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WaHi Co-Op Becomes Rent-Stabilized Complex After AG Finds They Broke Rules

By Carolina Pichardo | November 16, 2015 4:19pm
 Attorney General Eric Schneiderman.
Attorney General Eric Schneiderman.
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FORT GEORGE — Washington Heights realtors gamed a state affordable housing program for decades by fronting as a co-op then raking in a profit renting apartments out at market rate, according to the New York State Attorney General.

That came to a stop Thursday when the Fort George Apartment Corporation and its shareholders — Fort George Property LLC, Fort George Realty, LLC and NY Tryon Realty — which run the buildings at 121-131 Fort George Ave., lost their co-op status Thursday under a court settlement with Attorney General Eric Schneiderman's office.

The apartments are now registered with the Division of Housing and Community Renewal's Office of Rent Administration as rent-stabilized apartments — after Schneiderman sued them on Jan. 15.

The case is the first time an Attorney General has used dissolution powers on a housing cooperative in New York State, officials said.

"[The] settlement is yet another example of my office fighting to protect tenants being improperly deprived of affordable housing," Schneiderman said in a statement.

Tenants who wish to purchase their apartments will be provided with mortgage assisting support and resources, officials said.

If the complex wants to return to co-op status, it would have to restore the existing purpose of the co-op, selling apartments for 25 percent off of market rate to current tenants — or convert the entire building to a limited equity housing cooperative, which is determined by income. They have until early next year to decide, officials said.

Josh Gottlieb, who signed the settlement on behalf of the LLCs even though the AG's office said he’s not considered the face of Ft. George, could not immediately be reached for comment.

But the lawyer for the housing cooperative, Ronald B. Kremnitzer, said his clients are satisfied with the outcome. He declined to discuss what the group's next step would be.

The 44-unit apartment building was originally a residential building before it was converted to a cooperative in 1987 under the Martin Act, which grants the building benefits in the form of tax abatements, DHCR says. 

Shortly after the conversion, the AG's office said the original developers stopped selling shares to homebuyers, and instead repurchased the shares and rented those out at market rate.

Tenants, including Juan Rosa, say the co-op also hiked rent prices on homebuyers at an alarming rate.

Rosa and his family moved into the apartment building in 1992, when the building was owned by Fort Holding Corp., Uptown Management, Inc. and several other shareholders.

He said the co-op often raised a one year lease by $200 a month and a two-year lease by $600 per month. Other times the co-op left them without paperwork entirely, he said.

"There were times we wouldn't get a lease," he said.

When Rosa brought the case to the attention of DHCR the first time, officials there told him they had no control over co-op rentals, he said.

“They told us the rent could be raised for as high as they want because we were a co-op building,” he said.

Rosa says that when Fort George Apartment Corporation and its shareholders took over the property in 2014, they attempted to raise the rents even more.

It was then that he gathered all the tenants and their documents, and approached DHCR again, as well as the Attorney’s General office. 

“We basically attacked the notion that we were a co-op," Rosa said, "and this time they decided to look at it.”

Rosa said he and his fellow tenants are pleased with the outcome.

“We feel relief,” Rosa said. “Relief to know that NYC laws protects the little man.” 

The DHCR and the Governor's Tenant Protection Unit urges tenants who have been subjected to overcharges or harrassment to contact the Office of Rent Administration at 718-739-6400.