Matter of Sol Goldman Invs. LLC v State of N.Y. Div. Hous. & Community Renewal

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Matter of Sol Goldman Invs. LLC v State of N.Y. Div. Hous. & Community Renewal 2014 NY Slip Op 30398(U) February 13, 2014 Supreme Court, New York County Docket Number: 100449/2013 Judge: Doris Ling-Cohan Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. SCANNED ON 2/19/2014 [* 1] <-~ftkEME :t()RK STATE OFNEWYO : ' .·.·~. i: ~ , · .. · · ·. ·... ·. · .co61.'0FTHEcouNTY .·.· . :N~w K PART __ _ , Index Number : 100449/2013 SOL GOLDMAN INVESTMENT vs. NYS DIVISION OF HOUSING SEQUENCE NUMBER : 001 INDEX NO. -1----- ARTICLE 78 '-.· ·,-- .... ~f~llpYJ~« ¢;p~p~~/Jt '.!·~ ~ .. ·~;.~re,:tla~~>ttds motion to/for _.c..µ::;...:.c....-..._.,.-"'_.L.;:...=..::~-=--...-J--NW~u>t:tM6~0~/#tcttr. · use ·J.~itS·~~-itirti· ·· · '.':';:. ·. ,J'~ ,;,.:,,.:.. ¢, · ., '. ¢ ,/' ¢· ''._ .. ¢. '.\ .. ·.--. - - - - - - - INo(s). An,~efii19~f:f!~ti~lti~AE~!ii... _ .r. ..... . -....;..-·~='''..._.··j11!....;....,.. =···.;_-·-.·....._- - - - - - - - ...... ;.-=·' .... . ¢ _ _ _ __ ' ·~: r.l~~t~~~;d~ ' ' '- '' I No(s). --i;;;,::..__ __ !~~:-{;; '" \i!~ ~.s~.·-,'.;.- ). ¢~. -·~~.·,.~'···. .:; ;:· .~ ¢-·., -·. ·_:;.·:_,r . ¢· '.·-. '.;: :J..~j;:,.' - ..·r-.a· ~._';;ii£,·- ·~~llil/Jif!:.'"''',,,..,,, ,,..,-=.,,,,,/.. · ,, :·;·-'.l.:_;..: . .-. ¢. .. . ~i~ \~;. .... ' ¢.. ¢.. ¢ ¢ , = . . . '. . . ¢. ¢ ¢ · . : : · ''f . · I .. ~8::_. Jr/,~ 'J ·.;o .e -Ce' ~ ·~~~~- ~t;~;~h-c4tk~~~_,-/. i' '. -- --' '' . ¢.. "' .[]DENIED , ORDER 0 FtDUClARY APPOINTMENT 0 REFERENCE [* 2] SUPREME COURT or THE STATE OF NEW YORK COUNTY OF NEW YORK: IAS PART 36 -----------------------------------------------------------------)( In the Matter of the Application of Sol Goldman Investments LLC J\I AIF 1700 First A venue LLC, Index No.: 100449113 Petitioner, DECISION/ORDER/JUDGMENT -against- Motion Seq. No. 001 State of New York Division of Housing and Community Renewal, Respondent. -----------------------------------------------------------------)( I HON. DORIS LING-COHAN, .JSC: Petitioner brings this Article 78 proceeding seeking an order directing respondent New York State Division of Housing and Community Renewal (DIJCR) to modify its order (MCI Order) granting Major Capital Improvement (MCI) rent increase dated November 14, 2008, lo include a MCI Increase for Petitioner's engineer's consulting fees, totaling $17 ,900.00. UNDERLYJNG FACTS AND PROCEDURAL BACKGROUND This proceeding concerns DHCR's determination that improvements made to housing accommodations 401 East 88 Street and 400 East 89 Street, New York, New York ("Buildings") as to the boiler/burner and water tank installations, performed by Sol Goldman Investments IJ ,C J\!J\IF 1700 First Avenue LLC ("Owner"), constitute a Major Capital Improvement (MCI)but that the cost associated with the consulting engineer should be excluded from the approved MCI amount. Following this finding, DHCR granted a rent increase on rent stabilized and rent controlled units in the Buildings, pursuant to Part 2522 of the Rent Stabilization Code (RSC). Thereafter, Petitioner filed a petition for administrative review (PAR), opposing the [* 3] Administrator's decision to exclude the cost of the consulting engineer from the MCI amount on the ground that the consulting engineer's services were necessary due to the complexity of the installations. In an administrative decision by DHCR, dated February 8, 2013 (Administrative Decision), Petitioner's PAR was denied. In such decision, DHCR found the record docs not support a finding that the boiler/burner and water tank installations at issue were exceptionally complex such