Lester Complaint

At an IAS Part of the Supreme Court of the
State of New York, held in and for the

County of New York at the Courthouse
thereof located at 60 Centre Street, New
York, New York, on the day of March,
2009.
P R E S ENT:
HON:
Justice of the Supreme Court
SUPREME COURT OF THE STATE OF NEW YORK 0 9 103299

COUNTY OF NEW Y O N
--_-r___________________________1_1_11__-----------_____-----------
X
KENNETH M. CHANKO, BARBARA CHANKO, Index No.
TIMOTHY McCANN, on behalf of themselves and all
others similarly situated,
Petitioners,
ORDER TO SHOW CAUSE
-against-
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THE NEW YORK STATE DIVISION OF 02 "m

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HOUSING AND COMMUNITY RENEWAL, iR?C,@,,,>
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TISHMAN SPEYER PROPERTIESyL.P. and
PCV ST OWNER LP,
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Respondents. $y6,.,
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Upon the Verified Petition of Barbara Chad& ddiTQ&thy F. McCann,

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verified March 9, 2009; the exhibits annexed thereto; and the annexed Affirmation
of Jack L. Lester, Esq. dated March 9, 2009, the Affidavit of Barbara Chanko and
Timothy F. McCann,
Let the Respondents or their attorneys, show cause before this Court at an
Individual Assignment Part of this Court at the Courthouse located at 60
Centre Street, Room -7 New York, New York on the -day of March, 2009
Supreme Court Records OnLine Library - page 1 of 23

at 9:30 a.m. in the forenoon of that day or as soon thereafier as counsel can be
heard, why an order should not be entered herein:
1) Compelling compliance with the Rent Stabilization Code of New
York and mandating renewal leases to Petitioners;
2) Enjoining Respondent, New York State Division of Housing and
Community Renewal (“DHCR”) from administering, enforcing or in any manner
applying the provisions of the High Income Rent Deregulation Statute of the State
of New York, Section 2520.1 1 against Petitioners;
3) Issuing a Preliminary Injunction enjoining and restraining the
Respondents, Tishman Speyer Properties, L.P. and PCV ST Owner LP from
prosecuting any eviction proceedings to terminate Petitioners’ occupancy during
the pendency of this proceeding or the related proceeding, Roberts, et al. v.
Tishman Speyer Properties, L.P., Index No. 100956/07; and
4) Granting such other and further relief as the Court deems just and
proper including class certification for petitioners, legal fees and costs.
ORDERED that personal service of this order to show cause and the papers
upon which it is granted and the Verified Petition be made upon defendants or their
attorneys on or before be deemed sufficient service.
ENTER:
J.S.C.
2

I

Petitioners,
AFFIRMATION
-against-
THE NEW YORK STATE DIVISION OF

HOUSING AND COMMUNITY RENEWAL,
TISHMAN SPEYER PROPERTIES, L.P. and
PCV ST OWNER LP,
Respondents.
JACK L. LESTER, an attorney duly admitted to practice in the Courts of
this State, hereby affirms that:
1. I am counsel for the petitioners in this
2. I submit this affirmation in support of
Order staying respondents from taking any action
residency and/or occupancy rights of petitioners.
3. On March 5 , 2009, the Appellate Division, First Department
unanimously held that landlords may not decontrol or deregulate housing units if
they are subject to rent stabilization by virtue of New York City's J-51 tax

1 J.
abatement program (see Administrative Code Section 11-243). See Roberts, et al.
v. Tishman Speyer, L.P., et al., 2009 NY Slip Op 01595.
4. Petitioners all reside in units subject to rent stabilization by virtue of
respondents’ receipt of J-5 1 tax benefits.
5. Despite this unanimous determination of the Appellate Court,
petitioners face the imminent loss of their homes and/or deregulation by virtue of
orders issued by DHCR andlor the Housing Part of the Civil Court of the City of
New York, New York County.
6. Clearly based upon the Appellate Court’s determination as set forth
above, petitioners have established that they will successfully maintain the rent
stabilized status of their apartments.
7. Moreover, if petitioners are evicted during the pendency of further
appellate litigation, they will suffer irreparable harrn.
PETITIONERS A R E ENTITLED TO A PRELIMINARY INJUNCTION
8. Petitioners have successfully established the grounds necessary for the
granting of a preliminary injunction in this petition.
9. A party seeking a preliminary injunction must establish all of the
following: a likelihood of success on the merits, irreparable injury if the relief is
not granted, and a balancing of the equities in its favor. State of New York v. Fine,
72 N.Y.2d 967,968,969 (1988); Grant Co. v. Sroai, 52 N.Y2d 496,517 (1981);

