FILED: NEW YORK COUNTY CLERK 02/27/ :43 PM INDEX NO /2017 NYSCEF DOC. NO. 28 RECEIVED NYSCEF: 02/27/2018
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1 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK x "â - â - â â " â â In the Matter of the Application of LMJ Realty LLC, Petitioner, STIPULATION For a Judgment Under Article 78 of the Civil Practice Law SETTLEMENT OF and Rules -against- Index No /2017 The City of New York, Department of Housing Preservation and Development, Respondents x WHEREAS, this proceeding was commenced against Respondents the City of New York and the New York City Department of Housing Preservation and Development ("HPD"), by Notice of Petition, dated December 30, 2016, seeking an order annulling and vacating HPD's determination to revoke the partial exemption from real property taxes pursuant to Section 421-a of the Real Property Tax Law ("421-a tax benefits") for the properties located at 17 Bay 31st Street (Block: 6382, Lot: 34) and 21 Bay 31st Street, Brooklyn, New York (Block: 6382, Lot: 32) ("subject properties") pursuant to Article 78 of the New York Civil Practice Law and Rules; and WHEREAS, Petitioner's 421-a tax benefits began in the 2004/2005 tax year; and WHEREAS, Petitioner is the owner of the subject properties and uses the subject properties as rental units; and WHEREAS, in September 2016, HPD notified the New York City Department of Finance ("DOF") to retroactively revoke Petitioner's 421-a tax benefits; and 1 of 12
2 WHEREAS, on October 27, 2016, DOF retroactively revoked Petitioner's 421-a tax benefits and billed Petitioner $198, that Petitioner had received in 421-a tax benefits; and WHEREAS, as of January 3, 2018, Petitioner has paid $7, to DOF as a result of DOF's revocation of Petitioner's 421-a tax benefits; and WHEREAS, the parties in the above-captioned proceeding now wish to resolve this matter without further proceedings and without admitting any fault or liability; IT IS HEREBY STIPULATED AND AGREED by and between the attorneys for Petitioner and the attorney for Respondents, as follows: 1. The above-referenced proceeding is hereby dismissed, with prejudice, and without costs, expenses, or fees to either party. 2. The parties acknowledge and agree that: (i) Petitioner has paid $7, to DOF as a result of the 421-a tax benefits revocation; (ii) DOF will retain ten percent (10%) ($19,852.04) of the total 421-a tax benefits amount DOF billed Petitioner as a result of the revocation of Petitioner's 421-a tax benefits and (iii) Petitioner shall pay $12, (" Payment" ("Settlement Payment") within fourteen (14) days of the execution of this Stipulation by mailing a check to Respondents' attorney, Elizabeth J. Kim at 100 Church Street, 5th Floor, New York, New York Petitioner's 421-a tax benefits will be retroactively reinstated as set forth in paragraph 8 herein provided that, among other things, HPD issues a Real Property Tax Law ("RPTL") 421-a Final Certificate of Eligibility ("FCE") for the subject properties as rental projects upon Petitioner's compliance with the terms of this Stipulation on or before a date six Date" months from the date of execution of this Stipulation ("FCE Due Date"). The procedures that -2-2 of 12
3 must be followed in order for HPD to determine if an FCE can be issued are set forth in paragraphs 4 through 8 herein. 4. Within fourteen (14) days of the execution of this Stipulation, Petitioner shall submit to HPD the following documentation, which is required in order to approve an initial aggregate rent roll for each of the subject properties: (a) (i) An Annual Maintenance and Operating (M&O) Expenses Sheet indicating actual initial M&O costs, or, if the actual initial M&O costs are not available, (ii) submit the 421-a Rent Calculator per the HPD FAQ1 using the HPD allowed calculator guide M&O costs in lieu of the M&O Expenses Sheet; (b) (i) A sworn statement, from a Certified Public Accountant ("CPA") of the actual total development costs of the building through the completion of construction ("TDC"), or, if the TDC is unavailable, (ii) submit the 421-a Rent Calculator per the HPD FAQ using the same acquisition/purchase price and estimated TDC claimed for the project's 421-a Preliminary Certificate of Eligibility; (c) (i) An owner's affidavit with a "Tenant Roster" listing each apartment for each year since the building completed construction that has: the apartment number, tenant name (indicate VACANT if not occupied), actual rent charged, lease term and whether the tenant was provided with a rent stabilized lease, or, if such information is unavailable, (ii) submit an Roster" owner's affidavit with a "Tenant per the HPD FAQ beginning with the earliest year for which Petitioner is able to obtain relevant records or information (including partial records); (d) Schedule of Initial Rents; and (e) 421-a Rent Calculator. HPD reserves the right to request additional documentation and information required by HPD to comply with RPTL 421a or other applicable City of New York Administrative Code I A copy of the HPD FAQ referenced herein is annexed hereto as Exhibit "A." -3-3 of 12
