Appeals Court Rules Against Independence Plaza on J-51

A state appeals court has held that Independence Plaza North is not subject to rent stabilization even though its landlord received J-51 tax breaks for two years after taking the Tribeca complex out of the Mitchell-Lama program in 2004. 

J-51 benefits are specifically intended for rent-regulated buildings, but in an April 3 decision, the Appellate Division, First Department, held that the benefits for Independence Plaza North should have ended automatically when owner Stellar Management took it out of Mitchell-Lama. As the city Department of Finance had erroneously failed to do that, the court said, the complex should not be required to become rent-stabilized. 

The decision overturned a 2010 lower-court ruling in favor of the IPN tenants. Seth Miller, the lawyer representing them, is seeking to appeal it.

“In my view, the decision strips important protections from the tenants of every post-1973 building getting J-51 benefits that is currently in any temporary, income-based program,” he said in a statement. “There was no mistake; the benefits were supposed to continue until exhausted.”

The decision specifically affects about 3,140 apartments in 27 buildings, Miller said—but it threatens a lot more. “Tens of thousands of NYC tenants in buildings receiving J-51 benefits are now at risk of losing their homes, if owners decide to refuse further benefits and to repay those they already received,” he wrote. The decision, he added, “makes rent regulation OPTIONAL rather than mandatory” in situations where a landlord wants to deregulate entire developments.