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Friday, April 18, 2014

The Pros and Cons for Tenants in the MCI Agreement

There’s a possibility this post will be revised somewhat if I receive clarification on certain points. Otherwise, here it goes….

Pros

The big and only pro that I see is that retroactive MCI charges have been dropped. This can save individual tenants up to thousands of dollars. The question remains just how these retroactive charges would have been actualized. Certainly not in a lump sum, so their addition onto a rent bill may have been minimal, though long-lasting. Do note that if the MCIs were successfully challenged, in part or in full, the retroactive charges would have been lessened according to which MCIs failed to pass. If all the MCIs had met successful challenge, retroactive charges would have been non-existent. So if we won on the MCIs, no retroactive charges. The lawyers for the TA decided not to challenge the MCIs.

I don’t see any other advantage in the agreement. Yes, we have a 5% decrease in MCI costs (that disappears with the tenants following us), but that is a pittance that will be hard to notice on your monthly rent bill and is really insulting to mention as much of a “win” for tenants. You probably wouldn’t be able to afford a Café Latte at Oval Café for the amount you will save.

Cons

Affordable housing took another hit with this agreement. The MCIs are not under challenge anymore and are permanently attached to the rent of every apartment. 

These were the five MCI charges under review: video intercoms, security system, video command center, water tanks/valves, and repaving of the walkways.  Two were for PCV, three for Stuy Town. 

It irks me, and perhaps you, that the video command center and security system has gotten an MCI, as neither has been shown to be effective in stopping crime as it happens. Furthermore the video command center we are paying for is no more, replaced by a new one (another future MCI?) and has been used for purposes like gazing at Stuy Town’s bikini babes during the summer and spying on residents--including STR himself, I may add.  Residents also have complained about the quality of the video intercoms. My own is erratic, sometimes refusing to open the entrance door. (Worse, there’s word that the company that made these intercoms is no more, making these intercoms obsolete in the long run.)

The most egregious MCI, however, is for the repaving of the walkways. It has been proven through the years, with many photos, that this repaving was shoddy work and that the complex has been in need of "repaving the repaving" for a long while now.  I remember that when Al Doyle was president of the TA, he stated that any such MCI was going to be challenged because the facts of poor workmanship were abundantly apparent with all the significant cracks that began to appear not long after the repavement project. Photos were taken by the TA and also by this blog.  Expect another MCI in the future to replace the aftereffects of the repavement MCI was are now paying for.

A loathsome part of the agreement is this threat by CWCapital, with the TA as signatory, that is introduced as “VERY IMPORTANT”: 

“The agreement requires the Tenants Association to use good faith efforts to prevent the filing of individual Petitions For Administrative Review (PARs), which directly or indirectly challenge the settlement. Such PAR could result in the agreement being nullified in the sole discretion of the owner. Nullification would result in forced repayment of the retroactive charges and any waived portion of the permanent charges by all tenants who benefited from the agreement. The possibility of nullification by the owner due to an ill-advised PAR is a very serious concern to the Tenants Association.”

I despise this kind of strong-armed tactic that CW has used before. BUT, because of the possibility of retroactive MCI charges of thousands of dollars per tenant being placed back on track, and because no tenant I know is in a financial place to retain superior legal counsel, I’m expecting this threat to be accepted by the community and with gritted teeth by some of us.

So that’s it. Could these MCIs have been successful challenged? I don’t know. It seems that the TA was in a very good position here, because CW wants to sell this place and such legal challenges would have put such a potential sale in a time limbo for a while. I’m assuming the TA lawyers felt that this agreement was the best deal that could have been acquired for residents.

Comments welcome.

28 comments:

Anonymous said...

Again, the benefits to tenants under this agreement are, IMO, much better than those achieved by any PAR concerning MCIs in all the years I have lived here because the DHCR is such a rubber stamp for landlords on MCI applications.
Any complaint should be about the state of the law relating to MCIs and with Cuomo for not having eliminated the pro- landlord bias of the DHCR which started under Pataki.

Anonymous said...

COUGH. I call BS. CW knew they'd never get the past and old Mci's approved. All part of a distraction just to get the going forwards approved for lifetime.

Nothing but BS. Anyone who thinks this is a win for us is full of BS.

Edmund Dunn said...

Anony 2.59-Spot on!

Anonymous said...

Damn. Roberts Tenants got screwed here.

Stuy Town Reporter said...

How did the Roberts tenants get screwed?

Anonymous said...

"CW knew they'd never get the past and old Mci's approved:

And your proof on this is? Your knowledge of the current MCI law is? Hey, the 3 ST MCIs and the 2 PCV MCIs, they WERE approved by DHCR with an average reduction of 23% prior to the TA/CWC/DHCR negotiations. Facts, please.

Anonymous said...

From what I'm reading, the Roberts tenants are reduced by only 5% - non roberts by 100%.

Anonymous said...

This is the summary CW and TA et al co-wrote. Where can we see the actual document? That is our right, yes? We need to see that.

Stuy Town Reporter said...

I and other tenants received something in the mail today that could be it. Haven't had a chance to take a look at it, however.

Anonymous said...

You received a copy of the document they all signed or a DHCR written summary?
We need to see the agreement document they all signed.

Anonymous said...

STR, what you and I received today was the DHCR “Order and Determination” that has the names and addresses of both law firms plus the legal details of the “Stipulation of Settlement”. Exhibit A, I believe,has all the docket numbers of the MCIs for this settlement.

Anonymous said...