4 (" Code" ("Administrative Code") or Rules of the City of New York ("RCNY") provisions, if necessary, (" Checklist" in writing through its application checklist process ("Checklist"). If a Checklist is issued, the (" Date" Checklist will be dated ("Checklist Date"). However, any Checklist will not alter any of the deadlines provided in this Stipulation. Upon HPD's determination that the completed and (" necessary documents have been submitted ("Completed Rent Documentation Submission Determination" Determination"), HPD will approve an initial aggregate rent roll for the subject properties Rents" ("HPD-Approved Rents") within a reasonable amount of time, but not to exceed forty-five (45) days from the date of the Completed Rent Documentation Submission Determination. 5. Petitioner must register all rental units at the subject properties with the New York State Division of Housing Community and Renewal ("DHCR") for all of the years 2i) and Building Services Registration Form (Form RR-3i); and (ii) registering the remaining outstanding annual rent registrations on DHCR's online Owner Rent Regulation Application System. For both Initial Registrations and Annual Registrations, Petitioner must register with DHCR the lower of (a) rents that are equal to or less than the HPD-Approved Rents, or (b) the actual rents charged to tenants for each of the years since the projects' completion. DHCR instructions for initial registrations of dwelling units that are either owner-occupied, Registration-Instructions-421a-Buildings.pdf. 6. Within fifty (50) days of receiving HPD-Approved Rents, Petitioner shall submit to HPD (i) a copy of the Registration Rent Roll Report for each year registered, the Initial Registration Summary, the Initial Building Services Registration, the Initial Apartment Registration and any other DHCR form that DHCR may require that states the length of the rent since completion of construction by (i) completing an Initial Registration Summary (Form RR- employeeoccupied or vacant are available at the following link: of 12
5 stabilization period for the subject properties as provided in this Stipulation; and (ii) a completed application for a FCE for the subject properties as rental projects and any other documents or information required by HPD to comply with RPTL 421a or other applicable Administrative Code or RCNY provisions for the issuance of an FCE. 7. Following Petitioner's submission to HPD referenced in paragraph 6 above, if HPD determines that Petitioner failed to submit all of the required documentation or any additional documentation is needed, then HPD will notify Petitioner in a Checklist with a Checklist Date. However, any Checklist will not alter any of the deadlines provided in the Stipulation. Upon HPD's determination that all of the necessary and completed documents have (" Determination" been submitted ("Completed FCE Application Submission Determination"), HPD will render a determination as to the issuance of an FCE within a reasonable amount of time, but not to exceed thirty (30) days from the date of the Completed FCE Application Submission Determination. 8. No later than thirty (30) days prior to the FCE Due Date, Petitioner may Request" request from HPD an extension of the FCE Due Date (the "Extension Request"), except that if HPD issues a Checklist less than thirty days before the FCE Due Date, Petitioner may submit an Extension Request within ten (10) business days from the Checklist's Checklist Date. The Extension Request shall set forth: (i) all outstanding information requests made by HPD to Petitioner; (ii) the time period in which Petitioner will satisfy these requests; (iii) a proposed extended FCE Due Date; and (iv) any other information pertinent to the Extension Request. Within a reasonable period and in no event later than the FCE Due Date, HPD will in its discretion approve or deny the Extension Request. HPD's approval of the Extension Request shall not be unreasonably withheld, conditioned or delayed of 12