-.
Hoppman v. Stein, 141 A.D.2d 332 (1st Dep’t 1988); Merrill Lynch v. Burr, 140
A.D.2d 589,592 (2dDept 1988).
10. Petitioner has met all the above requirements.
11. No prior application has been made for the relief set forth herein.
12. Petitioners’ counsel has notified Respondents of this proceeding,
however, a Temporary Restraining Order (“T.R.O.”) is not requested.
WHEREFORE, Petitioners respectfully pray that the relief requested in the
Order To Show Cause be granted.
Dated: New York, New York

March 10,2009

Petitioners,
VERIFIED PETITION
-against-

PCV ST OWNER LP,
Respondents.
Petitioners, KENNETH M. CHANKO, BARBARA CHANKO, TIMOTHY
McCANN and THE STUYVESANT TOW-PETER COOPER VILLAGE
TENANTS’ ASSOCIATION on behalf of themselves and all other similarly
situated (the “Class”), by their attorney JACK L. LESTER, ESQ., as and for their
Class Action Petition against Respondents THE NEW YORK STATE DIVISION
OF HOUSING AND COMMUNITY RENEWAL, TISHMAN SPEYER
PROPERTIES, L.P. and PCV ST OWNER LP, set forth and allege as follows:
Preliminary Statement
1. This is a class action lawsuit brought on behalf of hundreds of current
Stuyvesant Town and Peter Cooper Village rent stabilized tenants wrongfully

L
being evicted or denied renewal leases due to pending proceedings pursuant to the
High Income Rent Deregulation Statute of the State of New York.
2. Pursuant to the Rent Stabilization Code ((‘RSC”) Section 2520.1 1, an
Owner may deregulate an apartment if:
(a) the housing accommodation is subject to the Rent Stabilization
Law of 1969 andor the Emergency Tenant Protection Act of 1974 (the “Rent
Stabi1ization Law”) ;
(b) the legal regulated rent for the apartment was more than
$2,000.00 per month; and
(c) the tenants occupying the premises as their primary residence
maintained an annual income in excess of $175,000.00 in each of the two calendar
years preceding their lease renewal.
3. Stuyvesant Town and Peter Cooper Village (the “complex”)
encompasses 110 apartment buildings, containing 11,200 units with at least 20,000
residents located East of First Avenue between 14* Street and 23rdStreet.
4. The complex is subject to the Rent Stabilization Law (“RSL”).
5. Tishman and PCV have received real estate tax benefits under New
York City’s J-5 1 property tax abatement/exemption program.
6. Relevant and applicable state and local law mandates that, during the
period in which an Owner receives such real estate tax benefits, the units must

A
remain subject to rent stabilization. Therefore, it is manifestly unlawful for
Petitioners units to be deregulated.
7, Petitioners, for themselves and all other current rent stabilized tenants
facing the loss of their rent regulatory protections seek a mandatory injunction
prohibiting their evictions and compelling the provision of a renewal lease
pursuant to the dictates of the RSL.
Parties
8. Plaintiffs Kenneth M. Chanko and Barbara Chanko (“Chanko”) are
rent stabilized tenants residing at 430 East 20thStreet in the County, City and State
of New York. Plaintiffs reside in the complex.
9. Chanko’s rent stabilized lease has been terminated pursuant to an
Order issued by the Rent Administrator of DHCR dated October 11,2007.
10. Petitioner, Timothy McCann resides at 360 First Avenue, Apt. 7C, in
the County, City and State of New York and entered into an unlawful agreement
forfeiting his rent stabilized lease.
11, Petitioner’s rent stabilized lease has been terminated pursuant to an
Order of DHCR issued on June 1,2008.
12. The plaintiff Class, on whose behalf this action is brought, consists of
all tenants of the complex who are currently being evicted by the Owner or
prosecuted by the Owner in pending proceedings before DHCR pursuant to the

