The Path of Lease Resistance
CB1 Joins Elected Officials in Calling for Renewed Stabilization at Gateway
Community Board 1 (CB1) has endorsed the call by the Gateway Plaza Tenants’ Association (GPTA) to renew the rent stabilization program at Battery Park City’s largest residential complex.
At the CB1’S July 30 meeting, GPTA board member Jeff Galloway explained that, “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.”
“If the current agreement expires next June,” he predicted, “roughly one-third of residents will have to leave within a year. Many of them have lived there for decades. And having stabilization in Gateway Plaza affects the character of the entire neighborhood. It contributes to the community as a whole, over time. But if you have massive turnover, that hurts the community.”
Mr. Galloway, along with more than a dozen Gateway residents who rose to speak with him, then called upon CB1 to enact a resolution adding its voice to that coalition.
Later at the July 30 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.”
This language was a reference to the fact that Gateway’s landlord is itself a tenant of the BPCA, paying annual ground rent for the leased land occupied by the buildings. The landlord is expected to derive lucrative concessions on these payments in exchange for extending or expanding affordability protections to tenants.
The same passage, along with Mr. Galloway’s mention of one-third of residents facing the prospect of losing their homes, additionally refers to the fact that previous affordability agreements at Gateway protected all residents, but the most recent version benefits only those who lived in the complex on the day it went into effect, in 2009. In the years since, turnover and attrition have resulted in roughly two-thirds being deprived of any affordability protections whatsoever.
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