Below are pertinent extracts of reports from the sources linked. Full text at the links. Subject headers are mine.
AT THE TENANT TOWN HALL MEETING IN NOVEMBER, 2013, THE TA'S LAWYER, TIM COLLINS, WAS CONFIDENT ABOUT THE MCIs BEING RESCINDED
He added that complaints include the TA’s belief that since some of the work benefits ST/PCV’s commercial tenants, they too should share in the cost and that in some buildings, there were “class C” violations found, which would make the owner ineligible for an MCI. There was also the issue that some apartments were being used for student housing. Another argument, specifically against the resurfacing MCI was due to the quality of the work.
“We have 40 to 50 pictures showing what a mess it was,” Collins said. “The workmanship was horrendous. So we were really surprised when these things (MCI notices) started pouring out.”
....Only half jokingly, when Collins took the podium, he slammed
down a pile of paperwork that was about six inches thick. Collins then told the
audience that if he wasn’t confident about getting results from the HCR, he
wouldn’t have shown up at the meeting. “I would not have canceled my
proctologist appointment,” he said.
OBJECTIONS TO SECURITY SYSTEM AND COMMAND CENTER
Some objections from the TA’s counsel:
• The system replaced a full electronic security management system installed in Peter Cooper Village only in 2004. Before a system is replaced, it must have exceeded its useful life.
• Critical documentation, such as government permits, and plans and specifications were not submitted, but should have been. There were different contract amounts cited. Change orders lacked proper verifiable information. Some change orders were for repair and restoration not eligible for MCI rent increases.
• The security command center was a new facility installed at 518 East 20th Street. This security center was relocated to 317 Avenue C as part of an overall rental plan for retail spaces on the property. This work did not qualify for MCI treatment, even before Sandy destroyed the command center.
CWCAPITAL OFFERED TENANTS A 35% REDUCTION IN RETROACTIVE MCI PAYMENTS IF TENANTS AGREED NOT TO CHALLENGE THE MCIs
In the past month, tenants have received notices that MCIs
(major capital improvements) for security upgrades done in 2009 as well as work
done that year on doors, resurfacing and water tanks and valves, had been
approved. The Tenants Association has since said it would challenge those MCIs,
while CWCapital has made an offer to reduce the MCIs’ retroactive portions by
35 percent if tenants agree not to partake in any challenge.
IN NOVEMBER, 2014, TA PRESIDENT JOHN MARSH WAS CONCERNED ABOUT PERMAMENT MCI RENT INCREASES AND NOT JUST RETROACTIVE PAYMENTS
“While we appreciate any gesture by management to soften the blow of these increases, it is not enough for them to look at just the retroactive amount,” he added. “We are also concerned with the permanent increase. We will keep all channels of communication open with management while we continue to collect public membership pledges, so we can be in a position of even greater strength moving forward.”
PDFs OF INTEREST:
TA LAWYER TIM COLLINS RESPONDS TO CWCAPITAL'S OFFER OF 35% REDUCTION OF RETROACTIVE MCI CHARGES AND THEIR STRONG-ARMED TACTICS:
TA'S "AGENDA" PDF ON NOVEMBER TOWN HALL MEETING:
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STR here. Some facts:
1) The TA's counsel did not challenge the MCIs and removed its request to a reconsideration of Prior Orders (the approved MCI increases) that were issued by the DHCR (Division of Housing and Community Renewal).
2) CWCapital's offer to tenants of a 35% decrease in retroactive MCI payments, and their threat against tenants challenging the MCIs, vanished with the wind. Tenants will now receive a complete removal of retroactive payments.
3) The DHCR signed off in the new "Order and Determination" that it "did not review all of the submissions or objections raised by the Tenants Association prior to rendering the Prior Orders." No blame is placed on this important lapse or an explanation given for it.
Some opinions:
It seems that the TA had CWCapital by the short hairs. Because CWCapital wants to put up STPCV for sale this year or next, it did not want to go into a lengthy legal process where the MCIs and retroactive charges could have been challenged in the courts, potentially holding up the sale. Otherwise, CWCapital would never have offered a complete elimination of retroactive MCI charges. These retroactive charges were also a powerful bargaining tool for CW. By offering to eliminate them, the company was able to present a significant prize to the TA, while still retaining a permanent MCI rent increase, which is of primary interest to any future buyer/landlord of this property.
[Another possible pressure on CWCapital to come to an agreement that hasn't been mentioned anywhere is the rumor that there may be a city-wide rent freeze coming from the De Blasio administration. Would such an occurrence also freeze MCI increases, if not actualized swiftly before a rent freeze went into effect?]
