Appeal to RuthAnne Visnauskas

Manhattan Park Tenants Ask HCR Commissioner To Help in Sub Metering Dispute with RIOC

Updated 2 weeks ago David Stone
Manhattan Park Tenants Ask HCR Commissioner To Help in Sub Metering Dispute with RIOC

Manhattan Park residents, frustrated after struggling to get RIOC to take appropriate steps in response to the landlord's failure to live up to terms of its ground lease designed to protect tenants from sub metering abuse, has asked Division of Housing and Community Renewal Commissioner RuthAnne Visnauskas to intervene. Here is the text of their letter:

November 6, 2017 

RuthAnne Visnauskas, Commissioner
New York State Division of Housing and Community Renewal
25 Beaver St
New York, NY 10004

RE: Roosevelt Island Operating Corporation — Sub Metering at Manhattan Park


Dear Commissioner Visnauskas:


I am writing on behalf of a group of current and former residents of Manhattan Park, a Roosevelt Island rental complex owned by Grenadier Realty and operating under the terms of a ground lease with the Roosevelt Island Operating Corporation.

It’s necessary that we ask for your intervention because efforts to work with RIOC on issues detrimental to tenants and involving violations of lease terms set up to govern sub metering have been unsuccessful over a multi-year period.

Our experience has been that RIOC will not enforce terms of its own ground lease, intended to protect tenants from sub metering abuse, with Grenadier/Manhattan Park.

History

In 1986, Grenadier sought approval for sub metering in Manhattan Park, then under construction. Sub metering was newly available in New York with officials cautious because of the history of sub metering abuses by landlords.

The Public Service Commission agreed to allow sub metering but only under strict terms to be incorporated in Grenadier’s ground lease with RIOC. They are specifically…

Section 23.07. Charges for Electricity. In the event that Tenant seeks to charge Subtenants for electricity Tenant shall

(a) Prior to billing any Subtenants therefor, have established a grievance procedure that is either
(i) approved and administered by the New York State Public Services Commission, or
(ii) approved by Landlord and if there is a failure to approve Tenant may seek arbitration in accordance with Article 35.

(b) Not make any profit from such charges.

(c) Charge Subtenants of Market Rate Rental Units or any Subtenants of non-residential space for actual usage determined by submetering and actual billing charges received by Tenant, plus an allocated portion of Tenant's administrative charge for meter reading and billing permitted by the New York State Public Services Commission, and for no other charges.

But it took until 1989 before an acceptable grievance procedure was finally approved by PSC.

It has three key elements: 1) Any complaint about electrical sub metered billing must be answered by Manhattan Park, in writing and in detail, about how the bill was calculated; 2) the tenant has rights to immediate appeal to the Property Manager; and 3) the dispute, if not settled at step 2, is submitted to a disinterested third party arbitrator.

PSC was so insistent on this third point that the agency refused to act as arbitrator itself but took the trouble to recommend arbitrators that it believed would be fair to tenants.

It is our core contention that Grenadier/Manhattan Park never established that procedure or any other and that RIOC was negligent in never following through to ensure that tenant rights were protected.

Because we believe strongly that Grenadier/Manhattan Park is not and never has been in compliance with these terms, we sought a meeting with RIOC President Susan Rosenthal.

Our first meeting took place on July 18th, 2016, with Rosenthal and RIOC counsel Arthur Eliav in RIOC’s conference room.

Although I brought evidence of multiple violations to demonstrate the significance, I explained that our core concern was that Grenadier/Manhattan Park failed “to establish a grievance procedure” prior to sub metering.

That failure alone blunted any and all tenant efforts to seek resolution from Day One, overturning PSC’s clearly stated requirements. It also blocked the ability to obtain meaningful information in substantiating claims because Manhattan Park could simply refuse to provide vital information.

It’s of extreme importance that tenants were never informed of any grievance procedure or, in Rosenthal’s words, the one approved by PSC and RIOC was never “put into play.”