. -.
high income rent deregulation statute Section 2520.1 1 of the RSC. The members of
the Class face the loss of their homes and/or will suffer monetary damages as a
result of the actions of Respondent set forth herein.
13. DHCR is the State agency responsible for interpreting, applying and
enforcing the provisions of the RSC pursuant to Omnibus Housing Act of 1983,
14. DHCR is the agency responsible for issuing orders of deregulation
pursuant to the RSC.
15. Upon information and belief, Tishman is a New York limited
partnership with its principal place of business in the County, City and State of
New York.
16, PCV ST OWNER LP is and at all times relevant hereto a Delaware
limited partnership with its principal place of business in the County, City and
State of New York.
17. PCV ST OWNER LP is the current owner of the complex.
18. Tishman is the general partner of PCV ST OWNER LP.
Factual Background
19. Upon information and belief, on or about June 1, 1943, Metropolitan
Life Insurance Company (“MetLife”) and Stuyvesant Town Corporation entered
into an agreement with the City of New York with respect to the acquisition of real
property for and the financing, construction, operation, and supervision of the

I
redevelopment project known as Stuyvesant Town. The agreement was made
pursuant to the provisions of the Redevelopment Companies Law, which was
subsequently incorporated into Article V of the Private Housing Finance Law.
20. Pursuant to the aforedescribed agreement, Stuyvesant Town
Corporation (as the redevelopment company and owner of the Stuyvesant Town
complex) received a real estate tax exemption for a period of twenty-five (25)
years.
21. In or about late 1952, Stuyvesant Town Corporation entered into a
further agreement with MetLife and the City of New York, pursuant to which
Stuyvesant Town Corporation assigned to MetLife all of its rights under the
existing agreement with New York City. MetLife thus received the benefit of the
remainder of the twenty-five (25) year real estate tax exemption for Stuyvesant
Town.
22. Upon information and belief, in or about the late 1940s, MetLife
entered into an agreement with the City of New York with respect to the
acquisition of real property for and the financing, construction, operation and
supervision of the redevelopment project known as Peter Cooper Village.
23. The said agreement was made pursuant to the provisions of the
Redevelopment Companies Law and, upon information and belief, provided

*
MetLife, as the redevelopment company and owner of Peter Cooper Village, with a
real estate tax exemption for a period of twenty-five (25) years.
24. In or about 1974, New York State enacted an amendment to the
Redevelopment Companies Law which provided, in relevant part, that upon the
expiration of the twenty-five (25) year tax exemption granted to redevelopment
projects, the real property taxes payable on such projects would be phased in over a
ten (1 0) year period, at the end of which time such projects would be fully taxable.
25. Pursuant to the terms o f the aforesaid tax benefits in 1974, the Rent
Stabilization Laws of New York were applied to residents of the complex.
26. In or about 1992 the prior Owners of the complex applied for tax
benefits pursuant to the 5-5 1 tax relief program.
27. The J-51 tax abatement program provides incentives for Owners to
rehabilitate and improve their buildings.
28. A provision of the J-51 tax abatement prohibits the rent deregulation
of residential units receiving J-5 1 tax abatement.
29. Petitioners and members of the Class are all residents of units
receiving J-51 tax benefits.
30. The City of New York adopted Administrative Code Section 551-2.5
(now Administrative Code Section 11-243) in 1960.

