A coalition of five elected officials representing Lower Manhattan is urging the Battery Park City Authority (BPCA) and the landlord at Gateway Plaza to strike a deal preserving affordability at the community’s largest resident complex.
In a July letter addressed both to BPCA president Benjamin Jones and Richard LeFrak, the chairman and chief executive officer of the LeFrak Organization(which acts as Gateway Plaza’s landlord), U.S. Congressman Jerry Nadler, State Senator Brian Kavanagh, State Assembly member Yuh-Line Niou, Manhattan Borough President Gale Brewer, and City Council member Margaret Chin, “urge a prompt conclusion to the negotiations, and that you finalize a deal that renews and strengthens the existing agreement.”
The letter goes on to observes that, “since 1987, rent stabilization agreements for Gateway Plaza have helped Battery Park City grow into a dynamic community where middle-class families can lay down roots and thrive. As rents in lower Manhattan have climbed to levels that most New Yorkers cannot afford, the rent stabilization agreement at Gateway Plaza has become increasingly important in ensuring that residents are not displaced and the community remains stable and economically diverse.”
The elected officials also note that Gateway rents (in apartments not protected by the current rent-stabilization agreement, which was enacted in 2009 and is set to expire next June) are being marketed at higher prices than those prevailing in the surrounding area. “According to the latest available data from the NYU Furman Center,” the letter says, “the 2017 median rent for studios and one-bedroom units within the community district is $2,595 a month. Meanwhile, Gateway Plaza’s market-rate units are listed online for over $4,000 a month for a one-bedroom unit and over $6,000 for a two-bedroom unit.”
The elected officials go on to echo a call by the Gateway Plaza Tenants Association (GPTA) for the current affordability agreement (which now protects only about one-third of the households within the complex) not only to be extended, but also expanded: “We strongly believe any new agreement should extend to all Gateway Plaza residents, not just those still covered under the 2009 agreement.”
The BPCA’s negotiations with the LeFrak Organization are made possible by the fact that the landlord is itself a tenant, leasing the ground on which the buildings sit, in exchange for annual rent payments to the Authority, which owns the land. This enables the BPCA to offer LeFrak concessions on its ground rent payments, in exchange for agreeing to affordability protections for tenants.
As GPTA board member Jeff Galloway explained at a July meeting of Community Board 1 (CB1), “Gateway Plaza is uniquely situated in that it is governed by a private agreement that provides rent stabilization benefits to its residents.” This circumstance arises from that fact that, “Gateway Plaza was financed with taxpayer subsidies,” when it was built in the late 1970s and early 1980s, he recounted. This financing, in turn, required that the landlord offer affordability protections to residents. “The tenants sued to enforce those protections in the 1980s,” he recalled, which led to the first in a series of legal agreements that limits rent increases at Gateway.
“But those agreements had sunset clauses,” Mr. Galloway continued, “and this one ends in June, 2020. We have support from all of our local elected officials for extending it to at least 2040, and expanding it to all residents.”
At that July meeting, CB1 voted to ratify a resolution that urges the Battery Park City Authority (BPCA), “to set a high priority on preserving the affordability status of Gateway Plaza for a period coextensive with the benefits that [the landlord] may obtain in modification of its ground lease, and in any event ending no sooner than June 30, 2040 (the current end date of the Gateway ground lease) and returning the scope of the Stabilization Agreement to its original coverage of all tenants of Gateway.”