6 9. Upon HPD's confirmation that Petitioner has properly registered all rental units at the subject properties with DHCR for all of the years since completion of construction, that HPD has approved the issuance of an FCE for the subject properties as rental projects on or before a date six months from the date of execution of this Stipulation, or, if an Extension Request is approved, the deadline established in such approved Extension Request, and that Petitioner has paid all applicable statutory filing fees associated with obtaining an FCE ("FCE Confirmation" Issuance Confirmation") and that that the Settlement Payment has been made in accordance with paragraph 2 herein and that the check has cleared, the 421-a tax benefit shall be retroactively reinstated for the subject properties, subject to the terms and conditions of the FCE issued by HPD for the subject properties and the provisions of Section 421-a of the RPTL existing as of the tax benefit start date (and other applicable law and rules), within forty-five (45) days of the FCE (" Issuance Confirmation ("Reinstatement Date" Date"). 10. By no later than the Reinstatement Date, the DOF shall remove from the subject properties' record all charges, taxes, late fees, penalties, and accrued interest imposed on the subject properties as a result of the revocation of the tax exemption, except for the Settlement Payment referenced in paragraph 2 above. 11. Should an FCE not be issued for the subject properties according to the terms of this Stipulation, DOF shall credit the Settlement Payment, referenced in paragraph 2 above, towards the subject properties' charges, taxes, late fees, penalties, or accrued interest imposed on the subject properties as a result of the revocation of the 421-a tax benefits on October 27, During the time period between the date that this Stipulation is fully executed and the FCE Due Date, or as extended pursuant to paragraph 8 herein, HPD and the -6-6 of 12
7 City of New York will continue to issue real property tax bills for the subject property and will impose interest on any unpaid bills. However, as between the date that this Stipulation is fully executed and the FCE Due Date, HPD and the City of New York agree that they will take no other action to collect the subject property's real property tax bill due on January 1, 2018 and April 1, 2018 to the extent that those bills exceed the amount that would be due if the 421-a tax benefit on the subject property was reinstated. The parties acknowledge that the petitioner will, nevertheless, be making estimated payments towards the non-421-a benefit components of the taxes owed on the subject property. To the extent that petitioner overpays in such estimated payments, such overpayment will be credited towards future taxes owed for the subject property. Notwithstanding the forgoing sentence, in the event that HPD has not approved the issuance of an FCE for the subject property as a rental project on or before the FCE Due Date or as extended pursuant to paragraph 8 herein, Petitioner agrees that it will remain liable for the entire amount of these two tax bills, including any interest that has accrued, and that HPD and the City of New York may take any legal action to collect any unpaid real property tax bills. 13. Except to the extent set forth herein, this Stipulation shall in no way limit or diminish any rights or remedies which the City of New York may possess with respect to occurrences or conditions which may arise after execution of this Stipulation. 14. For the duration of the rent stabilization period as provided in this Stipulation, Petitioner shall provide a copy of this Stipulation to each tenant residing at the subject properties, and thereafter shall provide an affidavit of service to that effect to Louise Carroll, Associate Commissioner of Housing Incentives at HPD, 100 Gold Street, New York, NY Petitioner may comply with the prior sentence of this paragraph by providing a -7-7 of 12
8 written notice to each tenant residing at the subject properties provided that the notice reflects the material terms of this Stipulation and is approved by HPD. 15. Within fourteen (14) days of the execution of this Stipulation, Petitioner shall file and record, or cause to be filed and recorded, a copy of this Stipulation with the New Office" York City Office of the City Register ("Register's Office") and shall cause the Register's Office to index the Stipulation against the subject properties. Promptly upon recordation hereof Petitioner shall deliver a true and complete copy of this Stipulation bearing the recording information and certified by the Register's Office to Louise Carroll, Associate Commissioner of Housing Incentives at HPD, 100 Gold Street, New York, NY If Petitioner fails to record this Stipulation and/or deliver copies thereof to HPD as required, HPD may record this Stipulation, at the sole cost and expense of Petitioner and all recording fees and other fees, costs and expenses including, without limitation, any and all expenses for the purchase of a reasonable number of certified copies of the recorded Stipulation shall be immediately paid by Petitioner to HPD. 16. Petitioner for itself and on behalf of its successors, heirs, assigns, legal representatives, lessees and transferees, including, without limitation, any owners and/or users of the subject property agrees that the subject properties shall be hereinafter held, sold, transferred, conveyed and occupied subject to the obligations and agreements set forth in this Stipulation which shall run with the subject properties and shall be binding upon Petitioner and its successors, heirs, assigns, legal representatives, lessees and transferees, including, without limitation, any owners and/a users of the subject properties. 17. Notwithstanding any other provision of the 421-a law applicable to the rent stabilization period that a 421-a rental unit must remain rent stabilized, Petitioner shall -8-8 of 12
