By Julie Shapiro
TRIBECA — Independence Plaza North was rightly taken out of the rent-stabilized apartment pool, a federal court has ruled.
The decision is the latest wrinkle in a longstanding legal battle between Laurence Gluck, landlord of the 1,331-unit TriBeCa complex and the federal government who sued him claiming he wrongly deregulated the complex while collecting millions of dollars in subsidies.
The federal government had gone after Gluck for potentially overcharging the government by accepting millions of dollars in Section 8 federal funds as if he were renting market-rate units while still technically overseeing a rent-stabilized building.
Under the federal government's Section 8 voucher program, Gluck was able to collect full market rent for hundreds of apartments at IPN, even though the tenants living there could only pay a fraction of the cost.
If the apartments were supposed to be rent-stabilized, as US Attorney Preet Bharara argued, then the federal government has been overpaying Gluck for the vouchers, to the tune of tens of millions of dollars.
But Judge Shira Scheindlin ruled last week that Gluck was correct in removing Independence Plaza from rent-stabilization, which means Gluck does not owe the federal government any money. The decision was first reported by Crain's New York Business.
Bharara's office declined to comment. Stephen Meister, Gluck's lawyer, called the decision "well reasoned and correct."
Separately, Independence Plaza's tenants have been arguing for years that the building ought to be rent-stabilized, and last year they won a state court decision in their favor. Gluck has said he plans to appeal that ruling.
It is unclear how the new federal court decision will affect Independence Plaza's tenants. Both decisions will likely face appeals, Crain's reported.