Courts roundup: Stuy-Town tenants sue DHCR over MCIs; lender sues over $7.5M loan

Courts roundup for Tuesday, April 27, 2021: No bankruptcies of interest and three very small commercial foreclosures totaling $1.3 million.

Court filings are the positions of one party and are not necessarily accurate or complete.

Stuy-Town tenants sue DHCR over MCIs: The Stuyvesant Town-Peter Cooper Village Tenants Association sued to reverse a ruling from the State DHCR that granted 19 major capital improvement increases of $1.10 per room to $8.57 per room, worth millions to the landlord Blackstone Group. The tenants make several arguments in the filing, including claiming that the MCIs for tuckpointing in response to Local Law 11 requirements are not a “capital improvement,” but instead a repair process and so not allowable under MCI rules. The complaint says, “In the February 26, 2021 Orders Under Review, the Commissioner denied each of the Tenants’ [requests for review] and affirmed the various rent increases under each individual Docket Number for the subject buildings.” It continued, “The Rent Administrator granted the nineteen (19) MCIs ranging from $56,000 to $494,000, with $1.10 to $8.57 per room, per month rent increases. On a complex-wide MCI, for example, assuming each building has 310 rooms, the total room count for the Apartment Complex would be 34,100 rooms. A rent increase of $1.80 per room, per month, would be $613,800, or $7,365,600 per year, and multiplied by 30 years, a total of $220,968,00.” LINK

Lender sues over $7.5M Greenpoint loan: The special servicer for mortgage-backed securities bondholders alleges Shimshon Mandel’s $7.5 million loan on a five-story multi-family residential apartment building with 10 units at 299 McGuinness Boulevard in Greenpoint, is in default and now due. The special servicer alleges the owner has not provided requested financial records so the lender is seeking the appointment of a receiver and may in the future seek to foreclose. “Key Bank, as special servicer of the loan, has made over ten (10) unsuccessful attempts to contact Mandel over the course of five (5) months to discuss the loan defaults and to request financial reports and information related to the Mortgaged Property… By letter dated March 1, 2021, Plaintiff advised Defendant that Defendant was in default under the Loan Documents for failure to make its required monthly payments and all sums owed under the Loan Documents were being accelerated.” The suit was filed by Gregory Mascitti of McCarter & English. LINK