Tenants of a Downtown high rise flatly rejected an offer that would have allowed them to pay lower, stabilized rates or to receive a $5,000 buyout and six months free rent. Instead, they said they would continue to take the matter to a public vote.
“It’s really very simple,” said Jacquelyn Smith, a leader of over 50 tenants of Metropolis Towers, two high-rises on Marin Boulevard, last week. “We involved the citizens of Jersey City. We cannot impugn our integrity by selling out for $5,000.”
The citizens are involved because the tenants have pushed for a public vote, or referendum, about a council-approved amendment to the rent control law. The referendum should be held sometime late this spring, possibly on the date of the gubernatorial primary in June. Tenants had hoped to get a municipal election date vote in May. A Superior Court judge ruled two weeks ago that the matter could go to a vote, after the majority shareholder of the building attempted to block the effort. Those tenants of the co-op have fought a proposed rent increase for the past year and a half.
The rent control amendment that they are fighting 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. While some buildings in the city other than Metropolis Towers could be affected by the change, many observers agree that the extraordinarily Byzantine circumstances would need to be replicated to achieve that.
In 1999, Metropolis Towers (formerly Gregory Park) was on the brink of foreclosure when now-majority shareholder George Filopoulos, of Queens-based Metrovest, assumed a portion of the buildings’ $25 million mortgage owed to HUD. He also took over 340 of the two buildings’ 770 units as a major “shareholder” – in essence an owner of a part of the building. 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 that specifically applies to buildings of that ilk.
Many of the tenants had taken over abandoned or absentee-owner apartments when the co-op sorely needed an infusion of cash for the perpetually ailing complex. These tenants now blanche at the prospect significant rate hikes.
An offer they could refuse
But at a City Council meeting Wednesday, attorney Brian Doherty, an on-again-off-again representative of the Metropolis Towers shareholders, made an offer that would have allowed those tenants to pay rent under current rent-control laws, which call for annual step-ups of around 2 to 3 percent – the so-called Consumer Price Index. Or, if they chose to leave, the tenants would have received six months free rent and $5,000 in moving expenses. In exchange, the tenants would have to drop the referendum.
“This is really our last offer,” said Doherty. Earlier offers had called for significantly higher hikes.
At the meeting, the council also voted 7-0 to consider the repeal of the initial October vote for the rent control change. The referendum process allows for the council to revisit and, should they choose, repeal the matter to prevent it from going to a vote. They cannot, however, make any changes during the referendum process to the amendment.
Majority shareholders had long argued that the tenants of the co-ops serve as a financial drain on the building by not paying their fair share. Tenants contend that court rulings back up their claims that majority shareholder Filoupolos acted improperly when he tried to raise rents.