1
3 1. The objective was to reward residential major capital improvement,
moderate rehabilitation and conversion projects with real property tax exemption
and abatement benefits.
32. The Rules of the City of New York mandates that a building receiving
J-51 benefits be subject to rent regulation for the duration of the period in which
such benefits are received (28 NYCRR 5-03[f1[1]).
33. The Rent Stabilization Law (“RSL”) was enacted by the New York
City Council in 1969.
34. In 1993 the legislature amended the RSL which provided for the
deregulation of units with a rent of $2,000.00 or more per month and an income of
$175,000.00 or more for two consecutive years (RSL Section 26-504 1) -
(“deregulation statute”).
35. The high income deregulation statute, however, does not apply to
housing units receiving the benefits of J-5 1 tax abatement program.
36. In or about March 5 , 2009 the Supreme Court, Appellate Division lSt
Department unanimously held that apartment Owners receiving J-51 tax benefits
may not deregulate those units. Specifically, the high income deregulation statute
does not apply to units occupied by petitioners and members of the Class. (See
Court decision annexed as Exhibit “A”).

#
I
37. Any agreement, contract or stipulation which resolved a high income
rent deregulation proceeding thereby eliminating rent regulatory protections would
therefore be illegal.
Class Action Allegations
38. This action is brought and may properly be maintained as a class
action under the provisions of Article 9 of the C.P.L.R.
39. The Class, is so numerous that joinder of all members of the Class,
whether otherwise required or permitted, is impracticable.
40. Petitioners’ Class are all current rent stabilized tenants that may be
evicted , are being prosecuted, or were evicted pursuant to the high income rent
deregulation statute of the State of New York.
41. Petitioners’ claims are typical of the claims of the other members of
the Class.
42. Petitioners have no interests antagonistic to the other members of the
Class. There is no conflict between Petitioners and any other members of the Class
with respect to this action or the claims for relief herein.
43. Petitioners are committed to the prosecution of this action and have
secured competent counsel.
44. Petitioners are adequate representatives of the Class and will fairly
and adequately protect the interests of the Class and its members.

9
45. A class action is superior to other available methods for the fair, just
and efficient adjudication of the claims asserted herein. Joinder of all members of
the Class is impracticable and, for financial and other reasons, it would be
impractical for individual members of the Class to pursue separate claims.
Prosecution of separate actions by individual members of the Class would create
the risk of varying and inconsistent adjudications and would waste scarce judicial
resources,
AS AND FOR A FIRST CAUSE OF ACTION
46. Petitioners repeat and reallege paragraphs “1” through “45”.
47. Petitioners are residing in apartments subject to the provisions of the
RSC.
48. Respondents are nonetheless seeking to evict petitioners and
unlawfully deregulate petitioners’ apartment.
49. As a result of unlawful eviction proceedings pending against
petitioners, petitioners are entitled to mandatory injunctions compelling the
provision of rent stabilized renewal leases.
50. Petitioners have no adequate remedy at law.
AS AND FOR A SECOND CAUSE OF ACTION
5 1. Petitioners repeat and reallege paragraphs “1” through “50”.

I
52. By virtue of unlawful eviction proceedings pending against
petitioners, petitioners are entitled to injunctive relief staying and enjoining all
pending DHCR high-income rent deregulation proceedings and any proceedings
currently pending in any Court of competent jurisdiction in the County, City and
State of New York that seeks to terminate the rent stabilized status of petitioners.
AS AND FOR A THIRD CAUSE OF ACTION

bL
53. Petitioners repeat and reallege paragraphs 193 through “52”.
54, As a direct and proximate result of the acts of respondents, petitioners
have absorbed legal fees, increased rents and the expense of seeking alternate
housing.
~
55. As a result of the foregoing, petitioners and members of the Class
have suffered monetary damages, in an amount to be determined at trial but in no
event less than $10,000,000.00.
WHEREFORE, Petitioners, on behalf of themselves and all other members
of the Class, respectfully request Judgment against Respondent as follows:
(1) On the First Cause of Action compelling the provision of rent
stabilized renewal leases to all members of the Class;
10

(2) On the Second Cause of Action enjoining the prosecution of
proceedings to deregulate or otherwise evict Petitioners;
(3) On the Third Cause of Action awarding Monetary Damages and Legal
Fees in an amount to be determined by the Court;
(4) On all Causes of Action declaring that this proceeding shall be
maintained as a class action pursuant to Article 9 of the C.P.L.R.;
(5) Awarding to the Class attorney fees pursuant to the provisions of
Article 9 of the C.P.L.R.;
(6) Awarding Petitioners and other members of the Class such other and
further relief including costs and disbursements, as this Court finds just and proper.
Dated: New York, New York

March 10,2009
-
J&K L. LESTER, ESQ.