[Another possible pressure on CWCapital to come to an agreement that hasn't been mentioned anywhere is the rumor that there may be a city-wide rent freeze coming from the De Blasio administration. Would such an occurrence also freeze MCI increases, if not actualized swiftly before a rent freeze went into effect?]
The question is did the TA "blink"? Was the TA's case solid enough (as claimed by Tim Collins at the November 2013 Town Hall meeting) that the MCIs would have been rescinded, thereby also causing all the retroactive payments to disappear?
The DHCR's lack of reviewing all of the submissions and objections presented by the TA on the initial review of the MCIs is troubling. What the hell is going on there?
Troubling is also the fact that Tishman-Speyer in 2009 was responsible for 20% of all MCI applications in the city. These guys had no shame in sprucing up the property for self-serving reasons and throwing out rent-stabilized tenants and having tenants pay for the shafting. The current MCI agreement, while saving tenants any retroactive fees, continues this shafting.
And guess what? There are more MCIs on the way.
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UPDATE: 4/21/14
THE TA ATTORNEY RESPONDS TO THE ABOVE POST
http://www.stpcvta.org/ta/post/ta-attorney-sets-the-record-straight
--------------------
UPDATE: 4/21/14
THE TA ATTORNEY RESPONDS TO THE ABOVE POST
http://www.stpcvta.org/ta/post/ta-attorney-sets-the-record-straight
Tim Collins, TA’s attorney, responded to “Before and After: What Was
Hoped For in the MCI Matter” (April 20, 2014), a post that appeared on
the blog The Stuyvesant Town Report. STR’s summary contains
misinformation and appears to discredit the MCI Settlement and the
negotiations. Mr. Collins’s response, which was shared with STR the same
day, addresses every point made in the STR post and is shown below:
What needs to be understood is that some of the objections we initially submitted to the DHCR were already recognized by DHCR in its first set of orders. In those orders DHCR had already reduced the permanent MCI increases applied for by 23%. The additional reduction in the permanent increase we achieved at the bargaining table resulted in an effective 28% overall reduction in the permanent increases applied for (and a 100% reduction for some tenants who pay high rents).
DHCR did not formally consider all of our objections after it agreed to reconsideration for the simple reason that we entered negotiations which preempted such a review. At the bargaining table we used our objections as leverage to achieve a global resolution which, on balance, was thought to be superior to the cost and uncertainty of maintaining over 300 proceedings, and the inevitable administrative and court appeals that would follow.
No one can ever tell for sure what would have happened if we had abandoned negotiations and allowed the administrative (and ultimately judicial) challenges to proceed. We do know that the bulk of MCI increases applied for by CW Capital were legally appropriate and properly documented. We also know the DHCR almost invariably grants owners opportunities to correct defects in workmanship. In the long run it is quite likely the CW Capital would have prevailed on most of its claims. That may have occurred years from now at a cost of hundreds of thousands of dollars in legal fees. In the interim, tenants would have continued to pay the full permanent increases.
The negotiations themselves covered a complex array of legal and practical issues — with three major negotiating sessions taking place over a three-month period, including dozens of phone conferences. The TA’s negotiating team was vigorously involved every step of the way. The TA’s legal committee — composed of several exceptional and accomplished attorneys — reviewed and commented on all proposed changes and the TA Board carefully reviewed the deal before accepting it.
We went into the negotiations armed with a sound understanding of the law and past DHCR practices. We recognized several weaknesses and vulnerabilities in CW’s MCI applications. And we knew that DHCR had already addressed many of those problems. As noted, we had the extraordinary backing and involvement of the TA leadership. But the most important asset we had at the bargaining table was a strong TA. As the MCI and service issues arose over the past year the ranks of TA members who signed public member pledges swelled to nearly 4,000. That was, far and away, our most powerful weapon in obtaining a beneficial settlement.
Going forward, strong leadership and widespread tenant support remain the most valuable assets for every member of the ST/PCV community. And there are many challenges yet to come.
I will be in attendance at the May 10th TA meeting to answer more questions about the settlement. If anyone feels disappointed or critical of the agreement, I ask that they withhold judgment until these issues can be fully aired at the meeting. On many levels this agreement was a significant achievement for the TA and I was honored to participate in it.
--------------------------
STR here. So, my post that links to supposedly factual reportage "contains misinformation and appears to discredit the MCI Settlement and the negotiations"? Perhaps the blame should be placed on the Town & Village newspaper, which did this reportage and offered up quotes from the participants in the matter. I myself was at the Town Hall meeting and can verify, as best as one's memory can, the statements made there. If this factual reportage (and I believe it is factual) discredits the MCI Settlement and the negotiations in the opinion of Tim Collins and his firm, and I assume the TA, then what does that say about the settlement??? If the reportage is not factual, did counsel or the TA write to Town & Village to make them aware of the inaccuracy?
