In October, Planetizen reported on the "largest real estate deal in US history". Profits of the $5.4 billion sale in NYC could be reduced by 6%, or $324 million, if tenants win their suit that 25% of the 12,232 apartments were illegally deregulated.
On Jan. 22, a group of tenants in lower Manhattan's Stuyvesant Town and Peter Cooper Village, built as affordable homes for returning veterans from World War II, charged in a lawsuit in State Supreme Court that MetLife (the owner) had illegally charged market-rate rents for more than 3,000 apartments in the complexes that span from 14th to 23rd Streets overlooking the East River . "The suit accuses the company of 'wrongfully pocketing' nearly $25 million in New York City tax benefits."
"The tenants contend that MetLife received $24.5 million in tax breaks since 1992 under the city's J-51 property tax program, which, they say, prohibits a property owner from removing apartments from rent regulation."
"The class-action lawsuit, which names both MetLife and the new owner, Tishman Speyer Properties, seeks to roll back rents at Stuyvesant Town and Peter Cooper Village. It also seeks a formal declaration that the other 3,000 apartments remain subject to rent regulation at least until the tax breaks expire, in 2017 or 2018. The suit also asks for $320 million in damages, or three times the rent overcharges for the past two years, as calculated by the plaintiffs."
"Under state laws passed in the 1990s, an apartment can be decontrolled after it becomes vacant and is renovated, or if the rent reaches $2,000 a month and the existing tenants' household income rises above $175,000 for two years. In the last four years, MetLife has done extensive renovations to vacant apartments, taking a total of 3,037 apartments out of rent regulation."
FULL STORY: Suit Challenges Rent Jumps in Complexes MetLife Sold
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