Attorney for Petitioners
29 Broadway, gfhFl.
New York, NY 10006
(212) 832-5357
11

VERIFICATION
STATE OF NEW YORK 1

) ss.:
COUNTY OF NEW YORK )
BARBARA CHANKO, being duly sworn, deposes and says:
1. Deponent is one of the petitioners in the above-captioned action.
2. Deponent has read the foregoing Verified Petition and knows the
contents thereof; and the same is true to deponent’s own knowledge, except as to
the matters therein stated to be alleged upon information and belief and as to those
matters, deponent believes them to be true.
+do+
BARBARA CHANKO
Sworn to before me on this

7?k day of March, 2009.
~n
HARMON L FIELDS
Notary Public, State of New York
No. 02F16109487
4
Qualified in New York Coun
Commission hpires
12

VEFUFICATION
STATE OF NEW YORK 1

) ss.:
TIMOTHY McCANN, being duly sworn, deposes and says:

1. Deponent is one of the petitioners in the above-captioned action.
2. Deponent has read the foregoing Verified Petition and knows the
contents thereof; and the same is true to deponent’s own knowledge, except as to
the matters therein stated to be alleged upon information and belief and as to those
matters, deponent believes them to be true.
Swam to before me on this
HARMON L. FIELDS
No.02F16109487
Qualified in New York County
Commission Expires
14

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK

Petitioners,
AFFIDAVIT
-against-

PCV ST OWNER LP,
Respondents.
STATE OF NEW YORK )

) ss.:
COUNTY OF NEW Y O N )
BARBARA CHANKO, being duly sworn, deposes and says the following
statement to be true:
1. I currently reside with my husband, Kenneth, and two children at 430
East 20* Street, Stuyvesant Town, in the County, City and State of New York.
2. DHCR issued an Order destabilizing my apartment on October 11,
2007.
3. DHCR is reviewing this matter based upon a Petition For
Administrative Review ("PAR") filed on October 12,2007.

#
I F
4. DHCR determination if not stayed by this Court will result in my
imminent eviction and force me to vacate my home of 23 years.
BARBARA CHANKO

gfhday of March, 2009.
HARMON L. FIELDS
NO.02F16109487
Ouallfled in New York Coun
Commission E x p i r e s 4

Petitioners,
AFFIDAVIT
-against-

PCV ST OWNER LP,
Respondents.
STATE OF NEW YORK )

) ss.:
TIMOTHY F. McCANN, being duly sworn, deposes and says the following
statement to be true:
1. I currently reside with my wife, Francesca, and two children at 360
First Avenue, Apt. 7C, Peter Cooper Village, in the County, City and State of New
York.
2. My apartment was deregulated pursuant to the High Income Rent
Deregulation Statute on or about June 1, 2008.

. -
3. Respondents served me with an eviction proceeding as a result of the
DHCR Order on or about July 1,2008.
4. I thereafter entered into a Stipulation in order to settle the eviction
proceeding which the landlord commenced based upon the DHCR deregulation
Order.
5. The Stipulation required that I sign a fiee market lease for a rent of
$4,750.00 per month which commenced May 20, 2008 and terminates the lgthday
of June, 2009. I understand that based upon the decision in Roberts, et al. v.
T i s h a n Speyer Properties, L.P., Index No. 100956/07 it is unlawful for the
landlord to deregulate my apartment.
6. If the Court does not issue a stay in this proceeding, I will be forced to
vacate my home of 24 years. My daughter and son are 13 and 9, respectively, and
will be forced to leave their schools if I am unable to remain in my apartment.

day of March, 2009.

