NEW YORK REAL ESTATE NEWS

Sheffield tenants win right to appeal eviction

March 27, 2009

A New York State Appellate Court on Wednesday granted market-rate tenants the right to appeal their landmark eviction case at the embattled Sheffield57 condominium.

In November 2008, a state appeals court overturned two prior rulings that blocked the evictions of market-rate tenants at the building, at 322 West 57th Street, and Manhattan House, a rival condominium conversion at 200 East 66th Street.

“I’m very happy, as are the tenants, that the appellate [court] did grant leave,” said McConnell, a partner at Himmelstein McConnell Gribben & Joseph. “They recognize that this affects thousands of tenants.”

Under the ruling, the warrants of eviction against the tenants are put on hold until at least May 29. McConnell said he may need to ask the court for a longer waiting period while the appeal is pending.

The original 2007 ruling by Housing Court Judge David Cohen blocked developer Kent Swig from evicting 23 holdout tenants who refused to leave the rental building as it was being converted into luxury condos. In 2005, investors Yair Levy and Serge Hoyda joined Levy in buying the 845-unit Sheffield for a record $418 million.

Cohen ruled that the Martin Act, which regulates the sale of co-op and condo apartments, protects both rent-stabilized and market-rate tenants from eviction during conversion. Later that year, he blocked developer Jeremiah O’Connor from evicting 29 market-rate tenants from Manhattan House.

However, in November, the three-judge panel ruled that apartment leases had expired before the state attorney general’s office accepted Manhattan House’s “red herring,” which is a legal blueprint that outlines the proposed conversion plan. The state attorney general regulates all condo and co-op conversions in New York State.

Swig did not comment on the ruling. However, landlords have long argued that evicting free market tenants is essential to condo conversions, as it allows them to renovate individual apartments and sell them at current market prices.

McConnell was part of the original legal team for the Manhattan House tenants, but the firm of Adam Leitman Bailey is now representing them. Bailey said that he is still awaiting a court ruling on the Manhattan House tenants.

Separately, the lawyer for dozens of condo unit owners at Sheffield57 said Swig and his legal team reached out to meet with the group, amid concerns about the state of the building’s reserve fund and long construction delays.

As reported earlier, a new group calling itself the Sheffield Owners Association met earlier this month with attorney Robert Braverman to raise concerns that the reserve fund was low and that common charges were delinquent.

“We’re looking forward to meeting Mr. Swig and his representatives to get some answers to some very important questions,” Braverman said.

He said the meeting would likely take place by the first week of April. Swig declined to comment.

By David Jones