By Julie Shapiro
DNAinfo Reporter/Producer
FINANCIAL DISTRICT — The owner of 37 Wall St. illegally deregulated an apartment that should have been rent-stabilized, a Housing Court judge ruled last week.
Judge Bruce Scheckowitz affirmed his previous ruling on the matter from late last year and denied the landlord’s motion to re-argue the case.
If the ruling holds, it could open the door for thousands of other lower Manhattan apartments to become rent-stabilized.
In his Aug. 4 decision, Scheckowitz wrote that the apartment should have been rent-stabilized because the landlord, W. Associates, received a 421-g tax break. The 421-g program offered tax incentives to downtown developers who converted offices to apartments between 1995 and 2006, as long as they made the units rent-stabilized.
The question, though, is what happens when the rent in those apartments tops $2,000.
W. Associates argued that the apartments are subject to luxury decontrol, which means they are no longer rent-stabilized when they hit $2,000. In this case, the 37 Wall St. apartment initially rented for nearly $5,000, so it was never rent-stabilized, argued Kevin Smith, the landlord’s attorney.
But Serge Joseph, who represents the tenant, said that no matter how high the rent rises in 421-g apartments, rent-stabilization still holds.
Judge Scheckowitz agreed.
“It is unfair for an owner to receive [tax] benefits which reduce operating cost and not, conversely, provide some benefit to the tenants as well,” Scheckowitz wrote in his decision.
Smith, who represents the landlord, said he disagreed with the decision but had not discussed it with his client and did not know if he would appeal.
A representative for W. Associates declined to comment.
In addition to affecting the other tenants of 37 Wall St., the ultimate resolution of the case could affect more than two-dozen downtown buildings that also received the 421-g tax abatement.