that the services of a consulting engineer were necessary and thus did not warrant the inclusion of consulting engineer's fees in the MCI rent increase. Petitioner brought this Article 78 proceeding to challenge DHCR's Administrative Decision. DISCUSSION The standard for judicial review of an administrative determination is whether the decision was made arbitrarily or without a rational basis. Greystone Mgt. Corp. v Conciliation and Appeals Bd., 94 AD2d 614 (1st Dept 1983). An administrative determination should not be disturbed unless the agency's action was arbitrary, in violation of lawful procedure, or in excess of its jurisdiction. Matter olPell v Board al Educ., 34 NY2d 222 (1974 ). Moreover, it is vvell settled that the interpretation given a statute by the agency charged with its enforcement will be respected by the courts if not irrational or unreasonable. See }vfatter ofFineway Supermarkets. Inc. v State Liq. Auth., 48 NY2d 464, 468 (1979); Matter olHoward v 'Wyman, 28 NY2d 434, 438 (1971); Matter r~fLower Manhattan Lofi Tenants v NeH ¢ York City Loft Ed, 104 AD2d 223. 224 (1st Dept 1984), ajf'd 66 NY2d 298 (1985). 2 [* 4] After review of all the submissions, the petition is denied and this proceeding is dismissed. Rent Stabilization Code § 2522.4(a)(2)(i) governs what qualifies for an MCI rent increase. It is undisputed that, pursuant to RSL § 26-51 lc(6)(b), respondent DHCR has exclusive jurisdiction to determine whether an owner may increase rent based upon the cost of installation of an MCI. Here, respondent DHCR determined that, while certain engineering expenses may qualify for a rent increase, tenants should not be required to pay a permanent rent increase based upon a landlord's administrative costs, or to pay duplicative costs. Petitioner challenges the portion of the MCI Order which did not approve any rent increase based upon the cost of employing a consulting engineer. Petitioner argues that such consultation was necessary and customary to its MCI project which involved two boilers, two burners, and a water tank. Although Petitioner proffers the engineer's proposal in support of its argument that the MCI project was sufficiently complex as to warrant the inclusion of the engineer's consultation fees in the MCI Order, such proposal fails to shed light on the complexity of the subject project. Rather, the portions of the engineer's proposal, as highlighted by Petitioner in its reply, speak only to such engineer's qualifications. Specifically, the fact that the engineer has filed 8,000 installations with the Department of Air Resources and the Department of Buildings docs not demonstrate that respondent DHCR's determination was arbitrary and capricious. Moreover, the fact thai the engineer has lectured on heating system design at seminars, and that the engineer is a licensed oil burner installer, does not necessitate a finding that the subject MCI project was so complex as to conclude that respondent DHCR's determination, which did not include the engineer's consultation fees in the MCI Order, was arbitrary and capricious. Thus, the petition is denied and this proceeding dismissed. 3 ~~--------------------------1-- [* 5] DECISION Accordingly, it is ORDERED and ADJUDGED that the petition is denied and the proceeding is dismissed; and it is further ORDERED that within 30 days of entry of this order, respondents shall serve a copy upon petitioner, with notice of entry. This constitutes the decision of the Court. Dated: New York, New York February - , 2014 Hon. Doris Ling-Cohan, JSC J:\Article 78\DHCR\Sol Goldman Investments v NYS DHCR - challenge denied.wpd 4

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