It may be one of the most inscrutable public issues in recent city memory, but that won’t stop a rent control amendment from going to a public vote.
Superior Court Judge Arthur D’Italia ruled Monday that a referendum could go forward on a rent control amendment that allows former federal Housing and Urban Development-mortgage or HUD-owned buildings coming out of bankruptcy to be subject to a one-time rent increase to market value, and thereafter be placed under rent control.
The amendment is being challenged by 56 tenants of Metropolis Towers.
D’Italia dismissed Monday a motion by a majority shareholder of Metropolis, a Downtown co-op, to reconsider D’Italia’s earlier ruling allowing the referendum to go forward. Meanwhile, the city clerk was assailed Wednesday for not presenting the amendment to the council for reconsideration. Reconsideration would give the council the option of repealing the measure to avoid a referendum.
The matter that started as an internal squabble last year metamorphosed into a court case and is now a ballot initiative that revolves around one complex.
Ostensibly, the measure adopted by the council, 6-3, in October was crafted for the Metropolis Towers buildings, formerly known as Gregory Park.
City Clerk Robert Byrne said he intends to place the initiative on the June 5 state primary ballot, but tenants and an attorney representing them had wanted it placed on the ballot for the May 8 mayor and council elections.
“My guess is the City Council members don’t want to run against this,” said tenant attorney Bryan Blaney. “They don’t want this on the ballot. They don’t want to run against their vote.”
In responding to charges by Blaney and tenants that he was delaying the process, Byrne stated simply, “It’s not true.”
On Monday, Byrne had indicated to the council that he intended to present the matter for their consideration. The City Council could choose to revisit and repeal the ordinance, which would negate the need for a referendum.
But after the Monday ruling in favor of the ballot, Queens-based Metrovest filed a motion for “emergent relief.” Byrne said the law department informed him of the motion, but by then it was too late in the process to introduce the matter for this week’s consideration. He also said that even if he had introduced the measure to the council for reconsideration last week, it would not have made the statutory requirement for the May 8 ballot.
Tenants mobilized
When the council approved the amendment in October, tenants quickly mobilized to put the matter to a public vote.
But Metrovest shareholder George Filopoulos and other shareholders said tenants misled signers of the petition into thinking the ordinance was a widespread repeal of rent control. He got 55 signers to withdraw their names from the petition on these grounds.
As the referendum looms, Filopoulos said he would continue to try to settle with the tenants.
“I’m trying to be done with this thing,” Filopoulos said last week. “We’ve continued to try to settle the matter.”
Tenants Jacquelyn Smith and Clay Cockrell said the latest offer for a 12.7 percent rent increase and $5,000 moving expense compensation was withdrawn by Filopoulos, but he declined to comment on any current settlement talks.
“We have said we will always go with a rent increase if it’s appropriate,” said Cockrell, who pays $735 for a studio he has lived in for four years.
Shareholders like Irma Colon have said that the tenants’ low rents are a financial drain on the co-op, and she said they should pay more than they do now.
In 1999, Metropolis Towers was on the brink of foreclosure when Filopoulos assumed a portion of the buildings’ $25 million mortgage owed to the federal department of Housing and Urban Development. He also took over 340 of the two buildings’ 770 units as a major “shareholder.” But when he tried to raise rents – some by as much as 200 percent – on the advice of the city’s rent leveling administrator, he got sued.
Filopoulos lost when a Hudson County Superior Court Judge determined that the buildings should still be considered under rent control, even though they had never been.
He then got the City Council to approve an amendment to the current rent control law to specifically apply to buildings of that ilk.
Byrne maintained that he simply wants to put the matter on a ballot that would not cost taxpayer money. A special election could cost the city around $200,000.
Byrne has the authority to write the ballot question, but expects at least one party to file a grievance over the language.
“I’ve done the best and fairest job I can,” he said, alluding to a quote he made several years ago. “Now it’s time to sue me.”