equity co-ops, vacant apartments at market rents, or commercial rentals." Payment, he said, would come from tenants and the state, with additional subsidies. A financial consultant was hired to design a range of options.

To make the job easier, Fabricant requested financial documents from the owners. Harvey Cohn, the general manager, said that they are reviewing the request.