Everyone should have received the Order and Determination today in the mail. It makes some things clearer and some more confusing. But bottom line, there is no way to think that the MCIs could have been challenged to the point where they went away altogether. They were things that are allowable under the law and the costs were substantiated (albeit with 23% knocked off). If they aren't functioning, we can file a Rent Reduction Application. The system stinks--that we can all agree on. And don't forget about the bogus deal CW offered us: they would knock off about a third of the retroactive if a tenant agreed to sign away the right to challenge, and they could unilaterally change their mind.

Anonymous said...

Got the booklet mailing today from the DHCR. Did all tenants get this?

Stuy Town Reporter said...

>>Everyone should have received the Order and Determination today in the mail. It makes some things clearer and some more confusing.<<

I just had a sit down to read through it. Thankfully, I'm not a Roberts tenant, because that section is absurdly confusing, at least to me.

One potentially very troubling sentence in the agreement that comes right after the waiving of the retroactive fee:

"Commencing with the January 2014 rent bills, Owner shall bill the full permanent MCI rent increase, subject to the 6% cap set forth in the RSC."

I hope, hope this doesn't mean that we will actually get a higher monthly bill.

Anonymous said...

This place has turned into The Twilight Zone.

Very scary.

Anonymous said...

I think that sentence about billing the full permanent MCI rent increase has to be read together with the sentences that follow, about the credits. The landlord bills the full MCI charge, but then credits the tenant for a percentage of that charge. The amount of the credit varies. For some it is 100%, for others, 50%, etc.

Anonymous said...

It also bothers me that the hotline for Roberts tenants is Compass Rock and the TA didn't even tell us. I should have known by the 420 prefix but I just assumed it was the Roberts atty at first and then the way the woman answered gave me pause. I had the presence of mind to ask who I was speaking with and it took a couple of asks to go from the first name, to PCVST to Compass Rock. So if you call, just get the info and get off. I was annoyed that I actually had to speak with the office unnecessarily. I don't want to be on their radar at all except for lease renewal time.

Anonymous said...

Troubling how quickly they placed press articles in curbed and the real deal to spin this as a monster-size win for tenants. If it were so great they wouldn't need spin.

Anonymous said...

"It also bothers me that the hotline for Roberts tenants is Compass Rock and the TA didn't even tell us."

This really bothers me as well. Like you, I assumed it was the Roberts attorneys. I definitely asked a question (about the lease renewal packet I received earlier this week) that I would not have asked if I had realized I was speaking with someone from Compass Rock.

The person who answered the phone gave only her first name. That's annoying right off the bat. But really, the TA should have made it clear that when you call that number, you are calling Compass Rock.

It was not until I got the DCHR mailing that I realized whose phone number that was -- after I had already called.

Anonymous said...

Dear 99 Percenters,

Here's your 5% discount, now don't spend it all in one place.

Yours Truly,

The 1 Percent

Anonymous said...

Someone needs TO DISCUSS WITH ALL 11,250 OF us regarding renewals on this.

new tenants and old leases as well. This smells bad. NEED ADVICE ON RENEWALS.

mjc said...

>>NEED ADVICE ON RENEWALS.<<

What kind of advice, exactly? What's your question about renewals?

Anonymous said...

Its a good deal for political headlines.
Its a good deal for the CW rent roll.
It is NOT a good deal for a tenant.
Who negotiated this - the same people who negotiated our Roberts settlement which unraveled the Judges ruling in tenants favor into a settlement that favored CW and again gave the politicians their headlines while tenants were not made whole financially and were evicted?
People negotiating this did not have the tenants best interest in mind.
They clearly prioritized the property sale and their own self interests.
To the 26,000 tenants who did not sign the waiver - thank you! To the 3300 tenants who signed the waiver in December to have these players challenge the MCI with a settlement - what were you thinking?

Stuy Town Reporter said...

>>Who negotiated this - the same people who negotiated our Roberts settlement which unraveled the Judges ruling in tenants favor into a settlement that favored CW and again gave the politicians their headlines while tenants were not made whole financially and were evicted?<<

No, different law firm.

Again, let's wait to see how this plays out on our rents.

Anonymous said...

Have legal advice on all renewals going forward. There are going to be clauses and verbiage to not only include these increases but several more every year. Good luck. Get ready to pay (especially older units with lower rents)

Anonymous said...

"The Truth Behind the MCI Negotiations

Misinformation and partial information about the MCI Settlement is spreading over the blogs. We all know that the process of the MCIs is confusing, and the TA's negotiations with CWCapital were complex, so it's important not to simplify them into inaccuracy or make assumptions not based on fact. And it's also important not to use inaccuracies and assumptions to give people the wrong impression of what the rent law allows and what happened with the five recent MCIs.

Early April 20, 2014, the Stuyvesant Town Report presented a summary of events in the life of the "MCI Matter," consisting of extracts of statements that we think were either out of context or misinterpreted. The result was to create a distorted version of what has been said and what has been done. The TA's attorney, Tim Collins, responded point by point to the criticisms raised. It is an excellent summary of the MCI process and can be read"...

here: TA Attorney Sets the Record Straight - http://www.stpcvta.org/ta/post/ta-attorney-sets-the-record-straight

Stuy Town Reporter said...

My response to the response, added to the post in question:

http://stuytownreport.blogspot.com/2014/04/before-and-after-what-was-hoped-for-in.html

Anonymous said...

The renewals are going to be full of extra charges. Permanent and ever increasing.