9 comply with the Rent Stabilization Law and each unit in the subject properties will remain rent stabilized for fifteen (15) years from the date of this Stipulation. Petitioner also agrees to complete and submit any DHCR form that DHCR may require that relates to the length of the rent stabilization period as provided in this Stipulation for the subject properties as part of their rent registration with DHCR. 18. Nothing contained herein shall be deemed to be an admission by any of the parties herein of any wrongdoing. The parties, for themselves and their officers, employees, agents or representatives further disclaim that they have in any manner or way acted inconsistently with the requirements of state of federal law or that any action undertaken by any of them is preempted by state of federal law. 19. Nothing contained herein shall be deemed to constitute a policy or practice of the City of New York. 20. This Stipulation and the rights and obligations of the parties hereto shall be governed by and construed and enforced in accordance with the substantive laws of the State of New York. The parties represent that they have each consulted with and have been advised by counsel of their own choosing in connection with this lawsuit and this Stipulation. The parties further acknowledge that each party and its counsel have reviewed, negotiated and revised this Stipulation, and that the language in all parts of this Stipulation shall be construed, in all cases, according to its fair meaning, and that any rule of construction to the effect that any ambiguities are to be resolved against the drafting party is inappropriate and shall not be employed in the interpretation of this Stipulation. 21. Any disputes relating to this Stipulation shall be resolved in accordance with this paragraph. First, counsel for each party shall notify counsel for the other party in -9-9 of 12
10 writing of any perceived non-compliance by either party. Second, unless otherwise agreed to by the parties, with respect to any particular dispute, the parties agree to meet and confer in good faith, within fourteen (14) days after a written notification of a dispute is raised by any of the parties to discuss and try to resolve such dispute without the assistance of the Court. Third, if the parties are unable resolve the dispute, any party may, within forty-five (45) days of the final meet and confer, seek relief from this Court on the dispute, which shall retain jurisdiction for all purposes. 22. The Stipulation, including any exhibits referred to herein, sets forth the entire agreement and understanding among the parties with respect to the subject matter hereof, shall inure to the benefit of the parties and their respective successors and assigns, and merges and supersedes all such prior discussions, agreements and understandings among the parties of 12
11 23. The Stipulation may be executed in counterparts. Facsimile copies of signatures shall be deemed originals. Dated: New York, New York February 2, I. -lri '-- ROSENBERG & ESTIS. P.C. ZAC A Y W. CA. Attorneys for Petitioner Corporation Counsel of the City of New York By: BRETT B. THEIS Attorney for Respondent 733 Third Avenue By: ELIZABETH J. KIM New York, NY Assistant Corporation Counsel Tel: (212) Church Street (Admin. Law Division) New York, NY Tel: (212) Fax: (212) 'III tq / LMJ Realty LLQ Petitioner By: LYNN MOLFETTA 4718 Avenue N. Brooklyn, NY For internal use only - I I- 11 of 12
12 Index No.: /2017 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK In the Matter of the Application of LMJ Realty LLC, Petitioner, For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules, -against- THE CITY OF NEW YORK, DEPARTMENT OF HOUSING PRESERVATION & DEVELOPMENT, Respondents. STIPULATION OF SETTLEMENT ZACHARY W. CARTER Corporation Counsel of the City of New York Attorney for Respondents 100 Church Street New York, N.Y Elizabeth J. Kim Assistant Corporation Counsel Tel: (212) of 12
FILED: NEW YORK COUNTY CLERK 12/30/ :48 PM INDEX NO /2017 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 12/30/2016
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