I also do not believe that I have been critical of the settlement, unlike some of the commentators in the comment section. I come around again and again to the same point: that residents should wait to see their new rent bill to weigh the results of settlement. And I frequently mention that counsel considered this the best deal it could achieve and do not imply sinister motives on their part in making such a deal for tenants.
So it's surprising that, suddenly, a post that reviews statements made before the settlement was achieved has created enough upset to warrant such a response from counsel and, by connection, the TA.
I'm all for transparency, however, so I do welcome this response and any statements that may be made about the settlement in the future.
Statement by Tim Collins, the Tenants Association’s Attorney
My statement at the November TA meeting that DHCR’s initial orders were issued in error (because our submissions had not been considered) was correct. I never suggested that this would result in a complete elimination of the MCI’s — only a reopening of the proceedings. Ultimately DHCR did admit its error and agreed to reconsider its orders and our submissions. Although not in form, in substance DHCR rescinded the prior orders by modifying their impact in significant ways. The retroactive increases were totally eliminated and a portion of the permanent increase was reduced by 5% to 100% depending on the class of tenants affected.What needs to be understood is that some of the objections we initially submitted to the DHCR were already recognized by DHCR in its first set of orders. In those orders DHCR had already reduced the permanent MCI increases applied for by 23%. The additional reduction in the permanent increase we achieved at the bargaining table resulted in an effective 28% overall reduction in the permanent increases applied for (and a 100% reduction for some tenants who pay high rents).
DHCR did not formally consider all of our objections after it agreed to reconsideration for the simple reason that we entered negotiations which preempted such a review. At the bargaining table we used our objections as leverage to achieve a global resolution which, on balance, was thought to be superior to the cost and uncertainty of maintaining over 300 proceedings, and the inevitable administrative and court appeals that would follow.
No one can ever tell for sure what would have happened if we had abandoned negotiations and allowed the administrative (and ultimately judicial) challenges to proceed. We do know that the bulk of MCI increases applied for by CW Capital were legally appropriate and properly documented. We also know the DHCR almost invariably grants owners opportunities to correct defects in workmanship. In the long run it is quite likely the CW Capital would have prevailed on most of its claims. That may have occurred years from now at a cost of hundreds of thousands of dollars in legal fees. In the interim, tenants would have continued to pay the full permanent increases.
The negotiations themselves covered a complex array of legal and practical issues — with three major negotiating sessions taking place over a three-month period, including dozens of phone conferences. The TA’s negotiating team was vigorously involved every step of the way. The TA’s legal committee — composed of several exceptional and accomplished attorneys — reviewed and commented on all proposed changes and the TA Board carefully reviewed the deal before accepting it.
We went into the negotiations armed with a sound understanding of the law and past DHCR practices. We recognized several weaknesses and vulnerabilities in CW’s MCI applications. And we knew that DHCR had already addressed many of those problems. As noted, we had the extraordinary backing and involvement of the TA leadership. But the most important asset we had at the bargaining table was a strong TA. As the MCI and service issues arose over the past year the ranks of TA members who signed public member pledges swelled to nearly 4,000. That was, far and away, our most powerful weapon in obtaining a beneficial settlement.
Going forward, strong leadership and widespread tenant support remain the most valuable assets for every member of the ST/PCV community. And there are many challenges yet to come.
I will be in attendance at the May 10th TA meeting to answer more questions about the settlement. If anyone feels disappointed or critical of the agreement, I ask that they withhold judgment until these issues can be fully aired at the meeting. On many levels this agreement was a significant achievement for the TA and I was honored to participate in it.
--------------------------
STR here. So, my post that links to supposedly factual reportage "contains misinformation and appears to discredit the MCI Settlement and the negotiations"? Perhaps the blame should be placed on the Town & Village newspaper, which did this reportage and offered up quotes from the participants in the matter. I myself was at the Town Hall meeting and can verify, as best as one's memory can, the statements made there. If this factual reportage (and I believe it is factual) discredits the MCI Settlement and the negotiations in the opinion of Tim Collins and his firm, and I assume the TA, then what does that say about the settlement??? If the reportage is not factual, did counsel or the TA write to Town & Village to make them aware of the inaccuracy?
I also do not believe that I have been critical of the settlement, unlike some of the commentators in the comment section. I come around again and again to the same point: that residents should wait to see their new rent bill to weigh the results of settlement. And I frequently mention that counsel considered this the best deal it could achieve and do not imply sinister motives on their part in making such a deal for tenants.
So it's surprising that, suddenly, a post that reviews statements made before the settlement was achieved has created enough upset to warrant such a response from counsel and, by connection, the TA.
I'm all for transparency, however, so I do welcome this response and any statements that may be made about the settlement in the future.