As a result, Grenadier/Manhattan Park inoculated itself against claims by independently controlling the processing and finalization of any grievance, which is far from what PSC required and both RIOC and Grenadier/Manhattan Park agreed to in the ground lease.

Rosenthal was relatively new at RIOC at the time of our first meeting, filling in as Acting President until an appointment was made by Governor Cuomo, but Eliav, who’d been employed at RIOC for years, expressed surprise at our complaint.

RIOC, Eliav explained, had never received any complaints about Manhattan Park’s sub metering in the past and, in fact, did not even have copy of any approved grievance procedure in its files.

Neither statement was true.

But not being aware of it yet, I agreed to proceed with specific steps recommended by Rosenthal to put Grenadier/Manhattan Park on the spot.

In short, at her direction, I asked them to show proof that they had 1) ever established a grievance procedure; 2) never made a profit and 3) that tenants were billed solely for their own “actual” electrical usage, all required in the ground lease.

While awaiting Grenadier/Manhattan Park’s answer, I got substantial information from an attorney that contradicted Eliav’s claims and showed that, just 2 1/2 years before, an effort had been launched to resolve what was strongly believed to be Grenadier/Manhattan Park profiteering on sub metering and that Eliav himself had been copied on much of the correspondence.

The attorney, Mark Lyon, also provided a copy of the approved grievance procedure obtained, through FOIL, from RIOC’s files.

Our strategy now, in Rosenthal’s words after a second meeting was “to see if they ever put it in play,” that is, established the grievance procedure as required “prior to” billing tenants from sub metering.

The Results to This Point

Challenged repeatedly and offered examples of how it could be done, Grenadier/Manhattan Park was never able to show that any tenant at any time had ever been told there was an approved grievance procedure let alone been allowed to use it. Indeed, they had difficulty even locating a copy. Even so, they insisted they had followed it strictly for 25 years.

We asked Grenadier/Manhattan Park to provide evidence that tenants were ever notified of the grievance procedure. They could not, and it was no surprise to those of us who’ve lived here for as much as 25 years and complained about electric bills numerous times without being told that one existed. Tenant leases going back at least 15 years do not mention the approved grievance procedure.

As an alternative, we asked Grenadier/Manhattan Park for evidence of a single time in which the grievance procedure was used by any tenant or tenants. They would not, insisting it would violate privacy rights, although names could easily have been redacted.

As a final option, we asked Grenadier/Manhattan Park to provide the name of any third party arbitrator who’d been brought in to resolve a single sub metering dispute. To this, they simply refused to reply.

Please consider that, had Grenadier/Manhattan Park been able to satisfy any one of these requests, our claim that they never established a grievance procedure would have been proved wrong.

Among our group are people who have lived in Manhattan Park for decades, and none were ever told of a grievance procedure or given a chance to use one. Our rights along with thousands of others over a quarter-century were denied without recourse due to Manhattan Park’s failure to enact any grievance procedure and RIOC’s negligence in not enforcing terms of its own lease.

What should concern your office and that of the Governor is that RIOC was kept fully informed throughout this exchange, completely aware that Grenadier/Manhattan Park failed to show compliance with the ground lease, but chose to do nothing.

Actually, what they did was worse than nothing.

Once Grenadier/Manhattan Park showed itself to be unable to prove it had ever established an approved grievance procedure, as required in the ground lease and by PSC, a curious event occurred.

To buttress their claims, Manhattan Park Property Manager Brian Weisberg suddenly introduced a HEFPA (Home Energy Fair Practices Act) notice that he’d personally dropped in front of all Manhattan Park doorways in 2013.

This, he claimed, included guidelines that Manhattan Park followed in addition to the grievance procedure with which the company still claimed to have been in compliance, although unable to supply any evidence to counter dozens of complaints showing otherwise.

Then, switching gears, Manhattan Park suddenly claimed, after weeks of interaction, that the HEFPA notice replaced the approved grievance procedure.

There is no evidence showing that PSC approved this action as in compliance, and it falls far short of what the agency demanded from the start.

And RIOC confirmed that they not only had not approved it but had never received any notice that Manhattan Park made such a move.

