Wednesday, December 16, 2009

SoHo Real Estate

Patriotism is often an arbitrary veneration of real estate above principles.
-- George Jean Nathan (1882 - 1958)

The pace of construction has slowed Downtown. The new projects that are moving forward are primarily hotels. In part, this is due to the fact that little community review is needed when building as-of-right structures in a manufacturing zone. The Trump SoHo project is nearly completed and both the Tunnel Garage and Moondance Diner sites are in final stages of construction.

Tunnel Garage Condo

Moondance Hotel

The condo project at 350 West Broadway is also nearly completed.

Rumors abound as to the success of any of these projects due to the dearth of financing for construction. In the case of Trump SoHo, 350 West Broadway and the Tunnel Garage condo development – the truth about sales is hard to come by. The fact that there is a vacant lot for rent at 100 Varick Street where an eight story rental building had been approved – followed by rumors of yet another hotel – tells the story of commercial real estate and development.

For tenants, the Stuyvesant Town decision at the Court of Appeals is the big story. Tishman-Speyer gambled and lost. Why any company would believe that thousands of rent-stabilized tenants could be forced out of their homes is a serious misunderstanding of a city that is built on landlord-tenant litigation.
Essentially, those landlords who benefitted from J-51 tax abatements are now precluded from using the luxury decontrol option to force stabilized tenants from their homes.
This was a ploy used by many aggressive operators to force tenants out of their homes.
In one case, two real estate newcomers who are also dentists at a Varick Street location in SoHo (actually Hudson Square) have been using this method for many years. Among the many other dubious methods to harass stabilized tenants out of their homes luxury decontrol has been the choice of these characters – with the willing cooperation afforded by DHCR and Department of Buildings. These denuded agencies allow illegally operated buildings to use the courts in furthering landlord plans. The Mayor has intentionally weakened both of these agencies in order to evict legal tenants and further development in Manhattan.
Recent laws regarding harassment and abuse are seldom enforced requiring huge legal fees to be paid by tenants. The $5,000 fines for such behavior enacted by the City Council is not only a joke, but is rarely imposed. In reality, tenant protection is a figment of the City Council’s imagination, in spite of the laudable efforts by Speaker Quinn. If you, as a tenant, pay legal fees and cannot pay rent at the same time – you lose one way or the other.

The Court of Appeals ruling, however, recently eliminated luxury decontrol in any building that was afforded J-51 tax relief for the landlord. Further, current market rate tenants who live in apartments, which formerly were stabilized – and were previously converted to market rate – may now be restored to stabilization. This is true regardless of whether the current market rate tenant occupied the apartment at the time it was converted from a stabilized status. In addition, any rent paid which was higher than what was once the registered stabilized rent – can be retrieved from the landlord (with treble damages) by the tenant.

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