Portion of MCI Costs Paid by Co-op Sponsor Disallowed from Rent Hikes

(Decision submitted by David Hershey-Webb of the Manhattan law firm of Himmelstein, McConell, Gribben, Donoghue & Joseph, LLP, attorneys for the tenants.)

Landlord applied for MCI rent hikes based on facade work. The DRA ruled for landlord in part, granting MCI rent increases for work costing over $5 million, while disallowing building entrance work. Landlord and tenants appealed. The DHCR ruled against landlord and ruled for tenants in part. Tenants sought reduction of approved architect fees. The DHCR agreed that a portion of the architect fees were for work that was unrelated to the MCI and therefore disallowed 35 percent of the architect fees. Landlord objected to the DRA's deduction of a $2.4 million settlement payment to the landlord cooperative corporation by the co-op sponsor for the MCI costs. But the sponsor agreed to pay that amount toward the facade work that the MCI increases were granted for. This portion of the MCI cost therefore shouldn't be passed along to tenants. 

Tristram/3333 Stabilized Tenants Assoc.: DHCR Adm. Rev. Docket Nos. BS610052RO, BS610043RT (6/14/18) [4-pg. doc.]