March 2, 2012, New York: Asian Americans for Equality (AAFE) and the 289 Grand Street Tenants Association held a press conference to announce a major court decision that is a victory for all rent-regulated tenants across New York City. AAFE and the 289 Grand Street Tenants Association applaud the Court’s decision. In a strong decision, the Honorable Timmie Erin Elsner, J.H.C. ordered the landlord to restore all apartments to habitable condition no later than March 1, 2013, and that the work should commence forthwith.
On April 12, 2010, 289 Grand Street suffered fire and water damage as a result of one of the worst fires in Chinatown’s history. The fire left 200 people homeless, injured 33 people, and left dead a 87-year-old man. For almost two years, the 289 Grand Street Tenants Association, with the assistance of AAFE, have been fighting for their right to return to the property and have the landlord restore the building. The landlord (Wong’s Grand Realty Corp.) argued that the repairs and renovation would be too expensive, thus requiring the building to be demolished, which would mean the permanent displacement of the tenants.
Highlights from the decision include:
1. The landlord could not prove that the building was worth $3,500,000.
“The respondents failed to offer any proof of the anticipated market value of the premises upon restoration to habitable condition. Absent such evidence, this court is unable to determine whether the cost to restore the building and remove the violations would constitute an unconstitutional taking of the owner’s property. …In that instance, the court found that they had not sustained the burden of proof required to show that the cost of the repairs would constitute an unconstitutional taking of their property. Based upon Scharf, respondents’ failure to show the value of the premises if restored, is fatal to their defense.” (pg.13)
“Respondents’ witnesses estimated that pre-fire value of the premises at $3,500,000 utilizing a ‘comparable sales approach.’ Unfortunately, these witnesses had no personal knowledge relating to the conditions and configuration of the buildings used in comparison with the premises. These details were gleaned from a competing broker and were, at best, hearsay.” (pg. 14)
2. The landlord could not prove its allegation that the total cost of rehabilitating the premises would exceed $7,000,000.
“In support of their defense, respondents presented testimony from Mr. Zimmerman, a licensed architect. At the outset, Mr. Zimmerman admitted that he has no current specialized expertise or experience repairing and renovating damaged properties. Moreover, he admitted that other than inspecting the roof and the apartments on the upper floors of the premises, he failed to inspect the units in the lower floors.” (pg.16)
“Respondents called Mr. Santoro, a construction consultant, who submitted a document entitled ‘Schematic Development,’ dated December 9, 2010, which assesses the cost of the items listed in the Zimmerman scope of work. Mr. Santoro estimated the cost of restoration of the premises at $7,360,000. An analysis of the schematic development reveals an unreasonable determination as to the cost of many items.” (pg. 17)
3. The Court found it was reasonable to rehabilitate the building for $2,300,000.
“Petitioners called Christopher Leahy, an officer with Major Renovation Management Company. Mr. Leahy specializes in renovating older and damaged buildings for private owners and HPD. His estimated costs were considerably less than those presented by respondents’ expert. Mr. Leahy testified that he would be willing to enter into a contract with respondents to renovate the building and correct the conditions therein for $1,930,000.” (pg.18)
“On the other hand, the costs set forth by Mr. Leahy on petitioners’ behalf appear to be some what discounted given the scope of work and the serious nature of the violations. Upon review of the testimony and evidence, the court finds that the reasonable and foreseeable costs for restoring the premises to be approximately $2,300,000.” (pg.18)
The Court ruling specifically cited that “this court concludes that respondents failed to sustain the affirmative defense of economic infeasibility.” (pg.19) “The respondents provided no evidence of the post restoration value of the premises. Moreover, respondents’ utilization of the pre-fire valuation of the premises was flawed and unreliable. Based upon the foregoing, the court issues a final judgment against respondents and in favor of petitioners on claims relating to the correction of conditions in the premises and in favor of HPD on its cross-claims.” (pg.19)
“I am so happy with today’s decision because the tenants at 289 Grand Street deserve justice. This victory would not have been possible had it not been for the tremendous leadership of Assembly Speaker Sheldon Silver, State Senator Daniel Squadron, NYC Councilmember Margaret Chin, Borough President Scott Stringer, and the NYC Department of Housing Preservation and Development,” said Christopher Kui, Executive Director of Asian Americans for Equality. “This ruling is a victory for all rent-regulated tenants across the City. We have been working alongside with the tenants and believe this ruling serves as a warning to landlords who attempt to avoid their duty to maintain affordable housing in habitable conditions. Advocates can use this ruling as a tool against predatory landlords, who through neglect, are intentionally destroying the already shrinking stock of rent-regulated units in New York.”
Assembly Speaker Sheldon Silver added, “From the moment this tragic fire struck almost two years ago, we have been fighting tirelessly for the right of the tenants who were displaced from 289 Grand Street to return to their homes. They have suffered enormously and they have waited long enough. Today is a great victory for them and for everyone who has consistently fought for the protection and preservation of affordable housing here in Chinatown and throughout our city.”
“I am happy to stand here today to announce a judgment in favor of the residents of 289 Grand,” said Council Member Margaret Chin. “Only 4 months into my term, I was standing in front of the smoking ruins caused by this massive fire. This is a strong, smart judgment and we stand ready to back it up by whatever means necessary. I want to thank Chris Kui, AAFE and HPD for all their hard work and years of commitment to this case. My hope is that on the site of this terrible tragedy a building will rise that is testament to the resilience and strength of the Chinatown community.”
Press conference participants included: Christopher Kui, Asian Americans for Equality (AAFE); John Gorman, Attorney; 289 Grand Street Tenants Association; State Assembly Speaker Sheldon Silver; State Senator Daniel Squadron; New York City Councilmember Margaret Chin; and Vito Mustaciuolo & Mark Roeder, NYC Housing Preservation and Development.