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At an IAS Part of the Supreme Court of the

State of New York, held in and for the

SUPREME COURT OF THE STATE OF NEW YORK 0 9 103299

THE NEW YORK STATE DIVISION OF 02 "m

i ', '1 <*a \ . " v+ ~ a*&.,

Upon the Verified Petition of Barbara Chad& ddiTQ&thy F. McCann,

Individual Assignment Part of this Court at the Courthouse located at 60

Supreme Court Records OnLine Library - page 1 of 23

heard, why an order should not be entered herein:

1) Compelling compliance with the Rent Stabilization Code of New

York and mandating renewal leases to Petitioners;

2) Enjoining Respondent, New York State Division of Housing and

Community Renewal (“DHCR”) from administering, enforcing or in any manner

of New York, Section 2520.1 1 against Petitioners;

3) Issuing a Preliminary Injunction enjoining and restraining the

Respondents, Tishman Speyer Properties, L.P. and PCV ST Owner LP from

prosecuting any eviction proceedings to terminate Petitioners’ occupancy during

the pendency of this proceeding or the related proceeding, Roberts, et al. v.

Tishman Speyer Properties, L.P., Index No. 100956/07; and

attorneys on or before be deemed sufficient service.

Supreme Court Records OnLine Library - page 2 of 23

KENNETH M. CHANKO, BARBARA CHANKO, Index No.

THE NEW YORK STATE DIVISION OF

JACK L. LESTER, an attorney duly admitted to practice in the Courts of

this State, hereby affirms that:

1. I am counsel for the petitioners in this

2. I submit this affirmation in support of

Order staying respondents from taking any action

residency and/or occupancy rights of petitioners.

3. On March 5 , 2009, the Appellate Division, First Department

Supreme Court Records OnLine Library - page 3 of 23

v. Tishman Speyer, L.P., et al., 2009 NY Slip Op 01595.

4. Petitioners all reside in units subject to rent stabilization by virtue of

respondents’ receipt of J-5 1 tax benefits.

5. Despite this unanimous determination of the Appellate Court,

New York, New York County.

6. Clearly based upon the Appellate Court’s determination as set forth

stabilized status of their apartments.

7. Moreover, if petitioners are evicted during the pendency of further

appellate litigation, they will suffer irreparable harrn.

PETITIONERS A R E ENTITLED TO A PRELIMINARY INJUNCTION

8. Petitioners have successfully established the grounds necessary for the

granting of a preliminary injunction in this petition.

9. A party seeking a preliminary injunction must establish all of the

following: a likelihood of success on the merits, irreparable injury if the relief is

72 N.Y.2d 967,968,969 (1988); Grant Co. v. Sroai, 52 N.Y2d 496,517 (1981);

Supreme Court Records OnLine Library - page 4 of 23

A.D.2d 589,592 (2dDept 1988).

10. Petitioner has met all the above requirements.

12. Petitioners’ counsel has notified Respondents of this proceeding,

however, a Temporary Restraining Order (“T.R.O.”) is not requested.

WHEREFORE, Petitioners respectfully pray that the relief requested in the

Order To Show Cause be granted.

Dated: New York, New York

Supreme Court Records OnLine Library - page 5 of 23

THE NEW YORK STATE DIVISION OF

Petitioners, KENNETH M. CHANKO, BARBARA CHANKO, TIMOTHY

McCANN and THE STUYVESANT TOW-PETER COOPER VILLAGE

TENANTS’ ASSOCIATION on behalf of themselves and all other similarly

OF HOUSING AND COMMUNITY RENEWAL, TISHMAN SPEYER

1. This is a class action lawsuit brought on behalf of hundreds of current

Supreme Court Records OnLine Library - page 6 of 23

High Income Rent Deregulation Statute of the State of New York.

2. Pursuant to the Rent Stabilization Code ((‘RSC”) Section 2520.1 1, an

i ', '1 <a \ . " v+ ~ a&.,