Shortly thereafter, the tables turned. RIOC was no longer our ally and drifted off into absurd rationalizations cooked up by Grenadier/Manhattan Park.

While Rosenthal contemporaneously informed our group that RIOC had met with Grenadier/Manhattan Park’s property managers, it wasn’t until last month that she revealed that RIOC had also consulted with “MP’s principals and legal counsel,” none of whom were identified.

After this consultation, Rosenthal abruptly reversed field and insisted that the HEFPA notice tossed into doorways, four years ago, met the criteria set in the ground lease for establishing a grievance procedure in 1989, apparently awarding it two decades of retroactivity.

Like Grenadier/Manhattan Park, RIOC now refused to address the two decades plus where no approved grievance procedure was in force. Efforts were made to push the problem off on the PSC, although the core issue is squarely with RIOC and its ground lease with Grenadier/Manhattan Park, specifically terms that were included to protect tenants but never did so.

In an email dated October 12th, this year, she repeated this ridiculous claim:

“The lease states that in the event that MP seeks to submeter electricity, it is required to establish a grievance procedure approved either by RIOC or the New York State Public Services Commission (PSC).  MP provided RIOC (and you) with a copy of the current PSC-approved grievance procedure, with a sworn affidavit stating that the said document was distributed to all MP tenants.”

This mistakes the requirements. Manhattan Park was required to establish a grievance procedure “prior to” sub metering, not twenty-five years later. Leaving notices in front of doorways, once in 25 years, hardly amounts to its being “distributed to all MP tenants.” It makes no reference to earlier tenants or others who’ve moved in and out since 2013.

Further, there is no evidence that PSC approved the HEFPA notice as a grievance procedure at any time, not matter what Rosenthal and Manhattan Park want everyone to believe. RIOC has already stated in an email that they not only didn’t approve it, they weren’t even aware of it until Grenadier/Manhattan Park came up out of the blue with their claim.

There’s an additional misstatement of fact in Rosenthal’s October 12th email worth noting: “We had offered to meet with you yet again, but the offer was declined,” she wrote.

That is not true. In fact, when we tried to reopen discussions last year, Rosenthal shot the effort down. Our complaints, she responded, were “conspiracy theories.”

We believe that there is no likelihood of making progress with RIOC with Rosenthal at the helm and that action must be taken on your part to intervene. There is a long history of unresolved sub metering complaints that were stonewalled or blown off by Manhattan Park because of negligence that RIOC has no intention of addressing.

RIOC’s refusal to act resulted in not only twenty-five years of sub metering complaints going unaddressed, but it also emboldened Grenadier/Manhattan Park to continue unrestrained.

For example, a tenant who prefers to remain unidentified for fear of Grenadier/Manhattan Park reprisals received average electrical sub metering bills for three months during which her family was absent. Appliances and heating/cooling units were unused during the period. After the tenants complaints to Manhattan Park’s management office went unanswered for a period of months, itself a violation of even the tepid requirements in the HEFPA notice, the tenant tracked down Property Manager Michael Kim in his office. He finally promised to look into the issue.

It should be of surprise to no one that neither Kim nor anyone else at Manhattan Park followed up.

This is just one of several recent examples we offered RIOC, but they remained unmoved.

Does anyone believe that this is meets lease terms demanded by PSC in 1986, in any way, shape or form? Or is it more like what you’d predict with a landlord aware that it can violate its ground lease obligations without consequence?

As RIOC has shown itself unable to deal on an equal footing with Grenadier/Manhattan Park or to protect tenants rights, we ask you to intervene and assure that tenants abused in the past are made whole and future violations are brought to a halt.

Thank you for you attention on behalf of current and former tenants at Grenadier/Manhattan Park.

Sincerely,


David Stone

ec:
Susan Rosenthal
Jacqueline Flug
RIOC Board Members
Hon. Rebecca Seawright, NYS Assembly
Hon. José Serrano Jr, NYS Senate
Attorney General, Eric Schneiderman
Governor Andrew Cuomo

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